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Main Street Checks, Inc. v. Graphic Resource, Inc.

United States District Court, N.D. Alabama, Southern Division

November 18, 2014

MAIN STREET CHECKS, INC., Plaintiff
v.
GRAPHIC RESOURCE, INC., Defendant

For Main Street Checks, Inc., Plaintiff: James L Mitchell, William T Mayfield, IV, LEAD ATTORNEYS, MAYNARD COOPER & GALE PC, Birmingham, AL.

REPORT AND RECOMMENDATION

HARWELL G. DAVIS, III, UNITED STATES MAGISTRATE JUDGE.

The above-entitled civil action is before the court on the Motion for Default Judgment filed by plaintiff. (Doc. 8). The motion asks the Court to enter a default judgment in favor of plaintiff Main Street Checks, Inc., and against defendant Graphic Resource, Inc., for $128, 000.00. For the reasons set forth below, the undersigned finds that the motion is due to be granted and RECOMMENDS that a Default Judgment be entered in favor of plaintiff Main Street Checks, Inc., and against defendant Graphic Resource, Inc., in the amount of $128, 000.00.

Relevant Facts

Main Street Checks, Inc. (Main Street) filed this case on June 5, 2014. (Doc. 1, Complaint). The complaint alleges that Main Street is a company based in Birmingham, Alabama, that provides checks and check-related products to financial institutions across the United States. Defendant is a corporation organized under the laws of the State of Texas with its principal place of business in Grand Prairie, Texas.

According to the complaint, Main Street located a ten color press in Pennsylvania owned by Graphic Resource, Inc. (GRI) that Main Street was interested in purchasing for use in printing checks for its customers. Main Street required for its specific needs that 25-inch cylinders be used in the press. Because the press did not contain 25-inch cylinders, GRI located seven 25-inch cylinders in Germany. Main Street then entered into a contract with GRI to purchase from GRI the press and cylinders. The purchase price was $450, 000, $70, 000 of which was for the cylinders. GRI guaranteed performance of the cylinders in the purchase contract and in communications with Main Street. The cylinders were shipped from Germany and tested with the press; however, the cylinders were determined to be defective.

Therefore, Main Street entered into a second contract with GRI whereby GRI agreed to completely rebuild and refurbish the cylinders, at an additional cost to Main Street of $28, 000. GRI attempted to rebuild the cylinders and then returned them to Main Street. The cylinders still failed to perform properly, and GRI was unable to remedy the defects. Therefore, Main Street was forced to purchase five additional cylinders at a cost of $30, 000 to keep the press operational and meet its contracts with customers. Main Street incurred increased production time and wasted materials resulting from the delays and poor performance of the cylinders. Main Street has asserted causes of action for breach of the purchase contract and breach of the rebuild contract.

In support of its Motion for Default Judgment, Main Street has submitted the affidavit of Grady Burrow, Main Street's Chief Executive Officer, with supporting documentation. (Doc. 8, Ex. A). Mr. Burrow's affidavit contains sworn testimony that tracks the allegations of the complaint. Mr. Borrow also attests that Main Street has suffered quantified damages of $128, 000, consisting of $70, 000 initially paid to GRI for the cylinders pursuant to the purchase contract, $28, 000 paid by Main Street to GRI pursuant to the rebuild contract, and $30, 000 for the purchase of five additional cylinders to keep the press operational and satisfy Main Street's customers' needs.

Defendant GRI was served with the summons and complaint on July 1, 2014. (Doc. 5, Executed Return of Service for GRI). GRI is a corporation and therefore does not qualify as either a minor or incompetent person. GRI has not answered or otherwise responded to the complaint. On November 3, 2014, Main Street filed a Motion for Clerk's Entry of Default and on November 6, 2014, it filed a Motion for Default Judgment. (Doc. 6, Motion for Clerk's Entry of Default; Doc. 8, Motion for Default Judgment). Main Street's Motion for Default Judgment is supported by the affidavit of Grady Burrow. ( See Doc. 8, Ex. A, Affidavit of Grady Burrow). The affidavit of Grady Burrow establishes that GRI has failed to plead or otherwise defend the claims asserted against it by Main Street. ( See id .). The affidavit of Grady Burrow also establishes that Main Street's claim was for a sum certain--$128, 000. ( See id .).

On November 3, 2014, the Clerk of the Court entered default against GRI. (Doc. 7, Clerk's Entry of Default).

Analysis

The Court's analysis of Main Street's Motion for Default Judgment involves a two-step process. First, the Court must satisfy itself that it has jurisdiction over the parties and the subject matter of the lawsuit. See Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994) (holding that district courts " always have an obligation to examine sua sponte their jurisdiction before reaching the merits of any claim"). Second, the Court must ensure that Main Street has satisfied the elements of Rule 55, Fed.R.Civ.P., and is entitled to the default judgment it seeks. See Nishimatsu Constr. Co v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)[1] (explaining that " a defendant's default does not ...


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