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ICool, USA, Inc. v. MBRB Sales, LLC

United States District Court, S.D. Florida

December 5, 2019

ICOOL, USA, INC., Plaintiff,
v.
MBRB SALES, LLC, WILLIAM SANDS, and BYS WHOLESALERS, LLC, Defendants.

          ORDER ON MOTION FOR FINAL DEFAULT JUDGMENT

          BETH BLOOM, UNITED STATES DISTRICT JUDGE.

         THIS CAUSE is before the Court upon Plaintiff ICool, USA, Inc.'s (“ICool”) Motion for Default Final Judgment, ECF No. [87] (“Motion”), filed pursuant to Federal Rule of Civil Procedure 55(b)(2) against Defendants BYS Wholesalers, LLC (“BYS”) and William Sands (“Sands”). A Clerk's Default was entered against Defendants BYS and Sands on February 25, 2019, ECF No. [54], and March 4, 2019, ECF No. [56], respectively, after they failed to answer or otherwise plead to the amended complaint, despite having been properly served. The Court has carefully considered the Motion, the record in this case and the applicable law, and is otherwise fully advised. For the following reasons, ICool's Motion is granted.

         I.BACKGROUND

         ICool initiated this action on October 5, 2018, and filed the First Amended Complaint, ECF No. [30] (“Amended Complaint”), on January 18, 2019, alleging claims against BYS and Sands for breach of implied-in-law contract/unjust enrichment (Counts 3 and 4), goods sold and delivered (Counts 6 and 7), and fraud (Counts 8 and 9).[1] The Amended Complaint alleges that Sands placed four orders for R410A refrigerant gas from ICool during September 2017 in the total amount of $306, 880.00, and that the cylinders were delivered to BYS's warehouse in Port St. Lucie, Florida, in September and October 2017. Id. ¶¶ 17-20. Neither Sands nor BYS paid for these shipments. Id. ¶¶ 22, 30. Furthermore, to induce ICool to sell the cylinders on a line of credit, Sands represented to ICool that he was an agent of MBRB and provided MBRB's business documents to ICool for the purpose of opening an account on which he could purchase goods on credit. Id. ¶¶ 11-15). As ICool later learned, Sands was not and has never been authorized to act on behalf of MBRB. See ECF No. [87-2] at 75:7-77:1; ECF No. [87-3] at 63:23-65:1. ICool has been damaged by Sands and BYS's conduct in the amount of $306, 880.00, which represents the amount owed for the four orders placed by Sands. ECF No. [30] ¶¶ 21, 31; ECF No. [87-1] ¶ 12.

         In its Motion, ICool seeks the entry of final default judgment against BYS and Sands on its claims against them for breach of implied-in-law contract/unjust enrichment, goods sold and delivered, and fraud.

         II. LEGAL STANDARD

         Pursuant to Federal Rule of Civil Procedure 55(b), the Court is authorized to enter a final judgment of default against a party who has failed to plead in response to a complaint. This Circuit maintains a “strong policy of determining cases on their merits and we therefore view defaults with disfavor.” In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). Nonetheless, default judgment is entirely appropriate and within the district court's sound discretion to render where the defendant has failed to defend or otherwise engage in the proceedings. See, e.g., Tara Prods., Inc. v. Hollywood Gadgets, Inc., 449 Fed.Appx. 908, 910 (11th Cir. 2011); Dawkins v. Glover, 308 Fed.Appx. 394, 395 (11th Cir. 2009); In re Knight, 833 F.2d 1515, 1516 (11th Cir. 1987); Wahl v. McIver, 773 F.2d 1169, 1174 (11th Cir. 1985); Pepsico, Inc. v. Distribuidora La Matagalpa, Inc., 510 F.Supp.2d 1110, 1113 (S.D. Fla. 2007); see also Owens v. Benton, 190 Fed.Appx. 762 (11th Cir. 2006) (default judgment within district court's direction).

         A defendant's “failure to appear and the Clerk's subsequent entry of default against him do[es] not automatically entitle Plaintiff to a default judgment.” Capitol Records v. Carmichael, 508 F.Supp.2d 1079, 1083 (S.D. Ala. 2007). Indeed, a default is not “an absolute confession by the defendant of his liability and of the plaintiff's right to recover, ” Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F.Supp.2d 1353, 1357 (S.D. Ga. 2004), but instead acts as an admission by the defaulted defendant as to the well-pleaded allegations of fact in the complaint. See Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009) (“A 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.”) (citations omitted); Descent v. Kolitsidas, 396 F.Supp.2d 1315, 1316 (M.D. Fla. 2005) (“the defendants' default notwithstanding, the plaintiff is entitled to a default judgment only if the complaint states a claim for relief”); GMAC Commercial Mortg. Corp. v. Maitland Hotel Assocs., Ltd., 218 F.Supp.2d 1355, 1359 (M.D. Fla. 2002) (default judgment is appropriate only if court finds sufficient basis in pleadings for judgment to be entered, and that complaint states a claim). Stated differently, “a default judgment cannot stand on a complaint that fails to state a claim.” Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1370 n.41 (11th Cir. 1997). Therefore, before granting default judgment, “the district court must ensure that the well-pleaded allegations of the complaint . . . actually state a 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 Fed.Appx. 860, 863 (11th Cir. 2007).

         III. DISCUSSION

         i. Breach of Implied-in-Law Contract/Unjust Enrichment (Counts 3 & 4)

         ICool's Amended Complaint sufficiently alleges facts which demonstrate claims for breach of implied-in-law contract/unjust enrichment against BYS and Sands. To state a claim for unjust enrichment under Florida law, a party must allege “a benefit conferred upon a defendant by the plaintiff, the defendant's appreciation of the benefit, and the defendant's acceptance and retention of the benefit under circumstances that make it inequitable for him to retain it without paying the value thereof.” Alvarez v. Royal Caribbean Cruises, Ltd., 905 F.Supp.2d 1334, 1341 (S.D. Fla. 2012) (quoting Ruck Bros. Brick, Inc. v. Kellogg & Kimsey, Inc., 668 So.2d 205, 207 (Fla. 2d DCA 1995)).

         Here, ICool alleged that Sands ordered cylinders containing refrigerant gas that were delivered to BYS's warehouse in Port St. Lucie, Florida. Sands signed for each of the four deliveries indicating that the cylinders had been delivered into his possession at BYS's warehouse. ECF No. [30] ¶¶ 20, 51, 60. Thus, ICool conferred a benefit on Sands and BYS-the cylinders- and Sands and BYS voluntarily, and with knowledge, accepted and retained the cylinders. Moreover, the circumstances are such that it would be inequitable for Sands and BYS to retain the cylinders without paying the value thereof. See, e.g., Am. Contractors Indem. Co. v. Brown & Luke Contracting, Inc., No. 3:06-CV-356-J-MCR, 2007 WL 2826230, at *2 (M.D. Fla. Sept. 25, 2007) (concluding that it would be inequitable to allow a defendant to retain payment beyond that which it was rightfully owed and granting default judgment).

         In addition, because Sands committed fraud in placing the orders with ICool, as explained in detail below, Sands can be held individually liable for unjust enrichment along with BYS. See, e.g., Munder v. Circle One Condo., Inc., 596 So.2d 144, 145 (Fla. 4th DCA 1992); Avila S. Condo. Ass'n v. Kappa Corp., 347 So.2d 599 (Fla. 1977); see also Segal v. Rhumbline Int'l, Inc., 688 So.2d 397, 399 (Fla. 4th DCA 1997) (finding that director of defendant corporation may be individually liable because complaint alleged that he had orchestrated the false representations made to the plaintiffs and had also allowed his name to be associated with the representations made); Brinker v. W.P. McDevitt & Assocs., Inc., 693 So.2d 712, 712 (Fla. 4th DCA 1997) (reversing dismissal of fraud in the inducement claims where the plaintiff alleged that two individual defendants fraudulently induced him to enter into an employment contract with their insurance agency for the purpose of bringing his “book of business” into the agency and that defendants never intended to let him retain ownership of the “book” or pay him its value if his employment should be terminated); Nicholson v. Kellin, 481 So.2d 931, 935 (Fla. 5th DCA 1985) (finding that the individual director of a corporation could be held liable for fraud where he orchestrated the false representations made to the plaintiffs and had also allowed his name to be associated with the representations made); Roth v. Nautical Eng'g Corp., 654 So.2d 978, 979-80 (Fla. 4th DCA 1995) (finding corporate officer individually liable for fraud committed while acting as corporate representative.).

         Based on these allegations, ICool has clearly satisfied the elements of a claim for breach of implied-in-law contract/unjust enrichment against BYS and Sands, and ...


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