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Meredith Springfield Associates, Inc. v. Puma Logistics, LLC

United States District Court, D. Massachusetts

May 7, 2018

MEREDITH SPRINGFIELD ASSOCIATES, INC. Plaintiff,
v.
PUMA LOGISTICS, LLC, et al. Defendants.

          REPORT AND RECOMMENDATION ON PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT PUMA LOGISTICS, LLC (DKT. NO. 21)

          KATHERINE A. ROBERTSON, UNITED STATES MAGISTRATE JUDGE

         I. Introduction

         In this matter, plaintiff Meredith Springfield Associates, Inc. (“Plaintiff”) seeks a default judgment against defendant Puma Logistics, LLC (“Puma”). Plaintiff alleges that it suffered losses when its products were damaged while being transported by Puma when the truck carrying the products collided with a bridge. Plaintiff's Application for Entry of Default Judgment (the “Motion”) was referred to me for a report and recommendation by presiding District Judge Mark G. Mastroianni (Dkt. Nos. 24, 39). See 28 U.S.C. § 636(b)(1)(B). The court held a hearing on Plaintiff's Motion on January 8, 2018 and set a deadline for a further submission (Dkt. No. 28). Plaintiff having demonstrated that Puma failed to appear or otherwise defend this suit and having dismissed all of its claims against the other defendants in the case, Plaintiff is entitled to a entry of a final judgment on its complaint including a default judgment under Federal Rule of Civil Procedure 55(b)(2) against Puma. Having reviewed Plaintiff's submissions, the court recommends that Plaintiff's Motion be GRANTED and that a default judgment enter against Puma in Plaintiff's favor in the amount of $21, 207, 66 with attorneys' fees and costs in the amount of $8, 099.30.

         II. Relevant Procedural and Factual Background

         Plaintiff filed its complaint in this court on March 30, 2017 against Puma, Sweeney Transportation, Inc. (“Sweeney Transportation”) and J.P. Morgan Chase Bank, N.A (“J.P. Morgan”) (Dkt. No. 1). Sweeney Transportation and J.P. Morgan were timely served (Dkt. Nos. 6, 7). Shortly thereafter, Plaintiff filed stipulations of dismissal as to Sweeney Transportation and J.P. Morgan (Dkt. Nos. 16, 17). Despite diligent efforts, Plaintiff had difficulty in serving Puma (Dkt. No. 22 at 1, ¶¶ 2-4). In early September 2017, Plaintiff received certification from the Texas Secretary of State that the office could not serve Puma's registered agent because the registered agent could not be found at the address Puma had provided to the Texas Secretary of State (Dkt. No. 22-1). Pursuant to Tex. Civ. Prac. & Rem. Code § 17.044 and Tex. Bus. Org. Code §§ 5.251-252, a party has made effective service if the party serves the Texas Secretary of State and allows that office to either serve the complaint or conclude that it cannot make service upon a registered agent of a Texas corporation because the Texas corporation has not maintained an agent in Texas. In the event the latter occurs, service is deemed to have been made upon the Texas corporation by means of service upon the Texas Secretary of State. Here, the Texas Secretary of State has certified that it was unable to serve Puma because of Puma's failure to maintain an agent in Texas to accept service of process (Dkt. No. 22-1). Under federal and Texas law, therefore, Puma is deemed to have been properly served. See Fed. R. Civ. P. 4(e)(1) and h(1)(A). In addition, there is evidence that Puma was made aware of Plaintiff's claims against it. See infra, page 4. The clerk entered default against Puma on December 20, 2017 (Dkt. No. 25).

         In view of Puma's s failure to appear, the facts alleged in the complaint as to Puma are taken to be true. See, e.g., Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59, 62-63 (1st Cir. 2002); Int'l Union of Operating Engrs, Local 4 v. Stanley Excavation, 243 F.R.D. 25, 27 (D. Me. 2007) (quoting Katahdin Paper Co., LLC v. U & R Sys., Inc., 231 F.R.D. 110, 112 (D. Me. 2007)). According to the complaint, Plaintiff is in the business of manufacturing and selling plastics products. On or around March 1, 2016, plaintiff called Sweeney Transportation to request transportation of a load of products from Plaintiff's factory to a customer in Pennsylvania. On or around March 3, 2016, a truck arrived at Plaintiff's factory and picked up the products. A non-negotiable bill of lading was executed listing Sweeney Transportation as the carrier. The bill of lading represented that when the products were picked up they were properly packaged and in proper condition for transportation (Dkt. No. 1 at 2, ¶¶ 7, 11-13).

         Later in the day on March 3, 2016, the truck that had picked up the products returned to Plaintiff's factory after having collided with a bridge. The products had not been delivered and were damaged in the accident. Plaintiff refused to unload the products because of the dangerous condition of the damaged truck. The driver proceeded to unload the products onto Plaintiff's loading dock (id., ¶¶ 14-17). Plaintiff promptly offered Sweeney Transportation the opportunity to inspect the damaged products. Sweeney Transportation declined to inspect the products and informed Plaintiff that it had subcontracted transportation of the products to a company called Landstar Ranger, Inc. (“Landstar”) (id. at 3, ¶¶ 18-20). Plaintiff reached out to Landstar and offered the company the opportunity to inspect the damaged products. Landstar declined to inspect, but asked Plaintiff to take photographs of the damaged goods, which Plaintiff did. Plaintiff then discarded its damaged products (id., ¶¶ 21-23).

         Plaintiff later learned that Landstar had in turn subcontracted transportation of its products to Puma. On or around July 6, 2016, Puma's insurer, Great American Insurance Group, issued a check, made out jointly to Plaintiff and Puma, intended to compensate Plaintiff for a portion of its loss arising from the damage to its products (id. at 3-4, ¶¶ 26, 28-29). Puma proceeded to deposit the check into its J.P. Morgan account without Plaintiff's endorsement. Plaintiff did not authorize or consent to Puma depositing the check (id. at 4, ¶¶ 30-33).

         Plaintiff has submitted additional evidence through its attorney's affidavit that Puma was on notice of Plaintiff's claims and the basis of those claims. Plaintiff's attorney had multiple communications with Puma's insurance company about Plaintiff's claims against Puma. Plaintiff also had such communications with Puma's insurer before the complaint was filed in this court (Dkt. No. 22 at 2, ¶¶ 6-7). Plaintiff reached a settlement with Puma's insurer, Great American Insurance Group (“Great American”) in the amount of $11, 599.33, of which $10, 599.33 was to be paid to Plaintiff by the insurer with Puma paying a $1, 000 deductible to Plaintiff. Plaintiff submitted as evidence a copy of a letter Great American wrote to Puma to notify Puma about the settlement and the basis for that settlement (Dkt. No. 30-2 at 1-2). Subsequently, Great American sent the settlement check to Puma. Plaintiff submitted a copy of the check as evidence. Despite the fact that the check was made out jointly to Puma and Plaintiff, Puma deposited the check in its J.P. Morgan account without any endorsement by Plaintiff (Dkt. No. 30-1). Puma has not compensated Plaintiff for any part of the value of its damaged products. Plaintiff's complaint asserts claims against Puma for unfair and deceptive business practices in violation of Mass. Gen. Laws ch. 93A (“Chapter 93A”) (Count II) and conversion (Count III) based on Puma's misappropriation of the Great American check intended to reimburse Plaintiff for part of its March 3, 2016 loss (Dkt. No. 1 at 5, ¶¶ 38-43).

         III. Discussion

         a. Standard of Review

         While a court should accept as true the well-pleaded factual allegations in the complaint when considering a motion for entry of default judgment, the court “need not accept the moving party's legal conclusions or factual allegations relating to the amount of damages.” Virgin Records Am., Inc. v. Bagan, Civ. No. 08-4694 (WHW), 2009 WL 2170153, at *2 (D.N.J. July 21, 2009) (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)). A court should conduct its own inquiry to ascertain the amount of damages with reasonable certainty. See Id. (quoting Int'l Assoc. of Heat & Frost Insulators v. S. Jersey Insulation Servs., No. 05-3143, 2007 WL 276137, at *1 (D.N.J. Jan. 26, 2007)).

         b. Damages

         At the hearing on Plaintiff's application for entry of a default judgment, Plaintiff's counsel stated that Plaintiff seeks a judgment in the amount of $10, 603.83 - the amount of the check misappropriated by Puma - trebled pursuant to Chapter 93A and attorneys' fees and costs totaling $8, 099.30. Plaintiff contends that the facts establish that Puma committed the common law tort of conversion when it deposited the Great American check and that this conversion of funds provides a basis for liability under Chapter 93A. “The elements of conversion require that a defendant be proved to have ‘intentionally or wrongfully exercise[d] acts of ownership, control or dominion over personal property to which he has no right of possession at the time.'” Grand Pac. Fin. Corp. v. Brauer, 783 N.E.2d 849, 857 (Mass. App. Ct. 2003) (quoting Abington Nat'l Bank v. Ashwood Homes, Inc., 475 N.E.2d 1230, 1233 (Mass. App. Ct. 1985)). Accepting as true the allegations in the complaint, supplemented by the evidence submitted by Plaintiff (the letter from Great American to Puma and the ...


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