GIDDINGS v. BROWN & BROWN GENERAL CONTRACTORS, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ELBERT ANTHONY GIDDINGS, et al. : CIVIL ACTION

:

v. : No. 16-4917

:

BROWN & BROWN GENERAL :

CONTRACTORS, INC., et al. :

MEMORANDUM

Juan R. Sánchez, C.J. March 23, 2020

This case arises from two home improvement projects gone wrong. Plaintiffs Elbert

Anthony Giddings, Eunice Isaac, and Pullen A. Osagie sued Defendants Joel Brown and Brown

& Brown General Contractors, Inc. (collectively, Brown) alleging violations of two Pennsylvania

consumer protection statutes after Brown agreed to complete the projects, took Plaintiffs’ money,

and abandoned the projects. After Plaintiffs filed and served their Complaint, Brown failed to

appear. The Clerk of Court entered Brown’s default and Plaintiffs now move for default judgment

pursuant to Federal Rule of Civil Procedure 55. At the hearing to assess damages for default

judgment, Brown appeared and was represented by counsel. Upon hearing testimony and

reviewing both parties’ evidence as to damages, the Court will grant Plaintiffs’ motion, enter

judgment in Plaintiffs’ favor, and award Plaintiffs damages in the amount of $48,405.

BACKGROUND

Giddings and his mother Isaac own a home at 5826 N. 16th Street in Philadelphia. In

January 2016, a pipe in one of the bedrooms burst and damaged the property. Giddings then filed

an insurance claim to cover the costs to repair the damage. Giddings hired Brown to repair the

damage. Giddings had previously used Brown for other projects and had a personal relationship

with him. Unknown to Giddings, Brown was not a Pennsylvania licensed contractor.

Giddings permitted his insurance company to make his insurance payment directly to

Brown. Thereafter, the insurance company sent a check to Brown for $10,000. Giddings also

provided Brown with a second check for $7,000. Brown cashed these checks.

Brown did not provide Giddings with an invoice for the work that amounted to $17,000.

He did provide Giddings with a letter in which they agreed an invoice would be sent to Giddings’s

insurer. The invoice to the insurer stated Brown would remove the contents and dry the house for

a total of $13,500.

Although Giddings paid Brown $17,000, Giddings testified Brown completed no work on

his property. Brown, on the other hand, testified he completed all work that he was paid to

complete. Specifically, he testified as to the work he completed including boxing and removing all

furniture and belongings in the house. He testified he dried the floors from the water damage and

removed all damaged rugs. After clearing the contents and drying, Brown testified that he ran

nearly 52 feet of copper pipes, removed old insulation, and replaced a radiator. He also testified

and provided a photo of a hole in the floor that he repaired by covering with a wooden plank.

Despite the work Brown contends he completed, he admitted he did not complete the all

of the work he was hired to complete. He stated he stopped working because he was not paid

enough to complete the rest of the job. Once he stopped working, Brown testified there was $3,000

remaining from the money Giddings paid him. This money was never returned to Giddings.

Osagie owns a rental property at 2115 Simon Street in Philadelphia. In 2015, Osagie hired

Brown to renovate his property after it was damaged by previous tenants. He hired Brown based

on Giddings’s referral and recommendation. Unknown to Osagie, Brown was not a Pennsylvania

licensed contractor and was uninsured.

Brown was hired to complete several projects including installing new doors, windows,

cabinets, and flooring. Brown estimated the cost of labor and materials for these projects was

$11,500 and provided Osagie with an invoice for the work and materials. See Pls.’ Ex. D. Osagie

testified that he paid Brown $9,135. Brown conceded Osagie paid him this amount. Although

Osagie paid Brown, Osagie testified Brown completed no work.

Brown testified he completed at least three of the tasks on the invoice and had pictures to

prove his completed work. Nevertheless, Brown did not provide any photos showing the work was

completed. Brown also testified that after he completed certain work, there was a break in at

Osagie’s property and the work was destroyed. To the extent he purchased materials, Brown

testified all materials were stolen from the property.1 Again, there is no evidence this occurred.

Finally, although the invoice provided Brown would purchase new cabinets and install them,

Brown testified he never purchased cabinets. The cost for the cabinets was $4,600.

After the renovation was incomplete, Osagie hired someone else to complete the work.

Osagie spent $11,194.04 to complete the renovation. This cost included the exact same work and

materials Osagie hired Brown to complete and purchase.

Plaintiffs brought this action in September 2016. They allege Brown violated

Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) and Home

Improvement Consumer Protection Act (HICPA). See generally 73 Pa. Cons. Stat.

§§ 201-9.2, 517.10. After personally serving Brown twice, Brown failed to appear. Nonetheless,

after Plaintiffs discovered Brown was in bankruptcy, Plaintiffs recommended the case be resolved

1 Brown testified four windows, sheet rock, dry wall, mud, and insulation were stolen from

Osagie’s property the day after he purchased them.

in the bankruptcy case. The Court placed the case in suspense while Brown’s bankruptcy case was

pending.

On July 12, 2017, Plaintiffs filed a request to enter Brown’s default, which the Clerk of

Court entered. Plaintiffs then filed the instant motion for default judgment. Brown applied for

bankruptcy again in September 2017, and Plaintiffs offered to resolve the case in the bankruptcy

case. The Court placed the case in suspense while the second bankruptcy case was pending.

On September 30, 2019, Plaintiffs informed the Court that Brown’s bankruptcy case was

terminated. Because the issues in this case had not yet been resolved, Plaintiffs asked to proceed

with the motion for default judgment. The Court then scheduled the hearing and Plaintiffs served

Brown with their motion and the Court’s orders.

On January 7, 2020, the Court held a hearing on the motion for default judgment. At that

hearing, Brown appeared for the first time. He was also represented by counsel (whom he hired

only an hour before the hearing). Brown requested a continuance of the hearing, which the Court

denied. The Court nevertheless agreed to hold a second hearing on January 22, 2020, in which

Brown could provide his defense as to the amount of damages. At the first hearing, Giddings and

Osagie testified. They also presented evidence establishing the amount of money they each paid

Brown.

At the second hearing, Brown and one of his workers testified. According to their

testimony, they completed the required work. Although, some of their testimony established that

not all the work was completed. Brown also submitted photos of the properties, however, they

largely showed the properties before any work was completed. Brown did not provide any other

evidence that the work was completed.

DISCUSSION

Pursuant to Federal Rule of Civil Procedure 55, after the clerk has entered a defendant’s

default, a plaintiff must apply to the Court for entry of a default judgment. Courts must use “sound

judicial discretion” in determining whether to enter a default judgment. See E. Elec. Corp. of N.J.

v. Shoemaker Const. Co., 652 F. Supp. 2d 599, 604 (E.D. Pa. 2009). Before entering default

judgment, a court must consider “(1) prejudice to the plaintiff if default is denied, (2) whether the

defendant appears to have a litigable defense, and (3) whether defendant’s delay is due to culpable

conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000).

The entry of default judgment is appropriate in this case. Plaintiffs will be prejudiced if the

default judgment is not granted because they will be left without recourse for unknowingly

entering into invalid construction contracts with an unlicensed contractor. Plaintiffs have

established Brown violated the UTPCPL and the HICPA in several ways. Pursuant to § 201-9.2 of

the UTPCPL, and § 517.10 of the HICPA, they can now seek recourse for those violations.

Second, Brown does not appear to have a litigable defense (other than offsetting damages).

At the hearing, he admitted he is not a licensed Pennsylvania contractor, which alone is a HICPA

violation. See 73 Pa. Cons. Stat. § 517.3. The evidence provided by both parties also establishes

several other HICPA violations due to missing elements in the contracts, the excessive deposits

Brown accepted for the proposed work, and Brown’s failure to carry insurance for his contracts.

See id. § 517.7(a)(1)–(11).

Finally, Brown’s default in this case is due to his own conduct. There are letters from years

past discussing Brown’s efforts to evade service of documents in this case. See, e.g., Pls.’ Letter,

Oct. 26, 2017, ECF No. 21. Also, at the hearing, Brown admitted to receiving notice of the

underlying action and the hearing over a week before the hearing. He nonetheless chose to retain

counsel only an hour before the hearing. These continued actions in delaying these proceedings

and Plaintiffs’ recourse are sufficient for the Court to enter default judgment in this case. See E.

Elec. Corp. of N.J., 652 F. Supp. 2d at 607 (entering default judgment when all three factors

weighed in favor of doing so and no alternative sanction would be appropriate). The Court will

therefore enter default judgment in Plaintiffs’ favor.

The Court will also award damages totaling $48,405. Once a default judgment has been

entered, “the factual allegations of the complaint, except those relating to the amount of damages,

will be taken as true.” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). A party who

defaults does not admit the amount of damages the plaintiff seeks. See id. To determine the amount

of damages, a court may make its determination by conducting a hearing or by receiving detailed

affidavits from the plaintiff. See Fed. R. Civ. P. 55(b)(2)(B)–(C). In this case, the Court held a

hearing over two days at which both parties presented testimony and evidence. The Court will

consider all evidence in determining the appropriate amount of damages in this case.

Plaintiffs are entitled to actual damages or statutory damages of $100, whichever is greater,

for Brown’s liability under the UTPCPL and HICPA. See 73 Pa. Cons. Stat. § 201-9.2 (private

action for actual or statutory damages permitted for violations of UTPCPL); id. § 517.10 (any

violation of HICPA is a violation of UTPCPL). The Court may also award, in its discretion, treble

damages. See id. § 201-9.2. Finally, the Court may award costs and reasonable attorney fees. See

id.

In this case, Giddings and Isaac seek $17,000 in actual damages. Osagie seeks $9,135 in

actual damages. Plaintiffs also seek treble damages and attorney fees. Brown challenges the

damages because he contends he completed the relevant work for the money he was paid.

The Court will award Giddings and Isaac $7,000 in actual damages. Brown admitted he

accepted $17,000 from Giddings to complete certain renovation work. Neither Brown nor

Giddings, however, produced an invoice itemizing the work to be done and relative cost of each

task or materials amounting to $17,000.2 Making the determination of damages even more

difficult, Giddings testified Brown completed no work on his house, whereas Brown testified he

completed all $17,000 worth of work.

The Court concludes Brown did not complete $17,000 worth of work on Giddings’s home.

Brown’s testimony stated he removed contents from Giddings’s home, set up fans to dry the water

damage, repaired a hole in the floor, ran 52 feet of copper pipe, and replaced a radiator. Brown

testified he stopped working on the project after Giddings requested certain other work to be

completed such as wanting tile rather than carpet flooring. Further, Brown testified after he stopped

working, $3,000 remained of the $17,000 Giddings paid him. According to Brown, the $3,000 did

not cover Giddings’s new request for tile rather than carpet. Nevertheless, Brown did not provide

any evidence establishing the remaining $3,000 was returned to Giddings. As a result, Brown is

liable for the $3,000 Giddings paid and was never returned.

As for the remaining work, the Court is not convinced by Brown’s testimony that his work

of removing contents and drying water damage was worth $13,500 as described in the invoice to

Giddings’s insurer. Throughout his testimony, Brown never stated how much certain materials

cost, how much his and his workers’ labor cost, or what the total cost of the entire project was

intended to cost. His testimony in which he appeared certain that his work was worth exactly what

Giddings paid, is thus not supported by any calculation or extrinsic evidence. Even considering

2 Although Brown produced an invoice for $13,500 to cover the removal of furniture and carpets

and drying of the floors, this invoice was sent to the insurance company and did not bear

Giddings’s signature. See Defs.’ Ex. 2, at 3.

the invoice Brown sent to Giddings’s insurer, in which he estimated $13,500 for content and carpet

removal, fans, and dehumidifiers, the Court finds the work quoted to be overvalued. By Brown’s

own testimony, he stated he did much more than remove content, provide fans, and dehumidifiers

for $13,500. As a result, the invoice to the insurer does not provide a credible basis for estimating

the value of the work Brown provided.

Although Giddings testified that no work was completed, his testimony is undermined by

his allegations in the Complaint. Giddings alleged Brown began some work and then abandoned

the job. See Compl. ¶ 13–33. Specifically, Giddings alleged Brown demolished certain areas that

needed to be renovated. See id. ¶ 19. He also alleged Brown moved some of the contents in his

home to begin work. See id. ¶ 20. Finally, Giddings alleged Brown began some plumbing work

but never completed it. See id. ¶ 21. As a result, the Court finds Brown did some work on

Giddings’s home despite Giddings’s testimony to the contrary.

Considering the inconsistencies within both parties’ evidence, the Court finds Brown

completed approximately $10,000 worth of work. The Court accepts Brown’s testimony that he

completed the removal and drying of water damage. The Court also accepts Brown’s testimony

that he patched a hole in the floor because he provided a photo in which the hole was in fact

repaired. The Court discredits the rest of Brown’s testimony because it is not supported by photos

or other extrinsic evidence. The Court also finds Brown’s credibility questionable considering his

misrepresentation as a Pennsylvania licensed contractor and multiple violations under the

UTPCPL and HICPA.

As for Giddings, the Court accepts his testimony that Brown did not complete all the tasks

he paid for. This testimony is supported by text message records in which Giddings continuously

asked Brown to return and complete the tasks, but Brown failed to respond. See Pls.’ Ex. B.

Further, because Brown did not produce an itemized invoice in which Giddings signed, it appears

Giddings did not agree the work Brown completed was worth what he paid. Considering Giddings

received some work by way of removing of contents and carpet and drying water damage, the

Court finds that work worth nearly $10,000. Because Giddings paid Brown $14,000,3 Brown is

liable to Giddings for an additional $4,000.

In sum, Brown admitted he had $3,000 remaining after he ceased working on Giddings’s

house. This money must be returned. As for the remaining $14,000, the Court finds Brown

completed approximately $10,000 of work. Brown must now return the remaining $4,000 to

Giddings. The Court will thus award Giddings and Isaac a total of $7,000 in actual damages.

The Court will also award Osagie $9,135 in actual damages. By Brown’s own admission,

he accepted $9,135 from Osagie to complete the renovation job. Brown also admitted he was not

a licensed Pennsylvania contractor although Osagie testified that Brown represented himself as

one. In violation of HICPA, Brown admitted he did not carry liability or property damage

insurance on the renovation job. See 73 Pa. Cons. Stat. §§ 517.4, 517.7 (requiring home

improvement contracts to be completed by licensed Pennsylvania contractor and requiring liability

and property damage insurance). As a result of Brown’s failure to comply with HICPA, Osagie

suffered the loss of $9,135. Regardless of whether the Court accepts Brown’s testimony that he

completed some work and there was a break in and theft of the materials he purchased, had he

complied with HICPA, his insurance should have covered the loss of that work. Cf. Richards v.

Ameriprise Fin., Inc., 152 A.3d 1027, 1037–38 (Pa. 2016) (awarding plaintiff’s actual damages

3 This amount is the $17,000 Giddings paid Brown minus the $3,000 that went unused and

unreturned.

when loss was attributable to defendant’s misrepresentation and violation of UTPCPL). Therefore,

by accepting Brown’s own testimony, he is liable to Osagie in the amount of $9,135.

Next, the Court will award Plaintiffs treble damages. Under the UTPCPL, a court has

discretion to award up to three times the actual damages sustained. See 73 Pa. Cons. Stat. § 201-9.2.

The award of treble damages is not constrained by the common law requirements for punitive

damages. See Schwartz v. Rockey, 932 A.2d 885, 898 (Pa. 2007). Rather, treble damages are

warranted to further the remedial purposes of the UTPCPL when a defendant’s conduct is

intentional or reckless. See id. Courts have considerable discretion in awarding treble damages

under the UTPCPL. See Johnson v. Hyundai Motor Am., 698 A.2d 631, 639 (Pa. Super. Ct. 1997).

In this case, the Court finds Brown’s conduct regarding the home improvement projects

was reckless. First, Brown represented himself to Plaintiffs as a licensed contractor willing and

able to do their requested projects in Pennsylvania, although he was not. Second, Brown failed to

complete a valid contract or agreement for either of the projects as required under HICPA. Despite

taking nearly $27,000 from Plaintiffs, Brown showed little to no effort in assuring the funds were

allocated or invoiced properly. Third, Brown consistently ignored Giddings’s text messages

inquiring into the completion of the projects. See Pls.’ Ex. B. Even if Brown completed some of

his work, he failed to professionally communicate with his customers regarding their concerns.

Because Brown testified he is an experienced contractor with over 45 years’ experience, his

conduct regarding these two projects was reckless. Cf. E.S. Mgmt. v. Gao, 176 A.3d 859, 868 (Pa.

Super. Ct. 2017) (affirming award of treble damages where defendant acted recklessly by violating

landlord and tenant law and rushing potential lessees to pay an excessive security deposit which

was ultimately forfeited). As a result, the Court will award Plaintiffs’ treble damages. Giddings

and Isaac’s damages total $21,000 ($7,000 multiplied by three) and Osagie’s damages total

$27,405 ($9,135 multiplied by three).

Finally, the Court will exercise its discretion to award Plaintiffs attorney fees. Plaintiffs,

however, have not submitted an accounting for the Court to determine reasonable attorney fees.

See Richards, 152 A.3d at 1038–40 (discussing four factors to be considered in awarding attorney

fees under the UTPCPL, including time and labor, customary charges, amount in controversy, and

contingency or certainty of compensation). The Court will therefore grant Plaintiffs leave to file a

request for costs and reasonable attorney fees pursuant to 73 Pa. Cons. Stat § 201-9.2.

CONCLUSION

Entry of default judgment is appropriate in this case and Brown is liable to Plaintiffs. The

Court will award Giddings and Isaac $7,000 and Osagie $9,135 in actual damages. The Court will

also award Plaintiffs treble damages and reasonable attorney fees in amount to be determined.

Accordingly, the Court will enter default judgment against Brown for a total of $48,405—$21,000

for Giddings and Isaac and $27,405 for Osagie. The Court will grant Plaintiffs leave to file a

request for costs and fees pursuant to the UTPCPL.

An appropriate order follows.

BY THE COURT:

/s/ Juan R. Sánchez

Juan R. Sánchez, C.J.