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Camber Corp. v. Viatech Inc.

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

December 15, 2017

CAMBER CORPORATION, Plaintiff,
v.
VIATECH, INC., Defendant.

          MEMORANDUM OPINION

          MADELINE HUGHES HAIKALA, UNITED STATES DISTRICT JUDGE.

         Plaintiff Camber Corporation has asked the Court to enter a default judgment against defendant Viatech, Inc. (Doc. 14). Camber filed this suit on March 24, 2016. (Doc. 1). Camber alleges that Viatech breached its subcontract with Camber when Viatech failed to pay several invoices that Camber submitted for supplies and services provided under the subcontract. (Doc. 1).[1] Viatech, through counsel, executed a waiver of the service of summons on June 20, 2016, and then fell silent; Viatech did not respond to the complaint. (Doc. 9). On November 2, 2016, the Clerk of Court made an entry of default against Viatech. (Doc. 12). Camber then filed its motion asking the Court to enter a default judgment against Viatech. (Doc. 14). In support of this motion, Camber has filed a brief, an affidavit, and copies of its subcontract with Viatech. (Docs. 15, 16-1). For the reasons stated below, the Court grants Camber's motion and enters a default judgment against Viatech.

         STANDARD OF REVIEW

         Federal Rule of Civil Procedure 55 establishes a two-step procedure for obtaining a default judgment. First, when a defendant fails to plead or otherwise defend a lawsuit, the clerk of court may enter a clerk's default. Fed.R.Civ.P. 55(a). Second, after entry of the clerk's default, if the defendant is not an infant or an incompetent person, a court may enter a default judgment against the defendant because of the defendant's failure to appear or defend. Fed.R.Civ.P. 55(b)(2). “A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).

         “A motion for default judgment is not granted as a matter of right.” Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F.Supp.2d 1353, 1356 (S.D. Ga. 2004) (internal footnote omitted). After a clerk enters a default pursuant to Rule 55(a), a court must review the sufficiency of the complaint and its underlying substantive merits to determine whether a moving party is entitled to default judgment. Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1370 n.41 (11th Cir. 1997). A court must ensure that the well-pleaded allegations in the complaint state a substantive cause of action and that a sufficient basis exists in the pleadings for the relief sought. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005). In addition to the pleadings, a court may consider evidence presented in the form of an affidavit or declaration. Frazier v. Absolute Collection Serv., Inc., 767 F.Supp.2d 1354, 1362 (N.D.Ga. 2011). A defaulting defendant “admits the plaintiff's well-pleaded allegations of fact” for purposes of liability. Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987) (quoting Nishimatsu Construction Co., Ltd. v. Houston National Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (internal quotation marks omitted)).

         FACTUAL ALLEGATIONS

         Camber alleges that on March 22, 2013, it entered into an “indefinite delivery/indefinite quantity subcontract” with Viatech. (Doc. 1, p. 3). Camber indicates that this subcontract was associated with a primary contract between Viatech and the United States. (Doc. 1, p. 3). Camber was to provide “engineering, logistics, and business operations support” to Viatech per individual purchase and task orders from Viatech. (Doc. 1, p. 4). Under the subcontract, Viatech was obligated to remit payments to Camber for properly submitted invoices within five business days of receiving payment on the primary contract from the United States. (Doc. 1-1, p. 8).

         Camber alleges that in December 2014, Viatech stopped remitting payments for invoices that Camber submitted to the company under the subcontract. (Doc. 1, pp. 5-6). Camber contends that Viatech failed to make the required payments even though the United States had paid Viatech under the primary contract. (Doc. 1, p. 6). Despite Viatech's delinquency, Camber continued to respond to Viatech's purchase and task orders for the better part of a year. (Doc. 1, pp. 6-7). In December 2015, Camber and Viatech entered a forbearance agreement to allow Viatech to pay off the overdue invoices. (Doc. 1, pp. 7-9). Viatech made only two payments under the forbearance agreement. (Doc. 1, p. 9). Based on the table Camber includes in its complaint, Camber stopped submitting invoices to Viatech in February, 2016. (Doc. 1, p. 6).

         DISCUSSION

         Subject Matter Jurisdiction

         Before entering a default judgment, the Court first must ensure that it has subject matter jurisdiction over the case. See Burke v. Smith, 252 F.3d 1260, 1263 (11th Cir. 2001) (“Generally, a judgment is void under Rule 60(b)(4) if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law.”) (internal quotations omitted); see also Smarter Every Day, LLC v. Nunez, 2017 WL 1247500, at *2 (N.D. Ala. Apr. 5, 2017). Camber asserts that the Court has subject matter jurisdiction over this case under 28 U.S.C. § 1332 because the parties are completely diverse, and more than $75, 000 is in controversy. (Doc. 1, pp. 2-3). Camber alleges that it is a Delaware corporation headquartered in Alabama, and Camber alleges that Viatech is a New Jersey corporation. (Doc. 1, p. 2). To complete the jurisdictional picture, the Court takes note of the fact that the subcontract, a copy of which Camber attached to its complaint, lists Viatech's primary place of business as Eatontown, New Jersey. (Doc. 1-1, p. 2).[2] Therefore, in the absence of record evidence to the contrary, the Court finds that the parties are completely diverse.

         As to the amount in controversy, Camber claims that the invoices that Viatech left unpaid total $1, 005, 546.69. (Doc. 1, p. 6; Doc. 15, p. 4).[3] In both the complaint and the motion for default judgment, Camber includes a table listing the date and the amount of each invoice that the company alleges Viatech did not pay. (Doc. 1, p. 6; Doc. 15, p. 4). Camber also supports the total amount of damages the company claims with the declaration of Mike Whyte, Camber's custodian of records. (Doc. 16-1, p. 2). In light of Camber's allegations and the supporting declaration, the Court is satisfied that more than $75, 000 is in controversy. Therefore, the Court determines that it has subject matter jurisdiction over this case.

         Personal Jurisdiction

         To enter a valid default judgment, a court also must have personal jurisdiction over the defendant. Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009). To determine whether a district court has personal jurisdiction over an out-of-state defendant, the Court typically applies a two-prong test that asks whether the state's long arm statute confers jurisdiction over the defendant, and, if so, whether the defendant has sufficient contacts with the forum to satisfy the Due Process Clause of the Fourteenth Amendment. See Melgarejo v. Pysca Panama, S.A., 537 Fed.Appx. 852, 858-59 (11th Cir. 2013). Alabama's long-arm statute permits courts within the state, including federal courts, to exercise jurisdiction to the extent allowed by the Due Process Clause. Mut. Serv. Ins. ...


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