The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:19-cv-00028-RJC-DSC
AMAZON LOGISTICS, INC., )
)
Plaintiff, )
)
v. )
) ORDER
UN4GIVEN TRANSPORTATION, INC., )
)
Defendant. )
)
THIS MATTER comes before the Court on Plaintiff’s Motion for Default
Judgment. (Doc. No. 8.)
I. BACKGROUND
Plaintiff Amazon Logistics, Inc. (“Plaintiff”) is a transportation logistics
company and is the registered owner of two trailers, identified as V210487 and
V210650, and related dolly converters (the “Trailers”). (Doc. No. 1, ¶ 7.) Defendant
Un4Given Transportation, Inc. (“Defendant”) is a motor carrier registered with the
Federal Motor Carrier Safety Administration as USDOT 2896549 and MC973531.
(Doc. No. 1, ¶ 8.)
Plaintiff and Defendant are parties to a Linehaul Service Provider Agreement
(the “Agreement”) pursuant to which Defendant agreed to provide Plaintiff truckload
transportation services, including receiving, loading, storing, transporting,
delivering, and unloading goods. (Doc. No. 1, ¶ 9.) Defendant further agreed to use
the Trailers exclusively for the services contemplated in the Agreement and to return
the Trailers in substantially the same condition. (Doc. No. 1, ¶ 18.) On or about July
4, 2017, Defendant possessed the Trailers to transport Plaintiff’s goods from
Plaintiff’s fulfillment center in Baltimore, Maryland to Plaintiff’s fulfillment center
in Chattanooga, Tennessee. (Doc. No. 1, ¶ 11.) Defendant’s driver checked the
Trailers into the Chattanooga facility using his cell phone.1 (Doc. No. 1, ¶ 11.) But,
from July 2 through October 29, 2017, the GPS units on the Trailers showed the
Trailers were located at Defendant’s storage yard in Gastonia, North Carolina. (Doc.
No. 1, ¶ 12.) The GPS units stopped showing a location on October 29, 2017, which
Plaintiff presumes is due to the batteries dying. (Doc. No. 1, ¶ 12.)
On January 18, 2019, Plaintiff filed a Complaint against Defendant asserting
claims for breach of contract, conversion, and a declaratory judgment. (Doc. No. 1, at
3–4.) According to Plaintiff’s Affidavit of Service, Defendant was properly served with
the summons and a copy of the Complaint on January 25, 2019. (Doc. Nos. 4 to 4-2.)
On February 27, 2019, the Clerk of Court entered default against Defendant. (Doc.
No. 7.)
On June 5, 2019, Plaintiff filed the instant Motion for Default Judgment. (Doc.
No. 8.) The motion is ripe for resolution.
II. STANDARD OF REVIEW
Rule 55 of the Federal Rules of Civil Procedure governs Plaintiff’s Motion for
Default Judgment. “Rule 55 sets forth a two-step process for obtaining a default
judgment.” Brown v. Prime Star Grp., Inc., No. 3:12-cv-165, 2012 U.S. Dist. LEXIS
1 The Complaint does not allege when this occurred.
141495, at *5 (W.D.N.C. Sept. 30, 2012). A plaintiff must first seek an entry of default
under Rule 55(a). L & M Cos. v. Biggers III Produce, Inc., No. 3:08-cv-309, 2010 U.S.
Dist. LEXIS 46907, at *14 (W.D.N.C. Apr. 9, 2010). Rule 55(a) states that “[w]hen a
party against whom a judgment for affirmative relief is sought has failed to plead or
otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must
enter the party’s default.” Fed. R. Civ. P. 55(a). “Upon the entry of default, the
defaulted party is deemed to have admitted all well-pleaded allegations of fact
contained in the complaint.” Brown, 2012 U.S. Dist. LEXIS 141495, at *4.
“After the clerk has entered a default, the plaintiff may seek a default
judgment.” Silvers v. Iredell Cty. Dep’t of Soc. Servs., No. 5:15-cv-00083, 2016 U.S.
Dist. LEXIS 13865, at *9 (W.D.N.C. Feb. 3, 2016). “The entry of a default judgment
is left to the sound discretion of the court, and no party is entitled to a favorable entry
of default judgment as a matter of right.” Dish Network L.L.C. v. Hatley, No. 5:16-
cv-00088, 2017 U.S. Dist. LEXIS 81390, at *6 (W.D.N.C. May 25, 2017). “Without
question, because the American civil litigation system is adversarial by nature, it is
the ‘strong policy’ of the Fourth Circuit to decide cases on their merits.” Silvers, 2016
U.S. Dist. LEXIS 13865, at *9 (citing Colleton Prep. Academy, Inc. v. Hoover
Universal, Inc., 616 F.3d 413, 417–21 (4th Cir. 2010)). Default judgment is proper
“only if the well-pleaded factual allegations in a complaint both establish a valid
cause of action and entitle the plaintiff to an award of damages or other relief.” i play.
Inc. v. D. Catton Enter., LLC, No. 1:12-cv-22, 2015 U.S. Dist. LEXIS 29870, at *6
(W.D.N.C. Mar. 10, 2015). In so deciding, courts in this district apply the standard
used to evaluate a Rule 12(b)(6) motion to dismiss, and “a pleading that offers mere
‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action
will not do.’” Silvers, 2016 U.S. Dist. LEXIS 13865, at *18–19 (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)).
“If the Court determines that liability is established, it must then determine
the appropriate amount of damages.” Bogopa Serv. Corp. v. Shulga, No. 3:08-cv-365,
2011 U.S. Dist. LEXIS 17408, at *4 (W.D.N.C. Feb. 8, 2011). “The court must make
an independent determination regarding damages, and cannot accept as true factual
allegations of damages.” EEOC v. Carter Behavior Health Servs., No. 4:09-cv-122,
2011 U.S. Dist. LEXIS 129493, at *9–10 (E.D.N.C. Oct. 7, 2011). “[A] court may enter
a default judgment as to damages with or without a hearing. As long as there is an
adequate evidentiary basis in the record for an award of damages, the Court may
make such a determination without a hearing.” Bogopa Serv. Corp., 2011 U.S. Dist.
LEXIS 17408, at *5 (citation omitted).
III. DISCUSSION
The Court has entered default against Defendant. (Doc. No. 7.) The Court
thus proceeds to analyzing the propriety of default judgment on Plaintiff’s claims for
breach of contract, conversion, and a declaratory judgment.
Plaintiff alleges that Defendant breached the Agreement by “converting the
Trailers for its own use or benefit and/or failing to timely return the Trailers.” (Doc.
No. 1, ¶ 19.) The Complaint, however, is devoid of factual allegations that Defendant
used the Trailers for its own benefit; the Complaint merely asserts that the GPS units
showed the Trailers were located at Defendant’s storage yard from July 2 through
October 29, 2017. The Complaint also lacks any factual allegations as to Defendant’s
obligation under the Agreement to return the Trailers at a specified time and/or upon
certain conditions. This is especially problematic because the allegations regarding
the terms of the Agreement, although scant, tend to imply that Defendant was to
remain in possession of the Trailers for at least some limited period of time in order
to provide truckload transportation services to Plaintiff. Therefore, even taking the
well-pleaded allegations of the Complaint as true, without a copy of the Agreement
or further evidence regarding the specific terms of the Agreement and Defendant’s
conduct in breach thereof, the Court cannot conclude that Plaintiff has established
Defendant’s liability for breach of the Agreement.
The well-pleaded allegations of the Complaint are also insufficient to establish
Defendant’s liability for conversion. Plaintiff alleges that Defendant committed
conversion by wrongfully exercising control and dominion over the Trailers.
“Conversion is the unauthorized assumption and exercise of the right of ownership
over the goods or personal chattels belonging to another, to the alteration of their
condition or the exclusion of an owner’s rights.” White v. Consol. Planning, Inc., 603
S.E.2d 147, 165 (N.C. Ct. App. 2004) (quotation marks omitted). “There are, in effect,
two essential elements of a conversion claim: ownership in the plaintiff and wrongful
possession or conversion by the defendant.” Variety Wholesalers, Inc. v. Salem
Logistics Traffic Servs., LLC, 723 S.E.2d 744, 747 (N.C. 2012). However, “[w]here
there has been no wrongful taking or disposal of the goods, and the defendant has
merely come rightfully into possession and then refused to surrender them, demand
and refusal are necessary to the existence of the tort.” White, 603 S.E.2d at 165.
Here, Defendant rightfully possessed the Trailers to transport Plaintiff’s goods
from Plaintiff’s fulfillment center in Baltimore, Maryland to its fulfillment center in
Chattanooga, Tennessee. Thus, demand and refusal are necessary to establish
Defendant’s liability for conversion. As Plaintiff has neither alleged nor offered
evidence that it demanded Defendant return the Trailers and Defendant refused to
do so, Plaintiff has not established Defendant’s liability for conversion. Levin v.
Jacobson, 2015 NCBC LEXIS 111, at *27–28 (N.C. Super. Ct. Dec. 7, 2015) (granting
summary judgment in favor of defendant on plaintiffs’ conversion claim because
plaintiffs “neither alleged nor offered proof of demand and refusal”).
Plaintiff’s last claim for relief seeks a declaratory judgment that Plaintiff is
entitled to the sole possession and control of the Trailers. The Declaratory Judgment
Act provides that “[i]n a case of actual controversy within its jurisdiction . . . any court
of the United States . . . may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not further relief is or could be
sought.” 28 U.S.C. § 2201. For there to be a case or controversy justiciable for the
Court, plaintiff must present a dispute that is “definite and concrete, touching the
legal relations of parties having adverse legal interests.” MedImmune, Inc. v.
Genentech, Inc., 549 U.S. 118, 127 (2007). The dispute must also be “real and
substantial,” admitting “of specific relief through a decree of a conclusive character,
as distinguished from what the law would be upon a hypothetical state of facts.” Id.
The question for the Court is thus “whether the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to warrant the issuance
of a declaratory judgment.” Id.
Plaintiff contends that an actual controversy exists between Plaintiff and
Defendant because Plaintiff is the owner of the Trailers and “Defendant apparently
believes otherwise as it refuses to turn over the Trailers to Plaintiff and/or continue
[sic] to wrongfully detain the Trailers.” (Doc. No. 1, ¶ 28.) As discussed above,
however, Plaintiff does not allege that it demanded Defendant return the Trailers—
Plaintiff alleges that the Trailers were located at Defendant’s storage yard for
approximately four months, but does not allege that it ever contacted or attempted to
contact Defendant regarding the Trailers during this four-month period or at any
other time. Absent such a demand and refusal, the Court cannot conclude that there
is a substantial controversy of sufficient immediacy and reality to warrant the
issuance of a declaratory judgment. Moreover, under the circumstances of this case
where Plaintiff has failed to establish Defendant’s liability as to Plaintiff’s related
claims for relief, “this court is wary of entering default judgment [on a claim] for
declaratory relief . . . where the merits of [the] case have not been fully litigated.”
Teachers Ins. Co. v. Prather, No. 2:11-cv-00397, 2012 U.S. Dist. LEXIS 3651, at *4–
5 (S.D. W. Va. Jan. 11, 2012) (citing Restatement 2d Judgment § 33 (stating that a
court “should not make a declaration upon default on the basis of the pleadings alone
but should require the plaintiff to present enough evidence to warrant the granting
of declaratory relief’)). Accordingly, in the exercise of its discretion under Rule 55(b),
the Court concludes that Plaintiff is not entitled to default judgment on its claim for
declaratory relief.
IV. CONCLUSION
IT IS THEREFORE ORDERED that Plaintiff's Motion for Default Judgment,
(Doc. No. 8), is DENIED without prejudice. Plaintiff shall have thirty days from the
date of this Order to submit a renewed motion for default judgment and supporting
materials.
Signed: October 8, 2019
Robert J. Conrad, Jr.
United States District Judge “ee