The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:22-CV-00083-KDB-DCK
RAYCAP ASSET HOLDINGS
LTD AND NOBLE BOTTLING,
LLC,
Plaintiffs,
v. ORDER
JORDANA WEBER; ET AL.,
Defendants.
THIS MATTER is before the Court on Plaintiffs’ Motion for Default Judgment against
Defendants Reinhart Holdings LLC, Jason M. Torres and Jordana Weber1 (“the Defendants”).
(Doc. No. 47). The Court has reviewed the Motion and other relevant pleadings of record. For the
reasons briefly discussed below, the Court will grant the Motion.
I. PROCEDURAL BACKGROUND
The Plaintiffs filed their complaint on March 2, 2022, which was amended on March 31,
2022. See Doc. Nos. 1, 11. The Defendants were properly served with the Complaint and
Summons. See Doc. Nos. 6-8, 12, 15-17. Reinhart and Torres failed to answer or have an attorney
make an appearance. Weber, through counsel, moved to dismiss for Lack of Jurisdiction and for
Failure to State a Claim, which this Court denied. (Doc. Nos. 8, 28). Following the denial of her
Motion to Dismiss, Weber’s counsel moved to withdraw and for an extension of time to answer
1 The motion was also filed against Defendant Arthur Sherman, who has now retained counsel that
has made an appearance in the action. (Doc. No. 49). Mr. Sherman has filed a motion to set aside
the entry of default against him. (Doc. No. 50).
the complaint. (Doc. Nos. 31, 32). The Court granted the motions and directed Weber to file her
answer by September 6, 2022. (Doc. No. 33). Weber failed to answer or have an attorney make an
appearance after the withdrawal of her initial counsel. Accordingly, an entry of Default has been
entered against the Defendants. (Doc. Nos. 21-22, 45-46).
II. LEGAL STANDARD
“Entry of default judgment is left to the discretion of the court.” S.E.C. v. Lawbaugh, 359
F. Supp. 2d 418, 421 (D. Md. 2005). Fed R. Civ. P. 55. Rule 55(b) “authorizes the entry of a default
judgment when a Defendant fails 'to plead or otherwise defend' in accordance with the Rules.”
United States v. Moradi, 673 F.2d 725, 727 (4th Cir.1982). When a defendant defaults, he admits
the complaint’s well-pleaded allegations of facts. Ryan v. Homecomings Fin. Network, 253 F.3d
778, 780 (4th Cir. 2001). That said, “[t]he defendant is not held . . . to admit conclusions of law,”
as “a default is not treated as an absolute confession by the defendant of his liability and of the
plaintiff’s right to recover.” Ryan, 253 F.3d at 780 (quoting Nishimatsu Constr. Co. v. Houston
Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). To determine whether to enter judgment on a
defendant’s default, the court examines whether the well-pleaded allegations in the complaint
support the relief sought in the case. Id. There must be a sufficient basis in the pleadings for the
judgment entered.” Nishimatsu, 515 F.2d at 1206.
If the court determines that liability has been established, the court must then determine
damages. J & J Sports Prods., Inc. v. Romenski, 845 F. Supp. 2d 703, 706 (W.D.N.C. 2012). Unlike
allegations involving liability, allegations about damages are not treated as admitted by a
defendant’s default. Lawbaugh, 359 F. Supp. 2d at 422. “The court must make an independent
determination regarding damages.” Romenski, 845 F. Supp. 2d at 706. In determining damages,
the court may conduct an evidentiary hearing or rely on affidavits or documentary evidence in the
record. Id.
III. DISCUSSION2
The Plaintiffs’ Complaint sets forth claims under North Carolina law against Reinhart,
Torres, and Weber for: (1) Fraud (Doc. No. 11 ¶¶ 43-49, 62-71); (2) Conversion (Doc. No. 11 ¶¶
50-54). As outlined above, Reinhart, Torres and Weber have failed to answer the Amended
Complaint. The Court has reviewed the allegations in the Plaintiffs’ Amended Complaint, which
are well-pleaded and therefore taken as true and finds that the Plaintiffs have established these
Defendants’ liability on each of their claims. The Plaintiffs are, therefore, entitled to entry of a
default judgment on each claim against Reinhart, Torres and Weber stated in their Amended
Complaint.
Having determined that these Defendants are liable to the Plaintiffs, the Court must make
a determination of the Plaintiffs’ damages based on the record. As noted above, allegations about
damages are not considered admitted by a defendant’s default. Lawbaugh, 359 F. Supp. 2d at 422.
However, here the damages analysis is straightforward. In support of their Motion the Plaintiffs
have attached a bank statement showing the transfer of $2,765,000 from Raycap to Reinhart and
the later withdrawal of those funds. (See Doc. No 48-1). The compensatory damages are therefore
$2,765,000.
2 This default judgment does not preclude the non-defaulting defendant, Nasar Aboubakare, from
contesting the Plaintiffs’ claims. See The Mary, 13 U.S. (9 Cranch) 126, 143, 3 L. Ed. 678 (1815)
(Marshall, C.J.) (”[i]n the same cause, a fact, not controverted by one party, who does not appear,
and therefore, as to him taken for confessed, ought not, on that implied admission, to be brought
to bear upon another who does appear, does controvert, and does disprove it”); see also Empire
Fire & Marine Ins. Co. v. Pandt-Brown, 322 F. Supp. 3d 694, 696 (E.D. Va. 2018).
Along with compensatory damages, the Plaintiffs also seek an award of $8,295,000 (three
times the amount of compensatory damages) as punitive damages or the amount of punitive
damages that the Court deems appropriate. Punitive damages may be awarded to “punish a
defendant for egregiously wrongful acts and to deter the defendant and others from committing
similar wrongful acts.” N.C. Gen. Stat. § 1D-1. These damages are available if the plaintiff proves
by clear and convincing evidence that fraud, malice, or willful or wanton conduct was present.
N.C. Gen. Stat. § 1D-15(a)-(b). Punitive damages may be awarded only if “that person participated
in the conduct constituting the aggravating factor giving rise to the punitive damages, or if, in the
case of a corporation, the officers, directors, or managers of the corporation participated in or
condoned the conduct constituting the aggravating factor giving rise to punitive damages.” N.C.
Gen. Stat. § 1D-15(c).
The Defendants have admitted, through default, that they participated in fraud resulting in
a loss to the Plaintiffs of $2,765,000.00, which gives rise to punitive damages. See Sunbelt Rentals,
Inc. v. Second Life Equip., LLC, No. 520CV00070KDBDSC, 2022 WL 791416, at *1 (W.D.N.C.
Mar. 14, 2022) (citing Slattery v. AppyCity, LLC, 2021 WL 1124059, at *11 (N.C. Bus. Ct. Mar.
24, 2021) (awarding punitive damages on a motion for default judgment based on the defendants’
admission of fraud). As to the amount of punitive damages, North Carolina law provides that the
award of punitive damages should bear “a rational relationship to the sum necessary to punish
defendants for their egregiously wrong acts and to deter Defendants and others from committing
similar wrongful acts, with a statutory maximum of $250,000 or three times the compensatory
damages, whichever is greater.” See AppyCity, LLC, 2021 WL 1124059, at *11 (citing N.C. Gen.
Stat. § 1D-25). When determining punitive damages the Court must consider the defendant’s
ability to pay. See N.C. Gen. Stat. § 1D-35(2)(i). The serious and deliberate nature of these
Defendants’ fraudulent scheme is undisputed. Moreover, there is no evidence concerning the
Defendants’ ability to pay the requested punitive damages award. The Court will therefore award
the statutory maximum, $8,295,00, in punitive damages to punish these Defendants for their
egregious conduct and deter others from committing similar acts.
Il. ORDER
NOW THEREFORE IT IS ORDERED THAT:
1. Plaintiffs’ Motion for Default Judgment (Doc. No. 47) is GRANTED;
2. Plaintiffs are awarded $2,765,000, jointly and severally, against Defendants
Reinhart, Torres, and Weber , in compensatory damages; and
3. Plaintiffs are awarded $8,295,000, jointly and severally, against Defendants
Reinhart, Torres and Weber, in punitive damages.
SO ORDERED ADJUDGED AND DECREED.
Signed: March 21, 2023
Kenneth D. Bell ey,
United States District Judge Hy oP