United States District Court, E.D. Louisiana
ORDER & REASONS
M. AFRICK UNITED STATES DISTRICT JUDGE
the Court is plaintiff BASF Corporation's
(“BASF”) motion for entry of a default judgment
against defendant Wrens, Inc. (“Wrens”). BASF
requests that the Court enter a judgment in its favor and
award damages in the amount of $418, 879.31. BASF also
requests costs-namely, reimbursement for the $400 filing fee
and a $135 expense it incurred to complete service of
process. For the following reasons, the motion is
granted in part.
the facts in BASF's complaint as true, they are as
follows: BASF is in the business of selling after-market
products related to refinishing automobiles.BASF resells its
products to distributors, who in turn sell them to automotive
body shops, such as Wrens. On or about December 13, 2013, BASF and
Wrens entered into a requirements agreement (the
“contract”), under which Wrens was obligated to
purchase one-hundred percent of its required refinishing
products from an authorized BASF distributor. In accordance
with the requirements contract, BASF's claims are
governed by New Jersey laws.
contract included several other terms. It specified a minimum
purchase requirement of $635, 000 in the aggregate at
“suggested refinish pricing” (the “minimum
requirement”). It also required BASF to pay Wrens $50.000
in consideration. However, Wrens agreed to assume liability
for $7, 800 in unearned consideration that it had previously
received from BASF pursuant to a prior
agreement. The contract provided that, if the
agreement was terminated for any reason before Wrens had
purchased the minimum requirement, Wrens was obligated to
refund one-hundred percent of what BASF calls “the full
Contract Fulfillment Consideration, ” which includes
the $50, 000 in consideration as well as the $7, 800 in
around August 2017, without any justification, Wrens breached
and ultimately terminated the contract by, among other
things, entering into an agreement with one of BASF's
competitors and failing to purchase one-hundred percent of
its required refinishing products from BASF. Since then,
Wrens has refused to purchase any other BASF refinishing
products in further violation of the contract. The breaches
occurred before Wrens had purchased the minimum
October 2018, BASF notified Wrens that it was in default of
its contractual obligations; BASF also demanded payment of
the full consideration amount- $57, 800. To date,
Wrens has failed and refused to refund the $57, 800 of
consideration. Additionally, a purchase balance of at
least $361, 079.31 remains due under the terms of the
contract. BASF has fulfilled all of its
obligations under the contract.
January 10, 2019, BASF filed the present lawsuit against
Wrens, asserting claims for breach of contract, breach of the
implied covenant of good faith and fair dealing, unjust
enrichment, and declaratory relief. BASF now moves the Court
to enter a default judgment for damages against Wrens. R.
Doc. No. 1, at 3-4.
to Federal Rule of Civil Procedure 55(b), the Court may enter
a default judgment against a party when it fails to plead or
otherwise respond to the plaintiff's complaint within the
required time period. Fed.R.Civ.P. 55(b). A plaintiff who
seeks a default judgment against an unresponsive defendant
must proceed with a two-step process.
the plaintiff must petition the clerk for an entry of
default, which is simply “the placement of a notation
of the party's default on the clerk's record of the
case.” Dow Chem. Pac. Ltd. v. Rascator Mar.
S.A., 782 F.2d 329, 335 (2d Cir. 1986); see also
United States v. Hansen, 795 F.2d 35, 37 (7th Cir. 1986)
(describing the entry of default as “an intermediate,
ministerial, nonjudicial, virtually meaningless docket
entry”). Before the clerk may enter the default, the
plaintiff must show “by affidavit or otherwise”
that the defendant “has failed to plead or otherwise
defend.” Fed.R.Civ.P. 55(a). Beyond that requirement,
the entry of default is largely mechanical.
the defendant's default has been entered, the plaintiff
may request the entry of a judgment on the default. In that
context, the court deems the plaintiff's well-pleaded
factual allegations admitted. See Nishimatsu Const. Co.,
Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th
Cir. 1975). At the same time, the court does not hold the
defaulting defendant “to [have] admitt[ed] facts that
are not well-pleaded or to [have] admitt[ed] conclusions of
law.” Id. The default judgment should not be
entered unless the judgment is “‘supported by
well-pleaded allegations' and . . . ha[s] ‘a
sufficient basis in the pleadings.'” Wooten v.
McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th
Cir. 2015) (quoting Nishimatsu, 515 F.2d at 1206).
plaintiff's claim is for a sum certain and the defendant
has not made an appearance in court, the clerk may enter a
default judgment. Fed.R.Civ.P. 55(b)(1). In all other cases,
“the party must apply to the court for a default
judgment.” Fed.R.Civ.P. 55(b)(2). No. party is entitled
to a default judgment as a matter of right. Lewis v.
Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (per curiam).
The disposition of a motion for the entry of a default
judgment ultimately rests within the sound discretion of the
court. Mason v. Lister, 562 F.2d 343, 345 (5th Cir.
are entitled to consider many factors when determining
whether to enter a default judgment including, “whether
material issues of fact are at issue, whether there has been
substantial prejudice, whether the grounds for default are
clearly established, whether the default was caused by a good
faith mistake or excusable neglect, the harshness of a
default judgment, and whether the court would think itself
obliged to ...