Siegmeister v. Benford

TODD SIEGMEISTER, Plaintiff, v. VASSAL BENFORD, LEON DAVIS t/a NEW NATION VENTURESand RONALD M. LEBOW, Esquire Attorney at law,State of California, and Jane Doe and John Doe 1 to 5, Defendants.

Civil Action No. 15-07099

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

June 1, 2017

NOT FOR PUBLICATION

OPINION

John Michael Vazquez, U.S.D.J.

I. INTRODUCTION

This matter comes before the Court on pro se Plaintiff Todd Siegmeister's ("Plaintiff") unopposed motion for default judgment against Defendants Vassal Benford; Leon Davis, trading as New Nation Ventures; and Ronald M. Lebow (collectively "Defendants") under Fed. R. Civ. P. 55(b). D.E. 12. The Court reviewed all submissions made in support of the motion, and considered the motion without oral argument pursuant to L. Civ. R. 78.1(b). For the reasons that follow, Plaintiff's motion is denied.

II. FACTS¹ AND PROCEDURAL HISTORY

Around April 2014, Plaintiff alleges that he entered into a transaction where he was to purchase "a parcel of rough diamonds" from New Nation Ventures for $10,000,000. Compl. at 4, ¶ 3. Benford negotiated the terms of the transaction on behalf of New Nation Ventures and requested that Plaintiff "produce proof of financial capacity" to purchase the diamonds, which Plaintiff provided, and Defendants accepted.² Id., ¶¶ 4-5. Additionally, Benford, Davis, and Lebow told Plaintiff that as a condition precedent to purchasing the diamonds, Plaintiff must deposit $50,000 into Lebow's attorney trust account, which would be applied toward the full purchase price. Id. at 5-6, ¶¶ 6, 11. On April 30, 2014, Plaintiff completed the transfer. Id. at 6, ¶ 12.

In addition, on April 30, 2014, Plaintiff entered into a memorandum of understanding (the "MOU") with Benford, Davis, and New Nation Ventures. Id. at 5, ¶ 9. Lebow, as attorney for Benford, Davis, and New Nation Ventures, prepared the MOU. Id. The MOU stated that "the transaction was to begin in Los Angeles, no later than Thursday May 1, 2014," and that if it was not concluded within five business days, the deposited $50,000 was to be returned to Plaintiff. Id. at 6, ¶ 13.

Plaintiff alleges that Defendants sent him emails leading him to believe that the diamonds were located in Benford's home and were to be sent to a "Brinks [s]ecurity facility located in Los Angeles, California," and maintained there by Benford. Id. at 6-7, ¶ 14. On May 1, 2014, Plaintiff and his gemologist went to the Brinks security facility to inspect the diamonds only to discoverthat no such diamonds existed at the location. Id. at 7, ¶ 15. Plaintiff alleges that to date, the transaction has not taken place and no funds have been returned to him. Id. at 6, ¶ 13.

Plaintiff filed a Complaint alleging causes of action for (1) breach of contract, (2) breach of implied contract, (3) fraudulent inducement, (4) fraud, and (5) unjust enrichment. Default was entered against each Defendant. Plaintiff subsequently filed this motion for default judgment. D.E. 12.

III. LAW AND ANALYSIS

A. Standard of Review

"Once a party has defaulted, the consequence is that 'the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" Teamsters Pension Fund of Phila. & Vicinity v. Am. Helper, Inc., No. 11-624, 2011 WL 4729023, at *2 (D.N.J. Oct. 5, 2011) (quoting DIRECTV, Inc. v. Pepe, 431 F.3d 162, 165 n.6 (3d Cir.2005)). "The entry of a default judgment is largely a matter of judicial discretion, although the Third Circuit has emphasized that such 'discretion is not without limits, however, and [has] repeatedly state[d] [its] preference that cases be disposed of on the merits whenever practicable.'" Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008) (quoting Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir.1984)).

Prior to entering a default judgment, the court is required to: "(1) determine it has jurisdiction both over the subject matter and parties; (2) determine whether defendants have been properly served; (3) analyze the Complaint to determine whether it sufficiently pleads a cause of action; and (4) determine whether the plaintiff has proved damages." Moroccanoil, Inc. v. JMG Freight Grp. LLC, No. 14-5608, 2015 WL 6673839, at *1 (D.N.J. Oct. 30, 2015). Additionally, the Court must consider the following three factors: "(1) prejudice to the plaintiff if default isdenied, (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); see also Nationwide Mut. Ins. Co. v. Starlight Ballroom Dance Club, Inc., 175 F. App'x 519, 522 (3d Cir. 2006).

B. Jurisdiction and Service

"Before entering a default judgment as to a party 'that has not filed responsive pleadings, the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.'" HICA Educ. Loan Corp. v. Surikov, No. 14-1045, 2015 WL 273656, at *2 (D.N.J. Jan. 22, 2015) (quoting Ramada Worldwide, Inc. v. Benton Harbor Hari Ohm, L.L.C., No. 08-3452, 2008 WL 2967067, at *9 (D.N.J. July 31, 2008)).

i. Subject Matter Jurisdiction

To establish diversity jurisdiction, pursuant to 28 U.S.C. § 1332(a), "the party asserting jurisdiction must show that there is complete diversity of citizenship among the parties" as well as an amount in controversy that exceeds the statutory threshold. Schneller ex rel Schneller v. Crozer Chester Med. Ctr., 387 Fed. App'x 289, 292 (3d Cir. 2010). Here, Plaintiff states that he resides in Lake Hopatcong, New Jersey as well as East Lagon, Ghana. Compl. at 1. Plaintiff alleges that Lebow, Benford, Davis, and New Nation Ventures are all residents of California. Id. at 2. Plaintiff claims damages in an amount greater than the statutory threshold. Id. at 12; Roy v. Ramsey Moving Sys., No. 15-3330, 2016 WL 1163932, at *2 (D.N.J. Mar. 23, 2016) (stating that "[i]n diversity cases, courts generally rely on the plaintiff's allegations of the amount in controversy contained in the complaint" and that "[t]he sum claimed by the plaintiff controls if the claim is apparently made in good faith" (internal quotation marks omitted)). Accordingly, the Court has diversityjurisdiction because Plaintiff and Defendants are citizens of different states and the amount in controversy exceeds the statutory threshold.

ii. Personal Jurisdiction

"[A] federal district court may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state." Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007). In New Jersey, "courts may exercise jurisdiction over a non-resident defendant to the uttermost limits permitted by the United States Constitution." Nicastro v. McIntyre Mach. Am., Ltd., 201 N.J. 48, 72 (2010) (internal quotation marks omitted), rev'd on other grounds sub nom., J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011). "Accordingly, in determining whether personal jurisdiction exists, we ask whether, under the Due Process Clause, the defendant has certain minimum contacts with [New Jersey] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (internal quotation marks omitted).

Personal jurisdiction may be established by means of general jurisdiction or specific jurisdiction over a defendant. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011) (noting that "opinions in the wake of the pathmarking International Shoe decision have differentiated between general or all-purpose jurisdiction, and specific or case-linked jurisdiction"). "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home." Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). "With respect to a corporation, the place of incorporation and principal place of business are paradigm bases for general jurisdiction." Id. (internal quotation marks omitted). Here, Plaintiff does not allege facts to support a finding of general jurisdiction in New Jersey over any Defendants. Lewbow, Benford,and Davis are not New Jersey residents and New Nations Ventures is neither incorporated in New Jersey nor does it have its principal place of business there. Therefore, the question turns on whether New Jersey has specific jurisdiction over Defendants.

Specific jurisdiction requires that the defendant "has purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal citations and quotation marks omitted). A court's exercise of personal jurisdiction "requires some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880 (2011) (emphasis added) (internal quotation marks omitted). Additionally, due process requires that "maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)); see also O'Connor, 496 F.3d at 316 (discussing three-step process in determining personal jurisdiction). Importantly, "the defendant's conduct and connection with the forum State [must be] such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

"In determining whether personal jurisdiction can be established in connection with a breach of contract claim, the court 'must...