Mohammed Qasem Abunameh v. Kuwait Projects Company, et al.

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

MOHAMMED QASEM ABUNAMEH, Plaintiff, Civil Action No. 25-845 (RK) (TJB) v. KUWAIT PROJECTS COMPANY, et al., MEMORANDUM ORDER Defendants.

KIRSCH, District Judge THIS MATTER comes before the Court upon pro se Plaintiff Mohammed Qasem Abunameh’s (“Plaintiff”) Motion for Default Judgment. (ECF No. 26.) At the outset, the Court notes that, “[b]ecause the entry of a default judgment prevents the resolution of claims on the merits, ‘[the Third Circuit] does not favor entry of defaults and default judgments.’” Loc. 365 Pension Fund v. Kaplan Bros. Blue Flame Corp., No. 20-10536, 2021 WL 1976700, at *2 (D.N.J. May 18, 2021) (quoting United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984)). Upon review of Plaintiff's one-page Motion, the Court finds it woefully deficient as the Motion fails to address in any manner, let alone sufficiently analyze, almost all of the default judgment requirements. A party must satisfy the following requirements to show entitlement to default judgment under Federal Rule of Civil Procedure 55(b)(2): that the Court has (1) personal jurisdiction over the defendants and (2) subject matter jurisdiction over the case; that (3) the defendants were properly served in accordance with applicable federal and state law; that (4) the well-pleaded factual allegations in the complaint plausibly allege each element of each cause of action on which default judgment is sought; that (5) the Third Circuit’s default judgment factors

support the entry of default judgment; and that (6) the amount of damages requested for any legally viable claim is correct (including that damages are for a sum certain if no damages hearing is sought). To support his request for the entry of default judgment, Plaintiff's Motion must present reasoning and supportive evidence addressing each default judgment requirement. The Court directs Plaintiff to the following cases, attached to this Memorandum Order, as illustrative examples of the level and nature of argumentation and support that is appropriate and expected when seeking default judgment: Farmlind Produce, LLC v. Sickles Market, LLC, No. 24- 3746, 2024 WL 3509488, at *4-8 (D.N.J. July 23, 2024); Pension Benefit Guaranty Corp. v. Commercial Investigation & Adjustment Co., No. 23-3097, 2023 WL 8718115, at *4-8 (D.N.J. Dec. 18, 2023); United States v. Mamone, No. 21-20339, 2024 WL 2260934, at *2—5 (D.N.J. May 17, 2024). As is clear from these attached examples, the assessment of default judgment is a thorough one, requiring the movant to provide significant detail in support of his requested relief. Accordingly, the Court considers it prudent for Plaintiff to retain counsel. For these reasons, and for other good cause shown, / fly IT IS on this day of September, 2026, ORDERED that: 1. Plaintiff's Motion, (ECF No. 26), is DENIED without prejudice; 2. The Clerk’s Office is directed to TERMINATE Docket Entry ECF No. 26; 3. Within thirty (30) days of the date of this Memorandum Order, Plaintiff shall advise the Court (1) whether he intends to retain counsel; 4. The Clerk shall serve on Plaintiff by regular U.S. mail: (1). th is □□ Shorandum O}der and (2) the attached case law. /

ROBE kr aascn ay UNITED STATES DisTRICT JUDGE™,

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

commodities or products, are to be held in a non-segregated 2024 WL 3509488 floating trust for the benefit of unpaid sellers.” fd. at 136; Only the Westlaw citation is currently available. see also 7 U.S.C. § 499e(c). A PACA trust “is created by NOT FOR PUBLICATION operation of law upon the purchase of such goods, and the United States District Court, D. New Jersey. produce buyer is the statutory trustee.” Janimura, 222 F.3d at 136. “To protect the assets of the trust, the unpaid supplier FARMLIND PRODUCE, LLC, et al., Plaintiffs, must give the trustee written notice of intent to preserve the v. trust within thirty calendar days after payment was due ... SICKLES MARKET, LLC, et al., Defendants. Altematively, the unpaid seller may provide notice of intent through its ordinary and usual billing or invoice statements.” Civil Action No. 24-3746 (RK) (RLS) Id. (citing 7 U.S.C. § 499e(c)(4)). Signed July 23, 2024 A buyer or trustee violates PACA if it fails to maintain the PACA trust or fails to “make full payment promptly” to the . Attorneys and Law Firms seller or trust beneficiary. 7 U.S.C. § 499b(4). Buyers are David W. Fassett, Arseneault & Fassett, LLP, Chatham, NJ also “required to maintain must assets ina ee that such for Plaintiffs. > > > >" assets are freely available to satisfy outstanding obligations to sellers of perishable agricultural commodities”—any act Daniel M. Stolz, Genova Burns LLC, Basking Ridge, NJ, for omission inconsistent with this responsibility, including Defendant Robert H. Sickles. dissipation of trust assets, is prohibited. 7 C.F.R. § 46.46(d) (1). Dissipation of trust assets is defined as any act or Andrew J. Kelly, Kelly & Brennan, PC, Spring Lake, NJ, for | omission that could result in the diversion of trust assets or Defendants TST Beverages, LLC, AHS Realty, LLC. the impairment of a seller's ability to recover money owed. Id. at § 46.46(b)(2). MEMORANDUM OPINION KIRSCH, District Judge b. Factual Background THIS MATTER comes before the Court upon a Motion This case arises from the financial decline of the Sickles for Default Judgment, (“MDJ,” ECF No. 37), filed by family. Robert Sickles, Jr. (“Mr. Sickles”) owns multiple Plaintiffs Farmlind Produce, LLC and Four Seasons Produce, comp anies: Sickles Market, LLC (Sickles Market"), Inc. (collectively, “Plaintiffy”). The Court has considered Sickles Provisions, LLC (“Sickles Provisions”), and Sickles Plaintiffs’ Motion and its accompanying submissions and Management, Inc. (“Sickles Management”) as well as TST resolves the matter without oral argument pursuant to Federal Beverages, LLC d/b/a Bottles by Sickles ( TST Beverages”) Rule of Civil Procedure 78 and Local Civil Rule 78.1. For the and AHS Realty, LLC ( AHS Realty’ ) (ECE No. 22-1 reasons set forth below, Plaintiffs’ Motion is GRANTED. ( Second Amended Comp laint or SAC ) 7 4c; . □□□ 15.) Plaintiffs are two companies engaged in the business of selling wholesale perishable agricultural commodities 1. BACKGROUND (“Produce”) and are licensed as such under PACA. (SAC 4 3a-b.) Plaintiffs filed this action on March 18, 2024 to enforce a PACA trust against Mr. Sickles as well as Sickles Market, a. Statutory Background Sickles Provisions, and Sickles Management. (See “Compl.,” Congress enacted the Perishable Agricultural Commodities ECF No. 1.) Sickles Market and Sickles Provisions were Act (“PACA”) “to promote fair trading practices in the also engaged in the business of buying and selling produce produce industry.” Tanimura & Antle, Inc. v. Packed and were also licensed as such under PACA, while Sickles Fresh Produce, Inc., 222 F3d 132, 135 Gd Cir. 2000) | Management was engaged in the business of managing (citation omitted). Under PACA, all “perishable agricultural the operations and assets of Sickles Market and Sickles commodities, inventories of food or other derivative products, Provisions. (SAC { 4a—c.) On March 25, 2024, Plaintifis filed and any receivables or proceeds from the sale of such Amended Complaint which added TST Beverages, which

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

was engaged in operating a liquor store, and AHS Realty—the real estate holding company that owned the land upon which Sickles Market was located in Little Silver, New Jersey as . well as an adjacent farm. (““FAC,” ECF No. 6.”) Mr. Sickles ¢- Procedural History was a “principal, member, and/or officer” of Sickles Market, As noted above, Plaintiffs filed this case on March 18, 2024 Sickles Provisions, Sickles Management, TST Beverages, against Mr. Sickles, Sickles Market, Sickles Provisions, and and AHS Realty and occupied a position of control over the Sickles Management. (Compl.) That same day, Plaintiffs filed PACA trust assets allegedly belonging to Plaintiffs. (SAC { an Application for a Temporary Restraining Order Without 4e; see also FAC § 4f.) 1 Notice. (“TRO App.,” ECF No. 1-4.) Init, Plaintiffs explained that Sickles Market had tendered three (3) Non-Sufficient *2 Between October 2023 and March 2024, Plaintiffs © Funds (“NSF”) checks to Four Seasons, that both Sickles “sold and delivered to Sickles Market, in interstate | Market and Sickles Provisions had admitted their PACA trust commerce, $375,960.473 worth of wholesale quantities of | debt due to Plaintiffs and the aggregate principal amount of perishable agricultural commodities (“Produce”) and other __ that debt, and that both Sickles Market and Sickles Provisions goods ....” (SAC 5.) In addition, between November 2023 had abruptly ceased operations and admitted that they lacked and January 2024, Plaintiffs “sold and delivered to Sickles the fimds to pay the debt due. Ud. at 2, 7, 15-16.) On Provisions, in interstate commerce, $23,697.96 worth of | March 20, 2024, the Court granted Plaintiffs’ Application for Produce and other goods ....” Ud. J 6.) a Temporary Restraining Order, which, inter alia, enjoined Defendants from “alienating, dissipating, paying over, or Defendants received and accepted the Produce totaling the assigning any assets of Sickles Market, Sickles Provisions, aggregate amount of $398,945.94. (id. 7.) Thus, Plaintiffs and/or Sickles Management, including without limitation became beneficiaries of a statutory trust under PACA (the ‘their accounts receivable, and those of its subsidiaries or “PACA trust”), “which is designed to assure payment to _— related companies, except for payment to Plaintiffs, until Produce suppliers and which consists of all Produce and further order of this Court or until Defendants pay Plaintiffs Produce-related assets, including all funds commingled with the aggregate sum ....” (the “Temporary Restraints’). (“TRO,” funds from other sources and all assets procured by such § ECF No. 3 at 8.) funds, in the possession or control of Sickles Market and Sickles Provisions.” (id.) Plaintiffs submitted invoices to On March 21, 2024, Plaintiffs’ attorney submitted a Defendants providing notice of intent to preserve PACA trust certification demonstrating that the Summons, Complaint, benefits. Ud. § 8.) In addition to the aggregate principal § and the Court's Temporary Restraining Order, along with the amount owed for the Produce, the invoices also required § materials submitted in support thereof, had been served on Sickles Market and Sickles Provisions to pay interest on | each Defendant by Federal Express Overnight Delivery and unpaid balances at a rate of 1.5% per month, plusallattorney's | by hand delivery. (See ECF No. 5.) On March 25, 2024, as fees, as additional “sums owing in connection with this noted above, Plaintiffs filed an Amended Complaint which transaction under the PACA trust.” (/d. 7 10.) The deadlines | added TST Beverages and AHS Realty, (FAC), and on March to pay for the Produce have long since expired, but Sickles 27, 2024, Plaintiffs moved for a Preliminary Injunction, Market and Sickles Provisions have failed to pay the principal requesting that the Court extend the Temporary Restraints debt that remains due and owing despite repeated demands by and impose same on the additional Defendants, (“PI Mot.,” Plaintiffs. dd. J 11.) ECF No. 7). On April 5, 2024, TST Beverages and AHS Realty entered an appearance in this matter and filed a Briefin Plaintiffs allege that Mr. Sickles and Sickles Management are § Opposition to Plaintiffs’ Motion for a Preliminary Injunction. jointly and severally liable with Sickles Market and Sickles | (ECF Nos. 10-13.) The Court held a hearing on Plaintiffs’ Provisions for their statutory, regulatory, and contractual § Motion on April 9, 2024. (ECF No. 15.) At the hearing, the violations based on the invoices and under PACA. (ld. § parties agreed in principle to a consent order extending the 13-15.) As for AHS Realty, Plaintiffs contend that AHS Temporary Restraints and applying same to TST Beverages Realty “received and retained PACA trust assets from Sickles § and AHS Realty, with certain exceptions. (ECF No. 17.) Market and/or Sickles Provisions in violation of the PACA trust, thereby subjecting its assets to a constructive trust under *3 However, the parties subsequently began to file letters PACA for the benefit of Plaintiffs.” (id. J 16.) on the docket indicating that the parties had been unable to

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

agree upon the language of the consent order and asked that and those of their subsidiaries or related companies, except the hearing on the Motion for a Preliminary Injunction be for payment to Plaintiffs, until further order of this Court rescheduled. (See ECF Nos. 16, 19, 20, 21, 23, 25, 26.) These or until the Sickles Corporate Defendants pay Plaintiffs the letters also raised the possibility that Defendants would be aggregate sum [due to Plaintiffs], and to order the Sickles initiating insolvency proceedings. (/d.) On April 24, 2024, Corporate Defendants to turn over to Plaintiffs certain funds, Plaintiffs voluntarily dismissed TST Beverages due to TST documents, and other materials in their possession, custody, Beverages having filed a voluntary petition for relief under _ or control ....” (ECF No. 36.) Chapter 11 of the Bankruptcy Code in proceedings captioned as In re TST Beverages, LLC, Case No. 24-14130, in the On June 7, 2024, Plaintiffs filed the present Motion for United States Bankruptcy Court for the District of New Default Judgment against the Sickles Corporate Defendants, Jersey. (ECF No. 22-2.) On May 10, 2024, Plaintiffs filed a □ which is now pending before the Court. (MDJ; see also ECF Suggestion of Bankruptcy, which represented that, on May _— Nos. 38, 39.) The Sickles Corporate Defendants have not filed 9, 2024, AHS Realty and Mr. Sickles had also filed for a brief in opposition or otherwise responded to Plaintiffs’ Chapter 11 bankruptcy in the following proceedings: In re Motion, which the Court now turns to. AHS Realty, LLC, Case No. 24-14779, and In re Robert H. Sickles, Case No. 24-14781. (ECF No. 29.) Accordingly, Plaintiffs requested that this action be stayed as to Defendants Il. LEGAL STANDARD AHS Realty and Mr. Sickles. (Id) Federal Rule of Civil Procedure 55 permits a party to apply for and the court to enter default judgment against a party Thus, the only remaining active Defendants in this case are that fails to plead or otherwise defend claims asserted against Sickles Market, Sickles Provisions, and Sickles Management tt Fed. R. Civ. P. 55 (0)(2). “The entry of a default judgment (the “Sickles Corporate Defendants”)—each of which were #8 largely a matter of judicial discretion, although the Third served with process on March 21, 2024, but none of which Circuit has emphasized that such ‘discretion is not without have appeared in this action. (ECF No. 5.) The claims against ‘limits ....’.” Chanel, Inc. v. Gor dashevsky, 558 F. Supp. these Defendants are as follows: Count One- Failure to Pay 24 532, 535 (D.N.J. 2008) (quoting Hritz v. Woma Corp., Trust Funds under PACA, (SAC $f[ 17-19); Count Two — 732 F.2d 1178, 1181 (3d Cir. 1984)). “Because the entry Failure to Pay Promptly under PACA, (id. 20-22); Count of a default judgment prevents the resolution of claims Three — Breach of Contract — Failure to Pay for Goods Sold 0" the merits, ‘[the Third Circuit] does not favor entry of as to Sickles Market and Sickles Provisions, (id. 23-26); defaults and default judgments.’ ” Loc. 365 Pension Fund Count Five — Affiliated Entity as to Sickles Management, (id. Kaplan Bros. Blue Flame Corp., No. 20-105 36, 2021 WL {7 32-34); and Count Seven — Interest and Attorney's Fees, 1976700, at *2 (D.N.J. May 18, 2021) (quoting United States (id. 4] 44-47). v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984)). On May 10, 2024, Plaintiffs filed a Request for Entry of Default as to the Sickles Corporate Defendants. (ECF *4 Before entering a default judgment pursuant to Rule 55(b), urt perf thi h analysis of a plaintiff No. 31)? The Clerk of Court entered the default. On a 66 Pe ome @ or ous ane ysis or Prams □ claims and entitlement to relief. First, the defendant must May 20, 2024, Plaintiffs filed a declaration in further ofits still-pending Motion for Preliminary Injunction have been properly served. See Gold Kist, Inc. v. Laurinburg SUPPO Pename sone ee” Oil Co., 756 F.2d 14, 19 (3d Cir. 1985). Second, the court must (ECF No. 34.) Plaintiffs pointed out that the Sickles . ee ae ge □ . . have subject matter jurisdiction over the dispute and personal Corporate Defendants had not appeared in the action Le . wo. . jurisdiction over the parties. See Mark TV Transp. & Logistics and had not opposed Plaintiffs’ Motion, and thus asked . . oo. . . v. Lightning Logistics, Inc., 705 F. App'x 103, 108 (3d Cir. the Court to treat the Motion as unopposed. (/d.) On . . . 2017). Third, the complaint must sufficiently state a cause May 21, 2024, the Court entered an Unopposed Order . □□ Enterin Preliminary Injuncti inst the Sickl of action. See Chanel, Inc., 558 F. Supp. 2d at 536 (citing a Prelimin ction aga ckles Defendant am he he Directy, Inc. v. Asher, No. 03-1969, 2006 WL 680533, at *1 orate inin stomer orp ONS: SETOINNE ENCE OF GE CUSTOMETS: _(D.N.J. Mar. 14, 2006)). Fourth, the court must weigh the agents, officers, subsidiaries, attorneys, assigns, financial . . oo, □□ three default judgment factors: (1) whether the party subject institutions, and factors from alienating, dissipating, paying oo. . . to the default has a meritorious defense, (2) whether the over or assigning any assets, including without limitation any . oa : . accounts receivable, of the Sickles Corporate Defendants party seeking default would be prejudiced without it, and (3) ° whether the default resulted from the defendant's culpable

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

conduct. Tri-Union Seafoods, LLC v. Ecuatorianita Imp. & — The Court next turns to whether it may exercise subject matter Exp. Corp, No. 20-9537, 2021 WL 1541054, at *7 (D.N.J. _ jurisdiction over this case and personal jurisdiction over the Apr. 20, 2021) (citing Days Inns Worldwide, Inc. v. Jinisha _ parties. The Court has subject matter jurisdiction over this Inc., No. 14-6794, 2015 WL 4508413, at *2 (D.N.J. July 24, case pursuant to 28 U.S.C. §§ 1331, which provides that 2015)). Finally, the plaintiff must have proven damages. See __ the district courts “shall have original jurisdiction of all civil Comdyne [ Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). actions arising under the Constitution, laws, or treaties of the United States.” This action presents a federal question under Section 5(c)(5) of PACA, 7 U.S.C. §§ 499e(b) and 499e(c) HII. DISCUSSION (5). This Court also has supplemental jurisdiction pursuant to 28 U.S.C. § 1367(a) over Plaintiffs’ related breach of contract a. PROPER SERVICE claim against Sickles Market and Sickles Provisions. A court may only enter default judgment against defendants *5 The Court may exercise personal jurisdiction over who were properly served. Teamsters Pension Fund of Phila. all three Sickles Corporate Defendants. Sickles Market & Vicinity v. Am. Helper, Inc., No. 11-624, 2011 WL 4729023, — and Sickles Provisions are New Jersey limited liability at *2 (D.N.J. Oct. 5, 2011) (citing Gold Kist, 756 F.2d at19). companies. (SAC { 4a-b.) “[T]he citizenship of a limited When located in the United States, an entity defendant, such _ liability company ‘is determined by the citizenship of each of as a corporation or LLC, may be served “by delivering a _ its members.’ ” Johnson v. SmithKline Beecham Corp., 724 copy of the summons and of the complaint to an officer,a F.3d 337, 348 (3d Cir. 2013) (quoting Zambelli Fireworks managing or general agent, or any other agent authorized Mfg. Co. v. Wood, 592 F.3d 412, 418 (3d Cir. 2010)). Mr. by appointment or by law to receive service of process.” Sickles is member of Sickles Market and Sickles Provisions. Fed, R. Civ. P. 4(b)(1)(B). The plaintiff “bears the burden of —_ and is a resident of New Jersey, thus empowering this Court proof’ of demonstrating service was proper. Grand Enim’t to exercise personal jurisdiction over his limited liability Grp. v. Star Media Sales, 988 F.2d 476, 488 (3d Cir. 1993) companies. (Id. {| 4e.) Sickles Management is a New Jersey (citation omitted). The plaintiff can meet this burden “by a _ corporation. (Jd. 4] 4c). Thus, the Court also has personal preponderance of the evidence using affidavits, depositions, jurisdiction over Sickles Management based on its place of and oral testimony.” Mills v. Ethicon, 406 F. Supp. 3d 363, _ incorporation. See Daimler AG v. Bauman, 571 U.S. 117, 137 392 (D.N.J. 2019) (citation omitted). (2014). On March 21, 2024, Plaintiffs submitted a certification demonstrating that the Summons and Complaint, along with all of the Temporary Restraining Order materials, had been c. SUFFICIENCY OF COMPLAINT served on each of the Sickles Corporate Defendants by The third factor the Court must consider is “whether the Federal Express Overnight Delivery and by hand delivery. moving party's complaint establishes a legitimate cause of (See ECF No. 5). The certification contained the FedEx action.” La. Counseling & Fam. Servs., Inc. v. Makrygialos, proof-of-delivery and an affidavit of service for each Sickles LC, 543 F. Supp. 24 359, 365 (D.N.J. 2008); see also Animal Corporate Defendant, demonstrating that each Summons —cvience Prods., Inc. v. China Nat'l Metals & Minerals Import and Complaint was served upon Tristan Sickles on March og Export Corp., 596 F. Supp. 2d 842, 848 (D.N.J. 2008) (“A 21, 2024. (Ud. at *10, *12, *14); see Super 8 Worldwide, litigant's failure to state a claim upon which relief may be Inc. v. Kusum, LLC, No. 13-5603, 2015 WL 7761061, granted ... prevents the presiding court from entering a default at *3 (D.N.J. Dec. 1, 2015) (affidavits demonstrating that judgment.”). the summonses were returned executed establishes proper service). Accordingly, Plaintiffs have established by a I» Counts One and Two, Plaintiffs have brought claims for preponderance of the evidence that the Sickles Corporate paiture to make prompt payments for shipments of Produce Defendants were properly served. under PACA. (SAC {ff 17-22.) In Count Five, Plaintiffs allege that Sickles Management is “affiliated with and/or related to” Sickles Market and Sickles Provisions, rendering b. JURISDICTION it liable for Sickles Market and Sickles Provisions’ PACA violations. (7d. §{] 32-34.) As noted above, to protect a trust

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

under PACA, a produce seller must provide the buyer with _for deliveries from Four Seasons); Lind Decl. ISO TRO App. written notice of its intent to preserve trust benefits—this at *21—*194 (demonstrating signed invoices for deliveries requirement can be met through ordinary billing or invoice from Farmlind)); see also Agri Exotic Trading, Inc. v, D statements. See Tanimura, 222 F.3d at 136; 7U.S.C. § 499e(c) = Mart Rutherford LLC, No. 21-17794, 2022 WL 180278, at (4). Thereafter, a buyer's failure to make prompt payments *5 (D.N.J. Jan. 20, 2022) (hereinafter, “D Mart Rutherford’) triggers civil liability under PACA. 7 U.S.C. § 499b(4); see — (finding a valid and enforceable contract where plaintiff also Agri Exotic Trading, Inc. v. Patriot Fine Foods, LLC, No. sold and delivered produce to defendant who accepted and 22-4898, 2022 WL 16570625, at *2 (D.N.J. Nov. 1, 2022) signed the invoices for same). Plaintiffs performed their (hereinafter “Patriot’). 3 Plaintiffs have alleged that they, obligations by delivering the Produce, which was accepted by Sickles Market, and Sickles Provisions are all licensed dealers Sickles Market and Sickles Provisions, and Sickles Market under PACA, (SAC J 3-4; see also “Warhol Decl. ISO and Sickles Provisions breached the contract by failing to pay TRO App.,” ECF No, 1-2 at *10-*14; “Lind Decl. ISOTRO for the amount due and owing. App.,” ECF No. 1-3 at *10-*14), and that Plaintiffs sold and delivered $375,960.473 worth of Produce to Sickles Market Similarly, in Count Seven, which pleads a claim for between October 2023 and March 2024 and $23,697.96 worth contractual interest and attorney's fees and costs, (SAC ff of Produce to Sickles Provisions between November 2023 44-47; see also. “D. Fasset Decl. ISO MDI,” ECF No. and January 2024, (SAC 5-6). Plaintiffs further contend 37-1 {{j 5-18), Plaintiffs allege that under the terms of that upon receiving and accepting the produce, Plaintiffs the invoices, Sickles Market and Sickles Provisions were became the beneficiaries in a statutory trust under PACA and —-Tequired to pay interest on unpaid balances at a rate of that Plaintiffs timely preserved their interest in the PACA 1.5% per month, plus attorneys’ fees expended in connection trust by delivering invoices containing the requisite statutory With the transaction under the PACA trust. (/d. {| 10). This language. (Id. {| 7-8.) Finally, Plaintiffs allege that Sickles “theory of damages is straightforward and uncontroversial.” Management occupied a position of control over the PACA DP Mart Rutherford, 2022 WL 180278, at *5 (finding plaintiffs trust assets, which renders them jointly and severally liable Sct forth legally sufficient breach of contract claim and for all debts due and owing by Sickles Market and Sickles ©XPlaining that damages based on defendant's failure to pay Provisions. (Id. {| 14-15.) The Court finds that Plaintiffs have the principal amount plus interest and attorney's fees was sufficiently pled PACA claims against the Sickles Corporate “Straightforward and uncontroversial”); see also Rocheux Defendants for failure to pay trust funds and to make full Int'l of N.J., Inc. v. U.S. Merchants Fin. Grp., Inc., 741 F. payment promptly. See Patriot, 2022 WL 16570625, at *3 Supp. 2d 651, 684-87 (D.N.J. 2010) (holding that a clause (finding similar PACA allegations sufficient to grantamotion Tequiring buyer to pay attorneys’ fee and interest on past due for default judgment). accounts, which was present in all invoices sent to buyer after delivery of each shipment was an enforceable term *6 The Court also finds that Plaintiffs have set forth a Of the parties’ contracts). Moreover, the Third Circuit has legally sufficient breach of contract claim against Sickles ™ade clear that a PACA beneficiary may recover interest and Market and Sickles Provisions. To establish a breach of fees due contractually or otherwise “in connection” with the contract under New Jersey law, Plaintiff must allege “(1) a transaction that is the subject of a PACA trust claim. Pac, contract between the parties; (2) a breach of that contract; (3) 2##’) Mitg., Inc. v. A & B Produce, Inc., 462 F.3d 279, 286 damages flowing therefrom; and (4) that the party stating the (3d Cir. 2006) (citing Middle Mountain Land & Produce claim performed its own contractual obligations.” Frederico ”¢. v. Sound Commodities Inc., 307 F.3d 1220, 1222-23 v. Home Depot, 507 F.3d 188, 203 (3d Cir. 2007) (internal (9th Cir. 2002) (“The plain meaning of the PACA statute's citation omitted). Under New Jersey law, a contract for the | Words ‘in connection with’ encompasses not only the price sale of goods “may be made in any manner sufficient to of the perishable agricultural commodities but also additional show agreement, including conduct by both parties which related expenses, including contractual rights to attorneys’[ ] recognizes the existence of such a contract.” N.J. Stat. Ann, _ fees and interest, in a PACA claim.”)). § 12A:2-204(1). Here, Plaintiffs allege that Sickles Market and Sickles Provisions received and accepted the Produce and signed invoices for same, forming a contract for the sale of the d. DEFAULT JUDGMENT FACTORS Produce. (See SAC ff 7, 9; see also Warhol Decl. ISO TRO App. at *19-*54, *60-*71 (demonstrating signed invoices

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

Next, the Court considers the three default judgment factors: Pension Fund of Phila. & Vicinity, 2011 WL 4729023, at “(1) whether the party subject to default has a meritorious *4: US. v. Cruz, No. 20-3903, 2021 WL 1884862, at *2 defense, (2) the prejudice suffered by the party seeking (D.N.J. May 11, 2021) (“Defendants[’] failure to answer default, and (3) the culpability of the party subject to default.” sor otherwise respond to the Complaint, without providing Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds,250 any reasonable explanation, permits the Court to draw an FRD. 171, 177 (D.N.J. 2008) (citing Emcasco Ins. Co. v. inference of culpability on its part.”); Prudential Ins. Co. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)). The Court finds of Am. v. Taylor, No. 08-2108, 2009 WL 536403, at *1 that each of the three factors weighs in favor of entering (D.N.J. Feb. 27, 2009) (‘[T]here was nothing before the default judgment in this case. Court to suggest that anything other than [defendant's] willful negligence caused her failure to file an answer, and she First, in the absence of any responsive pleading, the Court's | was therefore culpable.”). Indeed, there appears to be no review of the Complaint reveals no meritorious defense open question that the Sickles Corporate Defendants are aware of to the Sickles Corporate Defendants. See Ramada Worldwide _ this action, especially as the attorney for Mr. Sickles filed a Inc. v. Courtney Hotels USA, LLC, No. 11-896, 2012 WL letter on the docket explaining the financial situation of the 924385, at *5 (D.N.J. Mar. 19, 2012) (“‘assum[ing] that the Sickles family and their businesses and that they had been Defendants have no litigable defenses available” because they cooperating with counsel for the PACA creditors. (See ECF “have not filed anything with the Court,” “have offered no No. 21.) Accordingly, each of the three default judgment defense,” and “the facts asserted in the complaint do not —_ factors counsels in favor of entering default judgment against contain any information that could provide the basis for the Sickles Corporate Defendants. a meritorious defense”); see also Rose Containerline, Inc. v. Omega Shipping Co., No. 10-4345, 2011 WL 1564637, at *3 (D.N.J. Apr. 25, 2011) (same); Carpenters Health & e. DAMAGES Welfare Fund of Phila. v. NDK Gen. Contractors, Inc., No. 06-3283, 2007 WL 1018227, at *1 (E.D. Pa. Mar. 29, 2007) Finding default judgment warranted, the Court turns to (“Defendant has filed no responsive pleading and the record _the issue of damages. As noted above, while the factual before the court does not reveal any ‘litigable defense.’ The allegations of a complaint are taken as true on a motion court must therefore presume that defendant has none.”). In — for default judgment, a plaintiff must prove the amount fact, the Sickles Corporate Defendants have never disputed of damages with certainty. Comdyne, 908 F.2d at 1149. In their PACA trust debts due and owing to Plaintiffs. (See order to determine whether a plaintiff has sufficiently proven Warhol Decl., ISO TRO App. 4/15; Lind Decl. ISO TRO App. damages, Rule 55(b) permits the Court to “conduct such q 15.) hearings or order such references as it deems necessary and proper.” /d. (quoting Fed. R. Civ. P. 55(b)(2)). However, the *7 Second, Plaintiffs have been prejudiced by the Sickles — Court is not required to conduct such hearings “as long as Corporate Defendants’ failure to appear, defend, or otherwise —_ jt ensures that there is a basis for the damages specified respond to the Complaint in this case because Plaintiffs have jn the default judgment,” Trucking Emps. of North Jersey no other means of seeking relief from these Defendants. Welfare Fund, Inc.-Pension Fund v. Caliber Auto Transfer, See Gowan vy. Cont'l Airlines, Inc., No. 10-1858, 2012 WL Inc., No. 08-2782, 2009 WL 3584358, at *3 (D.N.J. Oct. 27, 2838924, at *2 (D.NJ. Jul. 9, 2012) (“[Plaintiffs] will suffer 2009) (citation and quotation marks omitted), such as when prejudice if the Court does not enter default judgment as —“qetajled affidavits and documentary evidence” have been Plaintiff[s] [have] no other means of seeking damages for —_ gybmitted to support the plaintiff's claim for damages. Doe v. the harm caused by Defendant.”); Teamsters Pension Fund of Simone, No. 12-5825, 2013 WL 3772532, at *2—*3 (D.N.J. Phila. & Vicinity v. Am. Helper, Inc., 2011 WL 4729023, at*4 July 17, 2013) (citation omitted); see also Comdyne, 908 F.2d (D.N.J. Oct. 5, 2011) (find that a defendant's failure to answer 1142 at 1149 (citation omitted) (damages sought at default prejudices the plaintiff). judgment should be for a “sum certain or for a sum which can by computation be made certain ....”). Finally, the Court finds the Sickles Corporate Defendants responsible for their failure to appear in this litigation because —_ Here, Plaintiff's request that the Court enter judgment against “there is nothing before the Court to show that [their] failure —_the Sickles Corporate Defendants as follows: to file an answer was not willfully negligent.” Teamsters

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

Farmlind is entitled to a judgment against all three fees and costs. Plaintiffs have attached their account Defendants, jointly and severally, under the PAC ‘A Claims statements for Sickles Market and Sickles Provisions, (Fasset in the aggregate principal amount of Farmlind's unpaid Decl. ISO MDJ, Exs. 1, 2), and over two hundred pages of Produce sales to Sickles Market and Sickles Provisions of | MVo!ces for same, (Warhol Decl. ISO TRO App. at *19- $213,218.94, plus contractual interest accrued through July *54, *60-*71; Lind Decl. ISO TRO App. at *21-*194). 1, 2024, of $21,607.21, plus reasonable attorneys’ fees and They have also submitted certifications from their attorneys costs incurred through May 31, 2024, of $42,261.35, for a explaining the calculation of the contractual interest due on total judgment amount under the PACA Claims in favor of the unpaid principal amounts owed to Plaintiffs. (“M.J. Fasset Farmlind and against Defendants, jointly and severally, of Decl. ISO MDJ,” ECF No. 37-2, Exs. C-D.) Finally, Plaintiffs $277,087.53[;] have submitted certifications from their attorneys containing detailed and itemized exhibits demonstrating attorney's fees *§ Four Seasons is entitled to a judgment against all three © and costs, including the tasks and hours of service performed, Defendants, jointly and severally, under the PACA Claims __ the experience levels and hourly billing rates of the attorneys, in the aggregate principal amount of Four Seasons unpaid and the additional costs incurred, such as the costs of business Produce sales to Sickles Market and Sickles Provisions of records obtained and the costs incurred for Lexis research. $85,492.00, plus contractual interest accrued through July § (D. Fasset Decl. ISO MDJ {| 8-10, Ex. 3; MJ. Fasset 1, 2024, of $9,735.61, plus reasonable attorneys’ fees and Decl. ISO MDJ □□□ 1-7, Exs. A, B.) Based on Plaintiffs’ costs incurred through May 31, 2024, of $18,021.49, for a submissions, the Court finds that Plaintiffs have adequately total judgment amount under the PACA Claims in favor of established damages in this case, including attorney's fees Four Seasons and against Defendants, jointly and severally, and costs, which appear reasonable and proportionate. See D of $113,249. 10[;] Mart Rutherford, 2022 WL 180278, at *5—*6 (finding similar evidence sufficient to demonstrate damages on a motion for Four Seasons is also entitled to a separate judgment against default judgment in a PACA case). 4 Sickles Market under the Breach of Contract Claim in the principal amount of Four Seasons’ unpaid non-Produce ~ sales to Sickles Market of $4,729.86[;] CONCLUSION Four Seasons is entitled to a separate judgment against Sickles Provisions under the Breach of Contract Claim in *9 For the reasons set forth above, Plaintiffs’ Motion the principal amount of Four Seasons’ unpaid non-Produce for Default Judgment, (ECF No. 37), is GRANTED, sales to Sickles Provisions of $712.89. and the Court enters default judgment against the Sickles Corporate Defendants. An appropriate Order and Judgment (MDJ at *6-*7.) accompanies this Memorandum Opinion. The Court finds that Plaintiffs have submitted sufficient evidence to support their request, including the principal All Citations amount due and owing as well as the interest and attorney's Not Reported in Fed. Supp., 2024 WL 3509488

1 On April 24, 2024, Plaintiffs filed a Second Amended Complaint, which added C. Rooney Produce, Co., Inc. (“Rooney”) as a third Plaintiff, (SAC J 3c), and removed TST Beverages, but which contained otherwise identical claims as in the First Amended Complaint. Shortly thereafter, on May 17, 2024, Rooney voluntarily dismissed its claims without prejudice. (ECF Nos. 32, 33.)

Farmlind Produce, LLC v. Sickles Market, LLC, Not Reported in Fed. Supp. (2024)

2 Plaintiffs initially filed a “motion” for default, which was terminated because Plaintiffs had not first filed a “request” for entry of default. (ECF No. 30.) A few days later, Plaintiffs filed the proper “request” for entry of default. (ECF No. 31.) 3 The Court refers to the Agri Exotic Trading, Inc. cases by the name of the defendants as this Opinion cites to multiple PACA cases in which Agri Exotic Trading, Inc. was the plaintiff. 4 Plaintiffs also request that the Court “authorize Plaintiffs’ counsel to release from trust to Plaintiffs, in partial satisfaction of those judgments, the $45,642.42 in funds belonging to Defendants that Plaintiffs’ counsel has received since entry of the preliminary injunction order on May 21, 2024. (MDJ at *6; see also ECF No. 36; D. Fasset Cert. ff 24-25.) On May 21, 2024, in its Unopposed Order Entering a Preliminary Injunction, the Court enjoined the Sickles Corporate Defendants’ assets until further Order and ordered the Sickles Corporate Defendants to turn over all funds belonging to them or their subsidiaries or related companies, excluding TST Beverages and AHS Reaity, to Plaintiffs’ counsel for Plaintiffs’ counsel to hold in trust pending further Order. (ECF No. 36.) Plaintiffs’ counsel explained in a certification submitted to the Court that, since the Court's preliminary injunction order, a total of $45,642.42 in funds have been turned over and are being held in trust by Plaintiffs’ counsel. (D. Fasset Cert. {J 24-25.) The Court hereby grants Plaintiffs’ request that these funds be released to Plaintiffs.

End of Document © 2026 Thomson Reuters. No claim to original U.S. Government Works.

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 2023WL8718115 0 § 1302(a). Congress established PBGC to (1) encourage the 2023 WL 8718115 continuation and maintenance of voluntary private pension Only the Westlaw citation is currently available. plans for the benefit of their participants; (2) provide for United States District Court, D. New Jersey. the timely and uninterrupted payment of pension benefits to participants and beneficiaries under plans covered by Title PENSION BENEFIT GUARANTY IV of ERISA; and (3) maintain premiums at the lowest level CORPORATION, Plaintiff, possible. 29 U.S.C. § 1302(a). COMMERCIAL INVEST ATION & ERISA authorizes PBGC to “make such investigations ADJUSTMENT CO., INC., Defendant. as it deems necessary to enforce any provision of this subchapter or any rule or regulation thereunder...” 29 U.S.C. Civil Action No. 23-3097 (RK) (RLS) § 1303(a). For the purpose of such investigations, PBGC may “subp[olena witnesses, compel their attendance, take Signed December 18, 2023 evidence, and require the production of any books, papers, correspondence, memoranda, or other records which [PBGC] Attorneys and Law Firms deems relevant or material to the inquiry.” 29 U.S.C. § 1303(b). Furthermore, ERISA provides: “In the case of Erika Barnes, Danielle E. Rodriguez, Pension Benefit — contumacy by, or refusal to obey a subpoena issued to, any Guaranty Corporation Office of the General Counsel, person, [PBGC] may invoke the aid of any court of the United Washington, DC, for Plaintiff. States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and MEMORANDUM OPINION testimony of witnesses and the production of books, papers, correspondence, memoranda, and other records. The court KIRSCH, District Judge may issue an order requiring such person to appear before THIS MATTER comes before the Court upon [PBGC], or member or officer designated by [PBGC], and a Motion for Default Judgment filed by Plaintiff to produce records or to give testimony related to the matter Pension Benefit Guaranty Corporation (PBGC”) against under investigation or in question. Any failure to obey such Defendant Commercial Investigation & Adjustment Co., order of the court may be punished by the court as a contempt Inc. (“Commercial Investigation”). (ECF No. 7.) The Court thereof.” 29 U.S.C. § 1303). has considered PBGC's Motion and its accompanying submissions and resolves the matter without oral argument B. Factual Backeround pursuant to Federal Rule of Civil Procedure 78 and Local Commercial Investigation is a New Jersey corporation that Civil Rule 78.1. For the reasons set forth below, PBGC's established a tax-qualified, defined benefit retirement pension Motion is GRANTED. plan (the “Plan’’) under Title [V of ERISA for the exclusive benefit of its employees. (Compl. {J 12-13.) Commercial L BACKGROUND Investigation is the administrator of the Plan within the This action arises. under Title IV of the Employment meaning of 29 U.S.C. §§ 1002(16)(A) and 1301(a)(1). Ud. □ Retirement Income Security Act of 1974 (“BRISA”), 29 14) U.S.C. §§ 1301-1461. In January 2018, PBGC received an email from Commercial Investigation representing that it was experiencing financial A. Statutory Framework hardship and was unable to pay the premiums and PBGC is a wholly owned United States Government contributions owed under the Plan or pay for an actuary. (/d. { corporation established under 29 U.S.C. § 1302(a) within 15.) Accordingly, PBGC initiated an investigation pursuant to the Department of Labor to administer the pension plan 29 U.S.C. § 1303(a) into Commercial Investigation's failure to termination insurance program created by TitleTV of ERISA. make its statutorily required payments. (/d.) Between January (Complaint, ECF No. 1 (“Compl.”) { 1); see also 29 U.S.C. 2018 and August 2022, PBGC attempted to work with Commercial Investigation “to resolve its financial hardship

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 87181150 EE concems and to discuss how Commercial Investigation 6.) Thereafter, on August 28, 2023, PBGC filed the pending will administer the Plan moving forward.” Ud. J 16.) On Motion for Default Judgment. (ECF No. 7.) September 6, 2022, PBGC issued a subpoena to Commercial Investigation pursuant to its authority under 29 U.S.C. § 1303(b), requiring the production of previously requested I. LEGAL STANDARD STANDARD documents and information by September 20, 2022. (Id.§17; Federal Rule of Civil Procedure 55 permits a party to apply Ex. C) for and the court to enter default judgment against a party that fails to plead or otherwise defend claims asserted against *2, The subpoena was served upon Mr. Douglas O'Neill it. Fed. R. Civ. P. 55(b)(2). “The entry of a default judgment at his last known home address. (Id. J 18; Ex. A ¥ is largely a matter of judicial discretion, although the Third 3.) Mr. O'Neill is listed in the New Jersey Division of Circuit has emphasized that such ‘discretion is not without Revenue and Enterprise Services’ database as the president _limmits ....” Chanel, Inc. v, Gor dashevsky, 558 F. Supp. 2d 532, of Commercial Investigation. (Id., Ex. B.). Two days after °35 (D.N.J. 2008) (quoting Hritz v. Woma Corp., 732 F.2d the subpoena was served upon Mr. O'Neill, he contacted 1178, 1181 (3d Cir. 1984)). “Because the entry of a default PBGC via telephone to discuss same. (Id. § 19; Ex. A judgment prevents the resolution of claims on the merits, ‘[the 9.) Thereafter, Mr. O'Neill followed up with an e-mail Third Circuit] does not favor entry of defaults and default summarizing the conversation and explaining “that he would Judgments.’ ” Loc. 365 Pension Fund v. Kaplan Bros. Blue 4 20; Ex. E.) In response, PBGC requested regular updates. May 18, 2021) (quoting United States v. $55,518.05 in U.S. (Id. J 21; Ex. A 10.) On September 27, 2022, PBGC = Currency, 728 F.2d 192, 194 (3d Cir. 1984). contacted Commercial Investigation requesting an update; Mr. O'Neill responded that he was still gathering therequested Before entering a default judgment pursuant to Rule 55 (0), information. (Id. 22.) This was the last time that PBGC 4 Court performs a thorough analysis of a plaintiff's claims heard from Commercial Investigation before filing this and entitlement to relief. First, the defendant must have petition to enforce the subpoena; PBGC attempted to contact been properly served. See Gold Kist, Inc. v. Laurinburg Oil Commercial Investigation on November 10, 2022, November Co., 756 F.2d 14, 19 Gd Cir. 1985). Second, the court must 29, 2022, December 12, 2022, January 4, 2023, and January have subject matter jurisdiction over the dispute and personal 412.) v. Lightning Logistics, Inc., 705 F. App'x 103, 108 (3d Cir. 2017). Third, the complaint must sufficiently state a cause On June 6, 2023, PBGC filed a petition pursuant to of action. See Chanel, Inc., 558 F. Supp. 2d at 536 (citing Section 1303(c) in this Court to enforce the administrative Directy, Inc. v. Asher, No. 03-1969, 2006 WL 680533, at *1 subpoena issued to Commercial Investigation. (Ud. J 4.) (D.N.J. Mar. M4, 2006)). Fourth, the court must weigh the PBGC requested four forms of relief (1) “an order three default judgment factors: (1) whether the party subject directing Commercial Investigation to appear, through a duly to the default has a meritorious defense, (2) whether the authorized representative, before the Court, upon a day fixed Party seeking default would be prejudiced without it, and (3) by said order, and to show cause why the Court should whether the default resulted from the defendant's culpable not issue a subsequent order directing Respondent to fully conduct. Tri-Union Seafoods, LLC v. Ecuatorianita Imp. & comply with the subpoena”; (2) “[uJpon return of the order 2*P- Corp, No. 20-9537, 2021 WL 1541054, at *7 (D.N.J. to show cause, ... a subsequent order directing Commercial APt 20, 2021) (citing Days Inns Worldwide, Inc. v. Jinisha Investigation to produce any and all documents and records _/#¢., No. 14-6794, 2015 WL 4508413, at *2 (D.N.J. July 24, responsive to the subpoena to PBGC”; (3) an award of costs 2015)). Finally, the plaintiff must have proven damages. See incurred by PBGC in maintaining this action; and (4) any Comdyne [, Ine. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). other relief the Court deems appropriate. (Ud. | 24.) On June 13, 2023, PBGC filed an affidavi of service (ECF No. 3.) On IIL. DISCUSSION July 21, 2023, after Commercial Investigation failed to appear in this action, PBGC requested an Entry of Default, which A. Proper Service the Clerk of the Court entered on July 24, 2023. (ECF No. *3 A court may only enter default judgment against defendants who were properly served. Teamsters Pension

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 8718115 Fund of Phila. & Vicinity v. Am. Helper, Inc., No. 11-624, where such person or where such person resides or carries on 2011 WL 4729023, at *2 (D.N.J. Oct. 5, 2011) (citing Gold _ business.” 29 U.S.C. § 1303(c). Moreover, Section 1303(e)(3) Kist, Inc. v, Laurinburg Oil Co., Inc., 756 F.2d 14,19 3d __ provides that “[t]he district courts of the United States shall Cir, 1985)). The plaintiff “bears the burden of proof on that —_ have jurisdiction of actions brought by the corporation under issue.” Grand Entm't Grp. v. Star Media Sales, 988 F.2d this subchapter without regard to the amount in controversy 476, 488 (3d Cir. 1993) (citation omitted). The plaintiff can . in any such action.” 29 U.S.C. § 1303(e)(3). meet this burden “by a preponderance of the evidence using affidavits, depositions, and oral testimony.” Mills v. Ethicon, *4 Inthis case, PBGC alleges that Commercial Investigation 406 F. Supp. 3d 363, 392 (D.N.J. 2019) (citation omitted). is a New Jersey corporation. In support thereof, PBGC submitted a record from the New Jersey Division of Revenue Commercial Investigation is a corporation. (Compl. § 2.) A and_ Enterprise Services, which shows that Commercial corporation located in the United States may be served “by —_ Investigation maintains its principal executive office at 3301 delivering a copy of the summons and of the complaint to Route 66, Building C, 2nd Floor, Neptune, New Jersey, an officer, a managing or general agent, or any other agent 07753. (Compl. | 2; Ex. A ¥ 2; Ex. B.) Accordingly, PBGC authorized by appointment or by law to receive service of has demonstrated that Commercial Investigation resides or process ....” Fed. R. Civ. P. 4(h)(1)(B). carries on business within the jurisdiction of this Court, and thus jurisdiction over this matter is proper under 29 PBGC has established by a preponderance of the evidence U.S.C. § 1303(c). See, e.g., Pension Benefit Guar. Corp. that Commercial Investigation was properly served with v. Panache Destination Mgmt., No. 21-80147, 2021 WL the Summons and: Complaint. PBGC filed an Affidavit 5043118, at *3 (N.D. Cal. Sept. 10, 2021), report and of Service, indicating that Mr. O'Neill is Commercial recommendation adopted, No. 20-80147, 2021 WL 5037944 Investigation's president and was personally served at his (N.D. Cal. Oct. 29, 2021), and report and recommendation home address. (ECF No. 3; Compl., Ex. B; Ex. A, § 3; see also adopted, No. 21-80147, 2021 WL 5050413 (N.D. Cal. Nov. ECF No. 7 7 4.) PBGC also attaches, as an exhibit in support 1, 2021) (“Here, PBGC has submitted a record from the ofits Motion, an email sent by Mr. O'Neill to PBGC's attorney California Secretary of State showing that Panache is an on June 29, 2023, in which Mr. O'Neill acknowledges that he active California business whose address on file with the received the Summons. (ECF No. 7, J 8; Ex. A (“T received Secretary is in San Francisco, which shows that Panache your summons on Tuesday, June 14, 2023.”).) Nothing in resides or carries on business within the jurisdiction of this the record suggests that service was improper, and indeed = Court.”). Commercial Investigation has acknowledged that they know about this lawsuit. The Court therefore concludes that PBGC properly served Commercial Investigation in accordance with C. Sufficiency of Complaint on. Federal Rule of Civil Procedure 4(h) (1B)! The third factor the Court must consider is whether the moving party's complaint establishes a legitimate cause of action.” La. Counseling & Fam. Servs., Inc. v. Makrygialos, B. Jurisdiction LLC, 543 F. Supp. 2d 359, 365 (D.N.J. 2008); see also Animal The Court next turns to whether it may exercise jurisdiction Science Prods., Inc. v. China Nat'l Metals & Minerals Import over the parties. “On a motion for default judgment, the Court © 2xport Corp., 596 F. Supp. 2d 842, 848 (D.N.J. 2008) (“A takes as true all well-pleaded jurisdictional allegations in the _‘litigant's failure to state a claim upon which relief may be Complaint to assess whether Plaintifff ] ha[s] made a prima granted ... prevents the presiding court from entering a default facie showing of personal jurisdiction.” Victory's Dawn, Inc., Judgment.”). In order for a court to enter default judgment, a 2022 WL 3402491, at *3 (citing Allaham v. Naddaf, 635 F. plaintiff must “establish[ ] that the essential elements of the App'x 32, 36-37 (3d Cir. 2015)). The Court has jurisdiction pleaded claims are present and state[ ] factual allegations in over this action pursuant to 29 U.S.C. §§ 1303(c) and (e)(3). support of these elements.” Animal Science Prods., Inc., 596 As noted above, when PBGC initiates an investigation into a F- Supp. 2d at 848. corporation and the corporation or its representative refuses to comply with a subpoena, ERISA authorizes PBGC to “invoke Im this case, the Court must determine whether PBGC the aid of any court of the United States within the jurisdiction has stated a legitimate cause of action to enforce the of which such investigation or proceeding is carried on, or administrative subpoena issued to Commercial Investigation. In the Third Circuit, judicial review of administrative

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 2023 WL 8718115 —694 F.3d 351, 362 (3d Cir. 2012), as amended (Nov. 15, □□ is clear that these straightforward requests are within 2012). the Third Circuit's broad definition of relevance. See, e.g., Pension Benefit Guar. Corp. v. Micfo, LLC, No. 20-114, 2021 WL 6849084, at *2 (D.D.C. Mar. 2, 2021), report and recommendation adopted, No. 20-114, 2021 WL 6849088 1. Lawful Purpose (D.D.C. Mar. 17, 2021) (finding that PBGC's subpoena PBGC satisfies the first requirement of the Third Circuit's test. tequests for information related to defendant's retirement plan 29 U.S.C. § 1303(a) provides that PBGC “may make such and financial condition were relevant to PBGC's investigation investigations as it deems necessary to enforce any provision Of defendant's failure to make required contributions), see of this subchapter or any rule or regulation thereunder, and 4/80 Panache Destination Mgmt., 2021 WL 5043118, at may require or permit any person to file with ita statementin *4 (finding PBGC's subpoena requests relevant to PBGC's writing, under oath or otherwise as [PBGC] shall determine, investigation of defendant's failure to pay premiums given the as to all the facts and circumstances concerning the matter to low standard for relevance in the Ninth Circuit even where be investigated.” 29 U.S.C. § 1303(b) provides that “[fJor the the Court is “not well-positioned to definitively determine” purpose of any such investigation, or any other proceeding relevance). * under this subchapter, the Director, any member of the board of directors of [PBGC], or any officer designated by the Director or chairman, may administer oaths and 3. Possession of Requested Information affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, The third requirement is that PBGC does not already possess papers, correspondence, memoranda, or other records which _ the information requested. While PBGC provides minimal [PBGC] deems relevant or material to the inquiry.” Thus, information pertaining to whether any of the requested it is clear that Congress has granted PBGC the authority to documents are already in its possession, nothing in the conduct investigations and issue subpoenas for that purpose. submissions provided to the Court suggest same. As for PBGC's request for the AFTAP or most recent Actuarial Valuation Report, the subpoena itself states that “[t]he most 2. Relevance recent in PBGC'’s possession is the 2016 Actuarial Valuation Report.” (Compl. *24, Ex. C.) In addition, the subpoena *5 The second requirement is that PBGC's inquiry is affirmatively authorizes that Commercial Investigation need relevant to its lawful purpose. The Third Circuithas explained —_ not produce any documents that have already been produced that the relevance requirement is “broad” and “not particularly to PBGC, (id. *23, Ex. C.) Given the Third Circuit's

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 2023. WL 87181150 instruction that judicial review of administrative subpoenas should be strictly limited and summary in nature, the Court 5. Breadth concludes that this third requirement has been met. 3 The fifth and final requirement is that the subpoena issued to Commercial Investigation not be unreasonably broad or burd . As the Court noted above, PBGC' t 4. Compliance with Administrative Requirements ms □□□ sue . ° nore ON’ ° □□□□ □ for information pertaining to the Plan and to Commercial Next, the Court considers whether PBGC has complied with Investigation's financial condition are relevant to Commercial the relevant administrative requirements. ERISA expressly Investigation's inability to make required payments. PBGC authorizes PBGC to “make such investigations as it deems °Mly requests the financial records for the last three years, necessary” and “require the production of any books, (Compl. *24, Ex. C), and it does not appear as though papers, correspondence, memoranda, or other records which the subpoena is unreasonably burdensome. In failing to [PBGC] deems relevant or material to the inquiry.” 29 respond to PBGC's petition in this action, Commercial U.S.C. § 1303(a), (b). The text of ERISA does not impose Investigation has not argued otherwise. The Court also any procedural requirements on the manner in which DOtes that when Mr. O'Neill acknowledged receipt of the PBGC conducts investigations or issues subpoenas. Indeed, SUbpoena, he informed PBGC that Commercial Investigation according to PBGC, “[nJeither ERISA nor PBGC regulations had retained a new actuary and was working with the require a specific means of service for administrative @Ctuary to gather the required documents and information. subpoenas issued by PBGC.” (Compl. 11.) (Compl. *32, Ex. E.) Mr. O'Neill did not raise any concerns regarding the company's ability to collect the requested *6 However, the Court notes that, in pursuing this matter, materials. The Court thus finds that PBGC's subpoena was PBGC “has proceeded in accordance with due process of neither overly broad nor unreasonably burdensome. See, □□□□□ law and the orderly administration of justice.” Panache Micfo, LLC, 2021 WL 6849084 at *2 (finding that PBGC's Destination Mgmt., 2021 WL 5043118, at *3. PBGC served subpoena seeking information relating to the defendant's the administrative subpoena on Mr. O'Neill at his home plan and financial condition was “neither too indefinite nor address. (Compl. | 18; Ex. D.) The subpoena provided burdensome,” especially in light of the defendant's failure to fourteen (14) days to respond, (id. *18, Ex. C), which would — 7gue otherwise). □ have been sufficient time to respond if the subpoena had been issued by a federal court in a lawsuit, see Fed. R. Accordingly, the Court concludes that PBGC has established Civ. Proc. 45(d)(2)(B). Mr. O'Neill acknowledged receipt of 4 legitimate cause of action to enforce its administrative the subpoena but nonetheless failed to respond after PBGC Subpoena against Commercial Investigation in this Court. contacted Commercial Investigation no less than six (6) times th f fi th: i dat ° vneial In a ©) men . te «bes ae D. Default Judgment Factors OMENSTCIAY Unvesigauons Tesponse ° © St pene Next the Court considers the three default judgment factors: (Compl. {| 20, 22-23; Ex. E.) ERISA provides that “[i[n the . □□ (1) whether the party subject to default has a meritorious case of contumacy by, or refusal to obey a subpoena,” PBGC . | . . . . . . : defense, (2) the prejudice suffered by the party seeking may invoke the aid of this Court in requiring compliance with □ . > default, and (3) the culpability of the party subject to default. the subpoena. 29 U.S.C. § 1303(b). The Court thus finds that . an licable procedural . ts have been followed Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 equirements have bee any appmead’e procedure’ Tequirements Nav ono ERD. 171, 177 (D.N.J. 2008) (citing Emcasco Ins. Co. v. in this case. See, e.g., Panache Destination Mgmt., 2021 WL . . . . Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)). The Court finds 5043118, at *3 (finding that ERISA imposes no procedural . . . . . . that each of the three factors weighs in favor of entering requirements and that PBGC proceeded in accordance with . Loy: . , default judgment in this case. due process of law and the orderly administration of justice i the defendant's designat by prop erly Serving @ subpoena on the defendant's esien ed First, the Court's review of the law and the facts alleged agent, providing fourteen (14) days to respond, and filing suit . . os in th -atisdicti in the Complaint reveals no meritorious defense open to in the proper jurisdiction). Commercial Investigation. Of course, “evaluation of the first factor is made difficult by defendants’ failure to answer or to oppose the motion for default judgment.” Loc. 365 Pension

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 2023WL 8718115 Fund, 2021 WL 1976700, at *3. As explained above, the | ensures that there is a basis for the damages specified role in reviewing administrative subpoenas is strictly in the default judgment,” Trucking Emps. of North Jersey limited. As long as PBGC can show that the investigation is Welfare Fund, Inc.-Pension Fund v, Caliber Auto Transfer, conducted pursuant to a lawful purpose, the inquiry isrelevant Inc., No. 08-2782, 2009 WL 3584358, at *3 (D.N.J. Oct. and not unreasonably broad or burdensome, the information 27, 2009) (citation and quotation marks omitted), such as requested is not already within PBGC's possession, and any when “detailed affidavits and documentary evidence” have requisite administrative procedures have been followed, a been submitted to support the plaintiff's claim for damages, district court should enforce the subpoena. See Univ. of Med. Doe v. Simone, No. 12-5825, 2013 WL 3772532, at *2-3 & Dentistry of New Jersey, 347 F.3d at 64. Where, as here, (D.N.J. July 17, 2013) (citation omitted). Furthermore, when the administrative subpoena does not constitute an abuse of _a plaintiff seeks statutory damages, costs, and attorney's fees, the court's process, there is no meritorious defense available | a court may award damages without a hearing. See Joe Hand to Commercial Investigation. Promotions, Inc. v. Waldron, No. 11-849, 2013 WL 1007398, at *3 (D.N.J. Mar. 13, 2013). *7 The second and third factors also weigh in favor of granting default judgment. Commercial Investigation was In its Motion for Default Judgment, PBGC requests (1) served with the administrative subpoena and properly served an order directing Commercial Investigation to produce to with the Summons and Complaint in accordance with |= PBGC any and ali documents and records in response to Federal Rule of Civil Procedure 4(h)(1)(B). Mr. O'Neill the subpoena and (2) an award of costs in maintaining this acknowledged, in writing, receipt of the subpoena, Summons, action of in the amount of $1,088. (ECF No. 7 at 3-4.) and Complaint but nonetheless failed to engage in this | PBGC is statutorily entitled to both forms of relief. First, litigation in any way. (Compl. {fj 20, 22-23; Ex. E; ECF the text of ERISA provides that the Court may issue an No. 7 § 8; Ex. A.) “It is clear that the plaintiffs have | order requiring any person or corporation who refuses to been prejudiced by this dereliction because they have obey a subpoena issued by PBGC to provide records in been ‘prevented from prosecuting their case, engaging in compliance with same. 29 U.S.C. § 1303(c). Subsection (c) discovery, and seeking relief in the normal fashion.” ” Loc. even authorizes district courts to punish the failure to obey 365 Pension Fund, 2021 WL 1976700, at *5 (quoting □□ aPBGC subpoena as contempt of court. Jd. Second, ERISA Teamsters Pension Fund of Phila. & Vicinity, 2011 WL provides that PBGC is entitled the costs of litigation incurred 4729023, at *4). Furthermore, “there is nothing before the | by PBGC in connection with any action brought under Title Court to show that the Defendant[s’] failure to filean answer _—‘IV. 29 U.S.C. § 1303(e)(5); see also Micfo, LLC, 2021 WL was not willfully negligent.” Zeamsters Pension Fund of 6849084 at *2 (finding that PBGC was entitled to costs under Phila, & Vicinity, 2011 WL 4729023, at *4 (citing Prudential 290U.S.C. § 1303(e)(5) as the prevailing party on a petition to Ins. Co. of America v. Taylor, No. 08-2108, 2009 WL _ enforce an administrative subpoena). 536403, at *1 (D.N.J. Feb. 27, 2009)). In short, Commercial Investigation's unexplained failure to engage in this litigation PBGC attorney, Danielle E. Rodriguez, provided a notwithstanding its obvious awareness of same evidences its declaration establishing PBGC's costs in maintaining this culpable conduct and the prejudice to PBGC if PBGC is not □□□ action. (ECF No 7-3.) PBGC seeks $1,088, which is based permitted to obtain relief through the Court entering default on sixteen (16) hours of Ms. Rodriguez's time billed at $57 judgment. per hour and two (2) hours of Assistant General Counsel Erika E. Barnes's time billed at $88 per hour. The Court finds PBGC's requested fees reasonable and that PBGC has E. Remedies adequately supported its claims for the time spent litigating While the Court accepts the Complaint's allegations as true, this matter. Therefore, the Court grants PBGC's request for PBGC must nonetheless prove the amount of damages in attorey's fees in the amount of $1,088 against Commercial order for the Court to enter default judgment in its favor. Investigation. See Comdyne I, Inc., 908 F.2d at 1149. In order to determine whether a plaintiff has sufficiently proven damages, Rule 55(b) permits the Court to “conduct such hearings or order IV. CONCLUSION such references as it deems necessary and proper.” Id. *8 For the reasons set forth above, PBGC's Motion for (quoting Fed. R. Civ. P. 55(b)(2)). However, the Court Default Judgment, (ECF No. 7), is GRANTED. Default is not required to conduct such hearings “as long as it judgment is entered against Commercial Investigation.

Pension Benefit Guaranty Corporation v. Commercial Investigation & Adjustment Co., Inc., Not Reported in Fed. Supp. (2023) 2023WL 8718115 —(i‘“i‘“‘“‘“(s‘( ‘(eT SS Commercial Investigation is ORDERED to produce any and all documents and records responsive to the subpoena to All Citations PBGC within thirty (30) days of entry of this Opinion, and PBGC is awarded costs incurred in maintaining this action Not Reported in Fed. Supp., 2023 WL 8718115 the amount of $1,088. An appropriate Order and Judgment accompanies this Opinion.

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1 See Victory’s Dawn, Inc. v. demons, No. 21-9744, 2022 WL 3402491, at *3 (D.N.J. Aug. 12, 2022) (granting default judgment and finding proper service on LLC defendant because an individual was authorized to and did accept service on the LLC's behalf); Loc. 365 Pension Fund v. Kaplan Bros. Blue Flame Corp., No. 20-10536, 2021 WL 1976700, at *3 (D.N.J. May 18, 2021) (granting default judgment and finding proper service on corporation because the complaint was served on the corporation's officer). 2 The Court is not aware of any cases in the Third Circuit that have considered petitions to enforce administrative subpoenas filed by PBGC and thus turns to cases outside of this Circuit for guidance. 3 Going forward, it would be helpful for PBGC to provide a clear, affirmative declaration certifying to the Court that it does not possess any of the documents requested pursuant to the administrative subpoena.

End of Document © 2026 Thomson Reuters. No claim to original U.S. Government Works.

United States v. Mamone, Not Reported in Fed. Supp. (2024) 2024 WL 2260934, 133 A.F.TR2d 2024-1570 ———————OEOT—— jointly owe the federal government more than $968,140.78 in 2024 WL 2260934 unpaid taxes, interest, and statutory additions. (See Hornby NOT FOR PUBLICATION Decl.) ! United States District Court, D. New Jersey. After the United States filed this action to reduce Defendants’ UNITED STATES of America, Plaintiff, tax obligations to judgment, Mr. Mamone was served with V. process. (ECF No. 3.) 2 However, Mr. Mamone has not filed Raymond F. MAMONE, Jr. and an answer and has not otherwise appeared in this action. Colleen Mamone, Defendants. On June 16, 2022, the United States requested an entry of default as to Mr. Mamone pursuant to Federal Rule of Civil Civil Action No. 21-20339 (RK) (IBD) Procedure 55(a), which was entered by the Clerk of Court on June 21, 2022. (ECF No. 6.) Thereafter, the United States filed Signed May 17, 2024 a Motion for Default Judgment. (ECF No. 9.) Attorneys and Law Firms . *2 However, on June 22, 2023, the United States filed Anna Miller, Ann Elizabeth Nash, U.S. Department of Justice, 4 Suggestion of Bankruptcy notifying the Court that Mr. Tax Division, Washington, DC, for Plaintiff. Mamone had filed a Chapter 13 petition in the United States Bankruptcy Court for the District of New Jersey. (ECF No. 12.) Mr. Mamone's bankruptcy filing triggered an MEMORANDUM OPINION automatic stay of this case as to Mr. Mamone, and the Court administratively terminated the Motion for Default Judgment KIRSCH, District Judge pending resolution of the bankruptcy matter. (ECF No. 13.) On April 3, 2024, the United States notified the Court that “1 THIS MATTER comes before the Court upon 4 the Bankruptcy Court had dismissed Mr. Mamone's case, Motion for Default Judgment filed by Plaintiff United States terminating the automatic stay. (ECF No. 15.) The United of America (“Plaintiff’ or “the United States”) against States therefore requested that the Court lift the stay and Defendant Raymond F. Mamone, Jr. (“Mr. Mamone”). (ECF —_ consider the Motion for Default Judgment. (Id. at 1-2.) The No. 9.) The Court has considered Plaintiff's Motion and Court granted Plaintiff's request and reactivated the Motion accompanying submissions and resolves the matter without — for Default Judgment, which is now ripe for decision. (ECF oral argument pursuant to Federal Rule of Civil Procedure 78 = Yo, 16.) and Local Civil Rule 78.1. For the reasons set forth below, Plaintiff's Motion is GRANTED. I. LEGAL STANDARD Federal Rule of Civil Procedure 55 permits a party to apply I. BACKGROUND for and the court to enter default judgment against a party On December 3, 2021, the United States filed this action _ that fails to plead or otherwise defend claims asserted against against Mr. Mamone and his wife, Colleen Mamone (“Mrs. it. Fed. R. Civ. P. 55(b)(2). “The entry of a default judgment Mamone”) (collectively, “Defendants”), seeking toreduce to — jg largely a matter of judicial discretion, although the Third judgment their joint federal income tax liability for the 2010 Circuit has emphasized that such ‘discretion is not without tax year. (Complaint, ECF No. 1 (“Compl.”).) According to jimits ....” Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, Plaintiff, a delegate of the Secretary of the Treasury assessed 535 (D.N.J. 2008) (quoting Hritz v. Woma Corp., 732 F.2d the federal income taxes jointly owed by Defendants for the 1178, 1181 (3d Cir. 1984)). “Because the entry of a default tax period ending on December 31, 2010, notified Defendants judgment prevents the resolution of claims on the merits, ‘[the of their tax assessment, and demanded payment of same. (Id. Third Circuit] does not favor entry of defaults and default {1 6-7; see also Ex. 2 to Decl. of Revenue Officer Michelle judgments.’ ” Loc. 365 Pension Fund v. Kaplan Bros. Blue Hornby (“Homby Decl.”), ECF No. 8-2 (“Mot. for Service FJgme Corp., No. 20-10536, 2021 WL 1976700, at *2 (D.N.J. by Publication”).) However, despite notice and demand for May 18, 2021) (quoting United States v. $55,518.05 in US. payment, Defendants have failed to pay the amount due and Currency, 728 F.2d 192, 194 (3d Cir. 1984). owing. (Compl. { 8.) As of December 26, 2022, Defendants

United States v. Mamone, Not Reported in Fed. Supp. (2024) 2024 WL 2260934, 183AF.T.R.2d2024-1570 □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ i (‘it ————OTT Before entering a default judgment pursuant to Rule 55(b), 1249 Pembroke Road, Freemansburg, Pennsylvania 18017. a court performs a thorough analysis of a plaintiff's claims (ECF No. 3 “SSUMMONS Returned Executed”).) This is and entitlement to relief. First, the defendant must have sufficient to establish by a preponderance of the evidence that been properly served. See Gold Kist, Inc. v. Laurinburg Oil | Mr. Mamone was properly served in compliance with Rule Co., 756 F.2d 14, 19 (3d Cir. 1985). Second, the court must 4. See Super 8 Worldwide, Inc. v. Kusum, LLC, No. 13-5603, have subject matter jurisdiction over the dispute and personal 2015 WL 7761061, at *3 (D.N.J. Dec. 1, 2015) (affidavits jurisdiction over the parties. See Mark TV Transp. & Logistics | demonstrating that the summonses were returned executed Lightning Logistics, Inc., 705 F. App'x 103, 108 (d Cir. __ established proper service on individual defendants). 2017). Third, the complaint must sufficiently state a cause of action. See Chanel, Inc., 558 F. Supp. 2d at 536 (citing Directy, Inc. v. Asher, No. 03-1969, 2006 WL 680533, at *1 B. JURISDICTION (D.N.J. Mar. 14, 2006)). Fourth, the court must weigh the The Court next turns to whether it may exercise subject matter three default judgment factors: (1) whether the party subject jurisdiction over this case and personal jurisdiction over the to the default has a meritorious defense, (2) whether the parties. The Court has subject matter jurisdiction over this party seeking default would be prejudiced without it, and (3) case pursuant to 28 U.S.C. §§ 1345 and 1340, which provide whether the default resulted from the defendant's culpable _ that the district courts shall have original jurisdiction “of all conduct. Tri-Union Seafoods, LLC v. Ecuatorianita Imp. & civil actions, suits or proceedings commenced by the United Exp. Corp, No. 20-9537, 2021 WL 1541054, at *7 (DJ. States,” 28 U.S.C. § 1345, and “of any civil action arising Apr. 20, 2021) (citing Days Inns Worldwide, Inc. v. Jinisha “nder any Act of Congress providing for internal revenue,” Inc., No. 14-6794, 2015 WL 4508413, at *2 (D.N.J. July 24, 28 U.S.C. § 1340. This action arises under Section 7402 of 2015)). Finally, the plaintiff must have proven damages. See the Internal Revenue Code, which empowers district courts Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir, 1990), 10, inter alia, “render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws.” 26 U.S.C. § 7402(a). IH. DISCUSSION The Court may exercise personal jurisdiction over Mr. A. PROPER SERVICE Mamone because he is domiciled in New Jersey. See A court may only enter default judgment against defendants Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. who were properly served. Teamsters Pension Fund of 915, 924, 131 S.Ct. 2846, 180 L.Ed.2d 796, (2011) (“For an Phila, & Vicinity v. Am. Helper, Inc., No. 11-624, 2011 individual, the paradigm forum for the exercise of general WL 4729023, at *2 (D.N.J. Oct. 5, 2011) (citing Gold Kist, jurisdiction is the individual's domicile ....”); United States v. 1985)). The plaintiff “bears the burden of proof on that 29, 2017) (finding personal jurisdiction over defendants in an issue.” Grand Entm't Grp. v. Star Media Sales, 988 F.2d action to reduce tax liability to judgment because defendants 476, 488 (3d Cir. 1993) (citation omitted). The plaintiff can . . : . were residents of New Jersey). meet this burden “by a preponderance of the evidence using affidavits, depositions, and oral testimony.” Mills v. Ethicon, 406 F. Supp. 3d 363, 392 (D.N.J. 2019) (citation omitted). C. SUFFICIENCY OF COMPLAINT An individual located in the United States may be served by *4 The third factor the Court must consider is “whether the “(A) delivering a copy of the summons and of the complaint moving party's complaint establishes a legitimate cause of to the individual personally; (B) leaving a copy of each action.” La. Counseling & Fam. Servs., Inc. v. Makrygialos, at the individual's dwelling or usual place of abode with LLC, 543 F. Supp. 2d 359, 365 (D.N.J. 2008); see also Animal someone of suitable age and discretion who resides there; science Prods., Inc. v. China Nat'l Metals & Minerals Import or (C) delivering a copy of each to an agent authorized by —& Export Corp., 596 F. Supp. 2d 842, 848 (D.N.J. 2008) (“A appointment or by law to receive service of process.” Fed. R. litigant's failure to state a claim upon which relief may be Civ. P. 4(e)(2). granted ... prevents the presiding court from entering a default judgment.”). *3 The United States filed an affidavit of service signed by process server, Gordon R. Crowell, Jr., demonstrating that = The Court finds that the United States has established a Mr. Mamone was personally served on January 28, 2022 at legitimate cause of action against Mr. Mamone. The Third

United States v. Mamone, Not Reported in Fed. Supp. (2024) 2024 WL 2260934, 133 A-F.T.R.2d 2024-1570 ——————————E—EOE__e_ Circuit has held that income tax “[a]ssessments are presumed *5 Second, the United States would suffer prejudice if to be valid, and establish a prima facie case of liability default judgment was denied. This case has been pending against a taxpayer.” United States v. Green, 201 F.3d 251, since 2021. While it was stayed for approximately nine 253 (3d Cir. 2000); see also Freck v. LR.S., 37 F.3d 986, months while Mr. Mamone's bankruptcy proceeding was 992 n.8 (3d Cir. 1994) (collecting cases). Here, the United pending, Mr. Mamone was served over two years ago and States has demonstrated that federal income tax assessments yet has failed to appear or defend himself in any manner. were made against Mr. Mamone for the 2010 tax year See EA. Sween Co. v. Deli Exp. of Tenafly, LLC, 19 F. Supp. by submitting the Internal Revenue Service (IRS) Account 3d 560, 575 (D.N.J. 2014) (finding prejudice to plaintiff Transcript which is automatically computed by the IRS's where defendant had been served seven months prior and Integrated Data Retrieval System (IDRS) and reflects the tax had failed to appear). Moreover, absent default judgment, assessment at issue, (See Hornby Decl. § 6, Ex. 1.) Absent the United States would have no other means of obtaining any argument from Mr. Mamone to the contrary, the Court relief. Moore, 2017 WL 3718529, at *5; see also United presumes the tax assessments are valid, and thus the United — States v. Cruz, No. 20-3903, 2021 WL 1884862, at *2 (D.N.J. States has established a legitimate claim against Mr. Mamone May 11, 2021) (“Because Defendants failed to answer the to collect the tax liability due and owing. See Moore,2017 WL — Complaint, the Government cannot vindicate its claim against 3718529, at *2 (finding the United States had stated claims | Defendants....”); Gowan v. Cont'l Airlines, Inc., No. 10-1858, against defendants because tax assessments establish a prima § 2012 WL 2838924, at *2 (D.N.J. Jul. 9, 2012) (“[Plaintiffs] facie case of tax liability). 4 will suffer prejudice if the Court does not enter default □ judgment as Plaintiff[s] [have] no other means of seeking damages for the harm caused by Defendant.”). DEFAULT JUDGMENT FACTORS Next, the Court considers the three default judgment factors: Finally, the Court finds Mr. Mamone responsible for his “(1) whether the party subject to default has a meritorious _failure to appear in this litigation because “there is nothing defense, (2) the prejudice suffered by the party seeking before the Court to show that [Mr. Mamone's] failure to file default, and (3) the culpability of the party subject to default.” an answer was not willfully negligent.” Teamsters Pension Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds,250 Fund of Philadelphia & Vicinity, 2011 WL 4729023, at FR.D. 171, 177 (D.N.J. 2008) (citing Emcasco Ins. Co. v. *4; Cruz, 2021 WL 1884862, at *2 (“Defendants[’] failure Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)). The Court finds to answer or otherwise respond to the Complaint, without that each of the three factors weighs in favor of entering providing any reasonable explanation, permits the Court to default judgment in this case. draw an inference of culpability on its part.”); Prudential Ins. Co. of Am. v. Taylor, No. 08-2108, 2009 WL 536403, First, in the absence of any responsive pleading, the Court's at *1 (D.NJ. Feb. 27, 2009) (“{T]here was nothing before review of the Complaint reveals no meritorious defense open the Court to suggest that anything other than [defendant's] to Mr. Mamone. See Ramada Worldwide Inc. v. Courtney willful negligence caused her failure to file an answer, and Hotels USA, LLC, No. 11-896, 2012 WL 924385, at *5 she was therefore culpable.”). Accordingly, each of the three (D.N.J. Mar. 19, 2012) (“assum[ing] that the Defendants have default judgment factors militates in favor of entering default no litigable defenses available” because they “have not filed judgment against Mr. Mamone. anything with the Court,” “have offered no defense,” and “the facts asserted in the complaint do not contain any information that could provide the basis for a meritorious defense”); see E. DAMAGES also Rose Containerline, Inc. v. Omega Shipping Co., No. Finding default judgment warranted, the Court turns to 10-4345, 2011 WL 1564637, at *3 (D.N.J. Apr. 25, 2011) the issue of damages. As noted above, while the factual (same); Carpenters Health & Welfare Fund of Philadelphia allegations of a complaint are taken as true on a motion v. NDK Gen. Contractors, Inc., No. 06-3283, 2007 WL for default judgment, a plaintiff must prove the amount 1018227, at *1 (E.D. Pa, Mar. 29, 2007) (“Defendanthas filed Of damages with certainty. Comdyne, 908 F.2d at 1149. In no responsive pleading and the record before the court does order to determine whether a plaintiff has sufficiently proven not reveal any ‘litigable defense.’ The court must therefore damages, Rule 55(b) permits the Court to “conduct such presume that defendant has none.”). hearings or order such references as it deems necessary and proper.” Id. (quoting Fed. R. Civ. P. 55(b)(2)). However, the Court is not required to conduct such hearings “as long as

United States v. Mamone, Not Reported in Fed. Supp. (2024) 2024 WL 2260934, 133 A-E-T.R-2d 2024-1570 □□□□□□□□□□□□□□□□□□□□□□□□□ □□□ it ensures that there is a basis for the damages specified 1142 at 1149 (citation omitted) (damages sought at default in the default judgment,” Trucking Emps. of North Jersey judgment should be fora sum. certain or for a sum which can Welfare Fund, Inc.-Pension Fund vy. Caliber Auto Transfer, by computation be made certain ....”). Ine., No. 08-2782, 2009 WL 3584358, at *3 (D.N.J. Oct. 27, . 2009) (citation and quotation marks omitted), such as when In the instant action, Plaintiff has Proven the amount of “detailed affidavits and documentary evidence” have been its damages with certainty. Plaintiff provided the following submitted to support the plaintiff's claim for damages, Doe assessment chart summarizing Mr. Mamone's tax liability as y. Simone, No. 12-5825, 2013 WL 3772532, at *2-3 (DNJ, of December 26, 2022: July 17, 2013) (citation omitted); see also Comdyne, 908 F.2d □ Tax Year = Date of First Assessment = Amount of First — Balance Due | _ Assessment

EEE SEES oxplaining the amount or statutory authorization for same). (Hornby Decl. { 6.) The United States also provided the | Based on the foregoing, the Court finds that the amount detailed Account Transcript which reflects itemized interests, requested by the United States is a “sum certain or for a sum penalties, and costs for Mr. Mamone's tax deficiency. (ECF | which can by computation be made certain.” Comdyne, 908 No. 8-3, Ex. 1)° The United States explained that it is F.2d at 1149. owed statutory interest, which is set at a quarterly rate and is compounded daily in accordance with 26 U.S.C. §§ 6621 CONCLUSION and 6622 and is calculated automatically by IDRS. 6 (Hornby . Decl. | 10; ECF No. 9 at 4.) Courts in this district have *6 For the reasons set forth above, Plaintiffs Motion for found this kind of information to be sufficient to establish Default Judgm ent, (ECF No. 9), isG TED, and the Court damages in tax liability cases. Compare Grossman, 2016 WL enters default judgment against Raymond E Mamone, Jr. 3751949, at *2 (damages are certain where United States Judgment is ENTERED in favor of the United States and . oe . . against Mr. Mamone in the amount of $968,140.78 as of provided itemized amounts for unpaid federal income taxes, : statutory costs and penalties pursuant to 26 U.S.C. §§ 6321 December 26, 2022, together with all interest and penalties and 6651, and statutory interest pursuant to 26 U.S.C. §§ that will continue to accrue pursuant to statute after that date, 6621 and 6622), and United States v. Master Fire Prot, With respect to Mr. Mamone's unpaid federal income tax No. 16-8755, 2018 WL 456026, at *3 (D.NJ. Jan. 17, abilities for the federal tax year 2010. 2018) (finding information contained in Account Transcripts and IRS revenue officer declaration sufficient to establish All Citations damages with certainty), with Moore, 2017 WL 3718529, at *6 (damages are not certain where United States sought an Not Reported in Fed. Supp., 2024 WL 2260934, 133 unspecified amount in interest, penalties, and costs without A.E.T.R.2d 2024-1570

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1 As of December 20, 2021, Defendants owed $925,328.90 for unpaid federal income taxes, statutory additions, and interest, which has increased to $968,140.78 as of December 26, 2022. (Compare Compl. J 10, with Hornby Decl. | 6.) 2 Plaintiff's Motion for Default Judgment pertains only to Mr. Mamone as Plaintiff has not served Mrs. Mamone with process. Plaintiffs process server first attempted to serve Defendants at their last known residence but was unsuccessful. (Mot. for Service by Publication at 2, 4.) An individual answered the door who told the process server that Mrs. Mamone no longer resided there. (/d. at 4.) Thereafter, another process server

United States v. Mamone, Not Reported in Fed. Supp. (2024) 2024 WL 2260934133 AFTR2d 2024-1570 0 □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ located Mr. Mamone at the location of his auto restoration business and personally served him with the summonses and Complaints for both Defendants. (/d. at 3, 4.) However, Plaintiff became aware that the auto restoration business does not serve as a residence and therefore it had not properly effected service on Mrs. Mamone by serving her husband there. (/d. at 4.) Thereafter, Plaintiff filed a motion requesting that the Court allow service of Mrs. Mamone by publication in the Star Ledger as well as an additional sixty days to serve her by publication. (/d.) The Honorable J. Brendan Day, U.S.M.J., denied Plaintiffs request without prejudice, finding it had not yet shown the diligence necessary to permit service by publication. (ECF No. 11.) As of the time of this Memorandum Opinion, it appears that Mrs. Mamone has not yet been served with process. 3 The Court notes that, although an individual informed Plaintiffs process server that Mrs. Mamone no longer resides at Defendants’ last known address in New Jersey, the Court finds that Plaintiff has demonstrated that Mr. Mamone is indeed domiciled in New Jersey. First, as noted above, Mr. Mamone's last known address, according to both a Lexis search of public records and the IRS's records, is 50 Winged Foot Lane, Washington, New Jersey 07892. (Decl. of Attorney Ann E. Nash (“Nash Decl.”), ECF No. 7-1 (“Response to Order to Show Cause”)). Second, since 2019, his wife's W2 and 1099 income statements have listed the address at 50 Winged Foot Lane in Washington, New Jersey. (Hornby Decl. J] 12.) Third, the IRS routinely sends balance notices to both Defendants at 50 Winged Foot Lane in Washington, New Jersey by certified mail—the most recent of which was sent on December 26, 2022. (Id. at | 13.) These notices were signed for and certified mail receipts returned to the IRS. (/d.) Fourth, Mr. Mamone has presented no evidence that he has acquired a new domicile. Korn v. Korn, 398 F.2d 689, 691 (3d Cir. 1968) (“A domicile once acquired is presumed to continue until it is shown to have been changed.”). Absent any argument to the contrary from Mr. Mamone that he no longer resides in New Jersey, the Court finds the record sufficient to establish Mr. Mamone's domicile in this state. See, e.g., Frett-Smith v. Vanterpool, 511 F.3d 396, 401 (3d Cir. 2008) (evidence of establishing a house of residence, obtaining employment, and filing tax returns suggested a parties’ domicile in a state). 4 The Court also notes that the United States’ claim against Defendants does not depend on Mrs. Mamone's appearance in this action. When a married couple files a joint tax return, “the liability with respect to the tax shall be joint and several’—meaning each spouse may be liable for the full amount due and owing. 26 U.S.C. § 6013(d)(3). Accordingly, Mr. Mamone is liable for the full amount of Defendants’ joint federal income tax liability for the 2010 tax year. 5 The United States is entitled to interest, penalties, and costs pursuant 26 U.S.C. § 6321 (“If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States”) and 26 U.S.C. § 6651 (penalties may be imposed on individuals who fail to pay taxes, in addition to the original amount of taxes). 6 Section 6621 establishes the interest rates for unpaid taxes: “the interest rate for each calendar quarter is the federal short-term rate for the first month of that quarter, plus three percent, rounded to the nearest full percent.” See United States v. Grossman, No. 15-2843, 2016 WL 3751949, at *2 (D.N.J. July 13, 2016) (citing 26 U.S.C. §§ 6621(a)(2), (b)(2)(A), and (b)(3)). Section 6622 establishes that in computing the amount of interest paid pursuant to the Internal Revenue Code, “such interest and such amount shall be compounded daily.”

End of Document © 2026 Thomson Reuters. No claim to original U.S. Government Works.