Alc Mfg., Inc. v. J. Streicher & Co.

2020 NCBC 40
CourtNorth Carolina Business Court
DecidedMay 20, 2020
Docket19-CVS-1317
StatusPublished

This text of 2020 NCBC 40 (Alc Mfg., Inc. v. J. Streicher & Co.) is published on Counsel Stack Legal Research, covering North Carolina Business Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alc Mfg., Inc. v. J. Streicher & Co., 2020 NCBC 40 (N.C. Super. Ct. 2020).

Opinion

ALC Mfg., Inc. v. J. Streicher & Co., 2020 NCBC 40.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 19 CVS 1317

ALC MANUFACTURING, INC. d/b/a Rocky Ridge Custom Trucks,

Plaintiff, ORDER AND OPINION ON v. DEFENDANT BBP BANDENIA, PLC’S MOTION TO SET ASIDE DEFAULT, J. STREICHER & CO., LLC; and FOR RELIEF FROM JUDGMENT, BBP BANDENIA, PLC, AND TO STAY ENFORCEMENT Defendants.

1. THIS MATTER is before the Court on Defendant BBP Bandenia, PLC’S

(“Bandenia”) Motion to Set Aside Default, for Relief from Judgment, and to Stay

Enforcement (the “Motion”) filed January 17, 2020 in the above-captioned case. (ECF

No. 41.)

2. After withdrawal of certain arguments, Bandenia’s Motion now presents a

single issue for the Court’s consideration: whether the default judgment entered

against Bandenia on June 4, 2019 should be vacated based on Bandenia’s contention

that the agreement supporting the breach of contract claim on which the default

judgment is based is unenforceable for lack of consideration. (Def. Bandenia’s Notice

Withdrawal Certain Args. & Bases Mot. Set Aside Default, Relief from J., & Stay

Enforcement 1 [hereafter “Withdrawal”], ECF No. 58.)

3. Having considered the Motion, the materials submitted in support of and

opposition to the Motion, the arguments of counsel at the May 6, 2020

videoconference hearing on the Motion, and other appropriate matters of record, the

Court hereby DENIES Bandenia’s Motion for the reasons set forth below. James, McElroy & Diehl, P.A., by Adam L. Ross, Jennifer M. Houti, and Christopher T. Hood, for Plaintiff ALC Manufacturing Inc. d/b/a Rocky Ridge Custom Trucks.

Carnes Warwick, PLLC, by Jonathan A. Carnes, for Defendant BBP Bandenia, PLC.

Everett Gaskins Hancock LLP, by James M. Hash, for Defendant J. Streicher & Co., LLC.

Bledsoe, Chief Judge.

I.

PROCEDURAL BACKGROUND

4. Plaintiff filed its Complaint initiating this action on January 22, 2019,

(Compl., ECF No. 3), asserting various claims against Defendant J. Streicher & Co.,

LLC (“Streicher”), (Compl. ¶¶ 66–93), and a single claim for breach of contract against

Bandenia, (Compl. ¶¶ 94–99), a company organized and based in the United

Kingdom, (Compl. ¶ 3). To support its claim against Bandenia, Plaintiff alleged that

Plaintiff, Bandenia, and Streicher entered into a valid and enforceable settlement

agreement (the “Settlement Agreement”), “supported by valid and adequate

consideration,” (Compl. ¶ 95), on July 18, 2017 that requires, among other things,

Bandenia and other parties to pay Plaintiff $850,000, (Compl. ¶¶ 58–59, Ex. 1).

Plaintiff averred that Bandenia paid only $200,000 under the Settlement Agreement

and failed to pay the remaining $650,000 due under the Agreement. (Compl. ¶¶ 61,

64–65.)

5. Plaintiff served a copy of the Summons and Complaint on Bandenia on

January 24, 2019 and again on February 15, 2019. (See Aff. Service Def. Bandenia, ECF No. 24.) Bandenia never filed a notice of appearance, any type of responsive

pleading, or any other document with the Court or the Mecklenburg County, North

Carolina Clerk of Superior Court.

6. On February 5, 2019, Streicher filed a Notice of Designation. (ECF No. 4.)

The action was designated as a mandatory complex business case by Order of the

Chief Justice on February 6, 2019, (ECF No. 1), and assigned to the undersigned on

the same day, (ECF No. 2).

7. On April 11, 2019, Plaintiff filed a verified motion for entry of default and

default judgment. (Verified Mot. Entry Default & Default J. Against Def. BBP

Bandenia, PLC [hereafter “Mot. Entry Default”], ECF No. 26.) Counsel for Plaintiff

served a copy of the motion on Bandenia by placing the filing in the United States

Mail addressed to Bandenia in London, United Kingdom. (Mot. Entry Default 5.)

8. The Court entered default against Bandenia under Rule 55(a) of the North

Carolina Rules of Civil Procedure (“Rule(s)”) on April 30, 2019. (Order Entering

Default, ECF No. 32.)

9. The Court subsequently entered default judgment against Bandenia on

June 4, 2019 in the total amount of $658,951.80 (the “Default Judgment”). (Order

Pl.’s Verified Mot. Default J., ECF No. 33.) Plaintiff served the Default Judgment on

Bandenia in London on June 11, 2019. (Certificate Service, ECF No. 34.) In the

Default Judgment, the Court found that “the 2017 Agreement represented a valid

contract between Plaintiff and Bandenia[,]” “Bandenia materially breached the 2017

Agreement by failing to pay the remaining principal of $650,000 and interest owed pursuant to that agreement[,]” and “Plaintiff’s Complaint thus states a claim for

breach of contract against Bandenia.” (Order Pl.’s Verified Mot. Default J. ¶ 17.)

10. On June 25, 2019, the Court received by mail a notarized “Request for a Stay

of Proceedings” (“Request”) dated June 13, 2019 from Fabio Pastore (“Pastore”) in

London, who represented that he was a Director and the Chief Executive Officer of

Bandenia. In the Request, Pastore, who is not a lawyer admitted to practice law in

North Carolina, contested the adequacy of Plaintiff’s service on Bandenia in the

United Kingdom, attacked the merits of Plaintiff’s claim against Bandenia, and

requested that the Court stay this proceeding for at least six weeks to allow Bandenia

“to receive the necessary documents from the Plaintiff to mount a defense.” (Order

Request Stay Proceedings Ex. A, ECF No. 37.)

11. On June 26, 2019, the Court denied the Request based on Bandenia’s failure

to comply with applicable procedural rules and because Bandenia, as a corporation,

may only appear in the courts of this State through North Carolina-admitted counsel.

(Order Request Stay Proceedings 2–3); see also LexisNexis, Div. of Reed Elsevier, Inc.

v. Travishan Corp., 155 N.C. App. 205, 209, 573 S.E.2d 547, 549 (2002) (holding a

North Carolina “corporation must be represented by a duly admitted and licensed

attorney-at-law and cannot proceed pro se”).

12. On July 8, 2019, Plaintiff dismissed all claims against Streicher with

prejudice. (Voluntary Dismissal Prejudice, ECF No. 38.)

13. On September 9, 2019, Plaintiff began efforts against Bandenia to collect on

the Default Judgment in the United Kingdom, (Aff. Adam L. Ross ¶ 11, ECF No. 46; Aff. Adam L. Ross Ex. D, ECF No. 46.5). In response, Bandenia filed an Insolvency

Act Application Notice (“Application”) on October 2, 2019 with the High Court of

Justice in London in an effort to keep Plaintiff from winding up Bandenia’s affairs

based on its debt to Plaintiff. (Aff. Adam L. Ross ¶ 11; Aff. Adam L. Ross Ex. E, ECF

No. 46.6.)

14. In support of that Application, Pastore submitted a Witness Statement on

the same day stating, “While I accept that default judgment was granted against

BBP, I do not accept that it should have been and, in any event, I believe that that

judgment ought to be set aside.” (Aff. Adam L. Ross Ex. F, at ¶ 6 [hereafter “Pastore

Statement”], ECF No. 46.7.) Pastore claimed that he never received the Summons

issued in this action and that he only became aware of this litigation after the Default

Judgment had been entered against Bandenia. (Pastore Statement ¶ 7.) Pastore

further averred that Bandenia was “now instructing lawyers in North Carolina to

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2020 NCBC 40, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alc-mfg-inc-v-j-streicher-co-ncbizct-2020.