The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
EW POLYMER GROUP, LLC CIVIL ACTION
VERSUS
GSX INTERNATIONAL GROUP, INC. NO. 21-00285-BAJ-EWD
RULING AND ORDER
Before the Court is Plaintiff EW Polymer Group, LLC’s Motion For
Confirmation Of Default Judgment (Doe. 19) against Defendant
GSX International Group, Inc. The Motion is unopposed.
For the reasons stated herein, Plaintiffs Motion is GRANTED, and Plaintiff
is awarded damages as set forth herein.
I, RELEVANT BACKGROUND
A. Alleged Facts
This suit arises out of Defendant’s alleged failure to pay Plaintiff for the masks
it purchased and received. (Doc. 6). Plaintiff alleges the following. In December 2020,
Plaintiffsold and shipped 2,777,200 disposable 3 ply non-woven non-sterile respirator
face masks (“masks”) to Defendant at Defendant’s request. (Id. at § 6). Each mask
cost $0.10, for a total of $277,200. Ud. at J 7). The relevant Purchase Order is signed
by F. Greg Stewart, executive officer for Defendant, and reflects a payment term of
“[clash upon delivery” to Plaintiff. (Id. at {4 7, 14); Doc. 1-2).
After receiving Defendant’s signed Purchase Order, Plaintiff issued Defendant
an invoice in the amount of $277,200. Ud. at J 8). The invoice required payment on
delivery via “electronic transfer ACH or wire per the instructions on the invoice.”
On December 28, 2020, carrier Reed and Son Trucking, LLC accepted delivery
of 28 pallets containing approximately one-half of the 2,777,200 masks from Wilson
Warehouse in Baton Rouge, Louisiana. (/d. at {[ 9). Reed and Son delivered the masks
to Defendant’s designated consignee in Stockbridge, Georgia. (U/d.). On December 29,
2020, Globaltranz, on behalf of motor carrier Reed and Son, issued Plaintiff with a
freight invoice in the amount of $1,400 for carriage of the masks. (/d. at 4] 10). Plaintiff
paid the invoice in full. Ud.).
On December 28, 2020, carrier Alpha Express, LLC accepted delivery of
28 pallets containing approximately the remaining one-half of the 2,777,200 masks
from Wilson Warehouse in Baton Rouge, Louisiana. (/d. at 4] 11). Alpha fies then
delivered the masks to Defendant’s designated consignee in Stockbridge, Georgia.
Qn December 29, 2020, Globaitranz, on behalf of Alpha Express, LLC, issued
Plaintiff with an invoice in the amount of $1,500 for carriage of the masks.
Ud. at § 12). Plaintiff paid the invoice in full. (/d.).
Defendant confirmed receipt of all 2,777,200 masks subject of the parties’ sales
agreement. Ud. at | 13). To date, Defendant has failed and refused to pay the amount
due and owing of $277,200. (d.).
Plaintiff issued a formal demand for payment per the contract. Ud. at § 14). To
date, Defendant has not responded to the demand letter. Ud.). Accordingly, Plaintiff
contends that as of January 1, 2021, Defendant owes Plaintiff $277,200. Ud. at § 15).
Plaintiff retained counsel to assist in the collection of its debt. Ud. at 16). On
March 4, 2021, Plaintiffs Counsel sent a second demand letter to Defense Counsel,
Christopher F. Klink. Gd.). On March 8, 2021, Plaintiff, through its CEO,
Greg Nelson, transmitted a second demand letter to Defendant, through Stewart.
(id. at { 17). On March 22, 2021, Plaintiffs Counsel transmitted another copy of the
demand letter to Defense Counsel. (/d. at 9 18-19).
Plaintiff alleges that it has satisfied all conditions for recovery under
Louisiana’s Open Account Statute, Louisiana Revised Statutes § 9:2781. Ud. at 20).
Accordingly, Plaintiff contends that it is entitled to recover the entire balance owed
and all costs of collection incurred by Plaintiff in prosecuting this suit, including
expenses and reasonable attorneys’ fees. Ud.).
B. Procedural History
Plaintiff filed suit on May 17, 2021. (Doc. 1). Thereafter, Plaintiff filed an
Amended Complaint on June 1, 2021. (Doc. 6). Plaintiff alleges that the Court has
jurisdiction pursuant to 28 U.S.C. § 1332. Ud. at | 3). Where jurisdiction is founded
on diversity, federal courts must apply the substantive law of the forum state.
Meadors v. D'Agostino, No. CV 18-01007-BAJ-EWD, 2020 WL 1529367, at *3 (MLD.
La. Mar. 30, 2020) (citing Erie RA. v. Tompkins, 304 US. 64, 78 (1988).
Despite being personally served on August 10, 2021, Defendant has not
appeared in this case. (Doc. 12). On October 8, 2021, Plaintiff filed a Request for
Entry of Default. (Doc. 17). On October 12, 2021, the Clerk of Court entered a Clerk’s
Entry of Default. (Doc. 18). Plaintiff now moves for a Default Judgment against
Defendant. (Doc. 19).
Ik. STANDARD OF REVIEW
The United States Court of Appeals for the Fifth Circuit has adopted a
three-step process to obtain a default judgment. See New York Life Ins. Co. v. Brown,
84 F.3d 137, 141 (5th Cir. 1996). First, a default occurs when a party “has failed to
plead or otherwise defend” against an action. Fed. R. Civ. P. 55(a). Next, an entry of
default must be entered by the clerk when the default is shown “by affidavit ox
otherwise.” See id.; New York Life Ins. Co., 84 F.3d at 141. Third, a party may apply
to the court for a default judgment after an entry of default. Fed. R. Civ. P. 55(b);
New York Life Ins. Co,, 84 F.3d at 141.
After a party files for a default judgment, courts must apply a two-part process
to determine whether a default judgment should be entered. First, a court must
consider whether the entry of default judgment is appropriate under the
circumstances. Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). Several
factors are relevant to this inquiry, including the following: (1) whether there are
material issues of fact; (2) whether there has been substantial prejudice; (3) whether
the grounds for default have been clearly established; (4) whether the default was
caused by excusable neglect or good faith mistake; (5) the harshness of the default
judgment; and (6) whether the court would think itself obliged to set aside the default
on a motion by Defendant. Id. Default judgments are disfavored due to a strong policy
in favor of decisions on the merits and against resolution of cases through default
judgments. Id. Default judgments are “available only when the adversary process has
been halted because of an essentially unresponsive party.”
Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276
(th Cir. 1989) (citation omitted).
Second, the Court must assess the merits of Plaintiff's claims and determine
whether Plaintiff has a claim for relief. Nishtmatsu Constr. Co. v.
Houston Natl Bank, 515 F.2d 1200, 1206 (5th Cir. 1975); Hamdan ov.
Tiger Bros. Food Mart, Inc., No. CV 15-00412, 2016 WL 1192679, at *2
(M.D. La. Mar. 22, 2016).
WI. ANALYSIS
A, Whether Default Judgment Is Appropriate
The Court must determine whether default judgment is appropriate under the
circumstances by considering the Lindsey factors. Lindsey v. Prive Corp.,
161 F.3d 886, 893 (5th Cir. 1998). Here, Defendant failed to file an Answer or Rule 12
Motion in response to Plaintiff's Complaint. (Doc. 1; Doc. 6). Consequently, there are
no material issues of fact. See id.; Nishimatsu Constr. Co. v. Houston Nat'l Bank,
515 F.2d 1200, 1206 (6th Cir. 1975). The grounds for default have been clearly
established in the record. (Doc. 6—Doc. 9); See Lindsey, 161 F.3d at 893. No evidence
before the Court indicates either substantial prejudice or that Defendant’s failure to
respond or appear was the result of “good faith mistake or excusable neglect.” See id.
Further, Defendant’s failure to file a responsive pleading or otherwise defend the
instant lawsuit mitigates the harshness of a default judgment. See td.; see also
Taylor v. City of Baton Rouge, 39 F. Supp. 3d 807, 814 (M.D. La. 2014). Finally, the
record contains no facts giving rise to good cause to set aside the default judgment if
challenged by Defendant. See Lindsey, 161 F.3d at 893. The Court finds that the
Lindsey factors weigh in favor of entry of default judgment in favor of Plaintiff.
B. Whether Plaintiff's Complaint Establishes a Viable Claim for
Relief
_ The Court must also assess the merits of Plaintiff's claims to determine
whether Plaintiffs Complaint establishes a viable claim for relief.
Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975);
Hamdan v. Tiger Bros. Food Mart, Inc., No. CV 15-00412, 2016 WL 1192679, at *2
(M.D. La. Mar. 22, 2016).
Plaintiff contends that it is entitled to collect the total agreed upon price of
$277,200 for the sale and delivery of the masks to Defendant, plus damages in the
form of interest, attorneys’ fees, and other allowable costs. (Doc. 19-1, p. 5). Plaintiff
contends that it has satisfied all conditions for recovery under Louisiana’s Open
Account Statute. Ud. at p. 6). Alternatively, Plaintiff asserts a breach of contract
claim,
i. Open Account □
Under Louisiana law, actions on an open account are controlled by Louisiana
Revised Statutes § 9:2781, which allows a claimant to recover reasonable attorney
fees for the prosecution and collection of an open account claim. Factor King, LLC v.
Block Builders, LEC, 193 F. Supp. 8d 651, 658 (M.D. La. 2016). An open account is
defined as “any account for which a part or all of the balance is past due, whether or
not the account reflects one or more transactions and whether or not at the time of
contracting the parties expected future transactions.” Jd. (citing
La. Rev. Stat. § 9:2781(D)).
In determining whether a contract falls under the open account statute, courts
in Louisiana consider whether the “total cost or price fis] . . . left open or
undetermined.” Id. (citing Tri-Par. Elec. Supply, Inc. v. Cypress Bend Investments,
LLC, 2012-787 (La. App. 3d Cir. 12/12/12), 105 So.8d 1036, 1039 (citation and
internal quotation marks omitted); Ormet Primary Aluminum Corp. v. Ballast Techs.,
Inc., 486 Fed. App’x. 297, 301 (5th Cir. 2011) (concluding that an open account existed
because there was an undetermined total)). Courts also consider “(1) whether other
business transactions between the parties existed; (2) whether one party extended a
line of credit to another; (3) whether there are running or current dealings; and
(4) whether there are expectations of future dealings.” Jd. at 659 (citing
Tech. Eng'g Consultants, LEC v. Beall, No. 11-1579, 2012 WL 4141425, at *3
La. Sept. 14, 2012) (citing Paz v. BG Real Estate Services, Inc,
921 So. 2d 186, 188 (La. 2005)). However, the open account statute does not require
multiple transactions or for parties to anticipate future transactions. Jd. (citing
Frey Plumbing Co., Inc. v. Foster, 2007-1091 (La. 2/26/08), 996 So. 2d 969, 972).
In Factor King, LLC v. Block Builders, LLC, the Court found that an open
account did not exist between the parties for the following reasons: (1) the parties
entered into a fixed price contract; (2) the parties did not engage in other business
transactions; (8) the contract at issue did not include a line of credit, a fluctuating
price, or a running account; and (4) the parties did not engage in running or current
dealings or have an expectation of future dealings. Id. at 659. The Court finds the
instant case similar. Plaintiffs Complaint indicates that the parties entered into a
fixed price contract. The record contains no evidence that the parties engaged in other
business transactions or that the parties engaged in running dealings or had an
expectation of future dealings. The record contains no evidence that the contract at
issue contained a line of credit, fluctuating price, or running account. Accordingly,
based on the record before the Court, the Court finds recovery under Louisiana’s
Open Account Statute imappropriate.
li. Breach of Contract
Alternatively, Plaintiff contends that it is entitled to recover for breach of
contract. (Doc. 19-1, p. 6). “A contract is an agreement by two or more parties whereby
obligations are created, modified, or extinguished.” JMF Med., LLC □□□
Team Health, LLC, 490 F. Supp. 38d 947, 978 (M.D. La. 2020) (citing
La. Civ. Code art. 1906). “The central elements of a breach of contract action are the
existence of a contract, a party’s breach thereof, and damages.” JMF Med., LLC,
490 F. Supp. 3d at 973 (citing Favrot v. Favrot, 2010-0986 (La. App. 4th Cir. 2/9/11),
68 So, 3d 1099, 1108-09 (quoting Hercules Machinery Corp. v. McKlwee Bros., Inc.,
2002 WL 31015598, at *9 (E.D. La. Sept. 2, 2002)). Stated differently, the elements
of a cause of action for breach of contract are: “(1) the obligor’s undertaking of an
obligation to perform (the contract), (2) the obligor failed to perform the obligation
(the breach), and (3) the failure to perform resulted in damages to the obligee.”
JMF Med., LLC, 490 F. Supp. 3d at 973 (citing Denham Homes, L.L.C. □□□
_ Teche Federal Bank, 14-1576 (La. App. 1st Cir. 9/18/15), 182 So. 3d 108,118.
Here, the Purchase Order indicates that Plaintiff sold 2,777,20 masks to
Defendant for $277,200. (Doc. 6-2). The Purchase Order is signed by Greg Stewart,
executive officer for Defendant. (/d.; Doc. 6, {| 7, 14). Defendant was to pay “cash
upon delivery.” (Doc. 6-2), To date, Defendant has failed to pay. (Doc. 6, J 13).
Accordingly, and in the absence of any indication to the contrary from Defendant, the
Court finds that Plaintiff has satisfied the elements of its breach of contract claim.
There is a contract between the parties whereby Plaintiff agreed to provide masks
and Defendant agreed to pay for the masks. (Doc. 6-2). Defendant breached the
contract because it failed to pay the agreed upon price. (Doc. 6, § 13). Plaintiff has
incurred damages as a result. Judgment is warranted in Plaintiffs favor.
C. Damages
A defaulting defendant “concedes the truth of the allegations of the Complaint
concerning defendant's liability, — but not damages.”
ins. Co. of the W. vu. H & G Contractors, Inc., 2011 WL 4738197, *4
Tex., Oct. 5, 2011). A court's award of damages in a default judgment must be
determined after a hearing, unless the amount claimed can be demonstrated “by
detailed affidavits establishing the necessary facts.” United Artists Corp. v. Freeman,
605 F.2d 854, 857 (5th Cir. 1979). Ifa court can mathematically calculate the amount
of damages based on the pleadings and supporting documents, a hearing is
unnecessary. Joe Hand Promotions, Inc. v. Alima, No. 3:18—CV—0889-B,
2014 WL 1682158, at *3 (N.D. Tex. Apr. 22, 2014) (citing James v. Frame,
6 F.3d 307, 310 (5th Cir. 1993)).
Here, Plaintiff justifies the damages sought with the following: (1) Declaration
of Gregory N. Nelson, a member of Plaintiff; (2) Declaration of Gabriel G. Silva,
Plaintiffs Counsel; (8) Purchase Order; (4) Invoice; (5) Globaltranz-issued Bills of
Lading; (6) freight invoice; (7) payment receipt for freight payments made to
Globaltranz; (8) first and second demand letters sent from Plaintiff to Defendant
through its executive officer, Greg Stewart; (9) first and second demand letters sent
from Plaintiff to Defendant through Defense Counsel, Christopher F. Klink; and
(10) FedEx delivery confirmation. (Doc. 6-2-Doc. 6-14; Doc. 19-2; Doc. 19-3).
A review of the record reflects that the elements of damages are
mathematically calculable based on the supporting documentation and affidavits
submitted; thus, a hearing is not necessary. Plaintiff sold and delivered to Defendant
2,777,20 masks for the agreed-upon price of $277,200. (Doc. 6-2), Additionally,
Plaintiff paid shipping costs in the amount of $2,900 to deliver the masks to
Defendant. (Doc. 6, 10, 12; Doc. 6-4—Doc. 6-8). Accordingly, judgment is warranted
in Plaintiffs favor and against Diefeudant in the amount of $280,100.
D. Attorney’s Fees and Costs
Plaintiff contends that it is entitled to attorney’s fees and costs in this matter
pursuant to Louisiana’s Open Account Statute. (Doc. 19-1, p. 6). Specifically, Plaintiff
seeks the following: (1) $36,705.50 in attorney’s fees; (2) $402 in filing fees; (8) $255 in
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service of process costs; (4) $131.10 in other costs associated with the prosecution of
this action. (Doc. 19-1, p. 6—7).
Because Plaintiffs only theory for recovery of attorney’s fees arises out of
Louisiana’s Open Account Statute; however, the Court found that recovery under this
Statute was inappropriate, the Court will deny Plaintiffs request for attorney’s fees.
Plaintiff does not point to a provision in the relevant contract that would provide for
attorney's fees.
Plaintiff may seek costs in a separate motion pursuant to Federal Rule of
Civil Procedure 54 and Local Civil Rule 54.
IH. CONCLUSION
Accordingly,
IT IS ORDERED that Plaintiffs Motion for Entry of Default Judgment
(Doc. 19) is GRANTED IN PART.
IT IS FURTHER ORDERED that final judgment is hereby entered in favor
of Plaintiff EW Polymer Group, LLC and against Defendant GSX International
Group, Inc. in the amount of $280,100, which includes the contractual agreed upon
price of $277,200 and shipping costs in the amount of $2,900,
IT IS FURTHER ORDERED that that post-judgment interest is to be
awarded as provided in 28 U.S.C. § 1961 and are to be taxed against Defendant
GSX International Group, Inc.
il
IT IS FURTHER ORDERED that Plaintiffs Motion for Entry of Default
Judgment (Doc. 19) is DENIED IN PART.
IT IS FURTHER ORDERED that Plaintiffs request for attorney’s fees is
DENIED.
IT IS FURTHER ORDERED that Plaintiff may seek costs in a separate
motion pursuant to Federal Rule of Civil Procedure 54 and Local Civil Rule 54.
te
Baton Rouge, Louisiana, this day of August, 2022
JUDGE BRIAN A, JACKSON
UNITED STATE RICT COURT
MIDDLE DISTRIST-OF LOUISIANA
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