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The Hanson Group, LLC v. Total Containment Solutions, Inc.

United States District Court, M.D. Florida, Fort Myers Division

August 23, 2017

THE HANSON GROUP, LLC, a Georgia limited liability company, Plaintiff,
v.
TOTAL CONTAINMENT SOLUTIONS, INC., Defendant.

          OPINION AND ORDER [1]

          SHERIPOLSTER CHAPPELL UNITED STATES DISTRICT JUDGE

This matter comes before the Court on Plaintiff's Motion for Default Judgment (Doc. 14) filed on August 1, 2017. No response has been filed and the time to do so has expired. For the reasons set forth below, the motion is granted.[2]

         BACKGROUND

         The Hanson Group, LLC (“Hanson”) is a seller and distributor of raw materials used to make industrial containment liners and coatings. (Doc. 1, ¶ 5). Defendant Total Containment Solutions, Inc. (“TCS”) is a manufacturer and seller of industrial containment liners and coatings. (Id. at ¶ 6).

         In February 2014, Hanson sold and provided raw materials to Defendant for use in manufacturing waste water containment products for the fracking industry, pursuant to the terms of an Application for Credit submitted by Defendant and Hanson Group Standard Terms and Conditions of Sale Including Limited Warranty (“Terms and Conditions”). (Doc. 1 at ¶¶ 7-12). Hanson attached copies of the Application for Credit and Terms and Conditions to the Complaint as Exhibits A and B, respectively. (See id.). Pursuant to the terms, TCS guaranteed and agreed that payment for materials purchased would be made within 30 days after the date of the product invoice. (Id. at ¶ 8). And in consideration of the extension of this credit from Hanson, TCS agreed to pay all reasonable legal fees, costs and collection fees incurred by Hanson in the event payment was not timely received. (Id.)

         Hanson alleges that beginning in January 2015 and continuing thereafter, Defendant failed and refused to make payments due to Hanson for materials that were purchased, delivered, and invoiced. (Doc. 1, ¶ 13). Therefore, Plaintiff filed a Complaint for breach of contract and account stated. Hanson attached copies of the unpaid invoices to the Complaint as Composite Exhibit C. (See id.at ¶ 14). Hanson alleges that it demanded payment from Defendant, Defendant acknowledged that the debt was due and owing, but Defendant failed and refused to make payment of the amounts due and owing. (Id. at ¶ 15). As of the date of the filing of the Complaint, May 1, 2017, Hanson states that a total of $456, 502.50, plus finance charges and interest, remained due and owing from Defendant. (Id. at ¶ 14). The Terms and Conditions attached to the Complaint set forth that invoices that are not paid within 30 days are subject to a finance charge of 1.5% per month, and that Hanson is entitled to the recovery of attorneys' fees and costs for any legal action to recover amounts due under the contract. (See Id. at ¶¶ 11, 12, 17 & Ex. B).

         Despite service of the Complaint on Defendant, TCS has not made an appearance in this case; therefore a Clerk's Default (Doc. 11) was entered on June 27, 2017. Hanson now seeks a default judgment against TCS and an award of costs and attorneys' fees. (Doc. 14).

         LEGAL STANDARD

         Rule 55 of the Federal Rules of Civil Procedure establishes a two-step procedure for obtaining default judgment. SeeFed. R. Civ. P. 55. First, when a defendant fails to plead or otherwise defend a lawsuit, the clerk of the court must enter a clerk's default against the defendant. Cohan v. Rist Properties, LLC, No. 2:14-cv-439-FTM, 2015 WL 224640, at *1-2 (M.D. Fla. Jan. 15, 2015) (citing Fed.R.Civ.P. 55(a)). Second, after receiving the clerk's default, the court can enter a default judgment provided the defendant is not an infant or incompetent. Id. (citing Fed.R.Civ.P. 55(b)(2)); see also Solaroll Shade & Shutter Corp. v. Bio-Energy Sys. Inc., 803 F.2d 1130, 1134 (11th Cir. 1986) (stating a default judgment may be entered “against a defendant who never appears or answers a complaint, for in such circumstances the case never has been placed at issue.”).

         An entry of a clerk's default, however, does not per se warrant an entry of default judgment. Rather, a court may enter a default judgment only if “the well-pleaded allegations in the complaint, which are taken as true due to the default, actually state a substantive cause of action and that there is a substantive, sufficient basis in the pleadings for the particular relief sought.” Tyco Fire & Sec., LLC v. Alcocer, 218 F. App'x 860, 863 (11th Cir. 2007); Nishimatsu Constr. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (“The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established . . . A default judgment is unassailable on the merits but only so far as it is supported by well-pleaded allegations, assumed to be true.” (citations omitted)). “The defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law . . . [A] default is not treated as an absolute confession of the defendant of his liability and of the plaintiff's right to recover.” Nishimatsu, 515 F.2d at 1206. In considering a motion for default judgment, courts must “examine the sufficiency of plaintiff's allegations to determine whether the plaintiff is entitled to” relief. PNC Bank, N.A. v. Starlight Props. & Holdings, LLC, No. 6:13-cv-408, 2014 WL 2574040, at *1 (M.D. Fla. June 9, 2014) (citation omitted). With these principles in mind, the Court will address Hanson's Motion for Default Judgment.

         DISCUSSION

         The elements of a breach of contract cause of action are: (1) a valid contract, (2) a material breach, and (3) damages. Havens v. Coast Florida, P.A., 117 So.3d 1179, 1181 (Fla. 2d DCA 2013). Here, Hanson alleged that TCS entered into a contract with Hanson, that TCG breached the contract by refusing to pay that debt, and that TCG owes Hanson more than $456, 502.50. Thus, the Court finds that plaintiff has adequately pled a breach of contract, which allegations are deemed admitted, supporting the entry of a default judgment against Defendant.

         A. Damages

         With regard to damages, Plaintiff submitted an Affidavit of Lee Hanson, managing member of Hanson. (Doc. 14-1, “Hanson Affidavit”.) In the Hanson Affidavit, Plaintiff asserts a claim of $456, 502.50, excluding finance charges, interest, and attorney's fees and costs incurred in seeking enforcement of the contract. Specifically, as of August 1, 2017, Plaintiff asserts that the total amount of interest accrued at the rate of 1.5% per month in accordance with the Terms and Conditions is $181, 362.24, and interest will continue to accrue at the per diem rate of $225.12 until ...


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