The History Department & Co v. Mertz

Opinion

5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE 8 THE HISTORY DEPARTMENT & CO., Case No. C20-5608-RSL 9

10 Plaintiff, ORDER DENYING MOTION 11 v. FOR DEFAULT JUDGMENT 12 JESSE MERTZ, et al., 13 Defendants. 14

15 This matter comes before the Court following plaintiff’s filing of the “Declaration of 16 Miranda Keenan in Response to Show Cause,” Dkt. # 28, in support of plaintiff’s motion for 17 default judgment, Dkt. # 17. This most recent declaration is plaintiff’s only response to the 18 Court’s last Order, which concerned plaintiff’s deficient support for its motion for default 19 judgment. Dkt. # 27. Having reviewed the allegations of the complaint, plaintiff’s motion for 20 default judgment, plaintiff’s responses to the Court’s Orders, and the balance of the record, the 21 Court finds as follows: 22 As stated in the Court’s last Order, plaintiff filed this action to obtain relief for alleged 23 breach of contract and violation of the Washington State Consumer Protection Act (“WCPA”). 24 Although defendants were served with the summons and complaint on November 18, 2020, Dkt. 25 # 13, they still have not responded. Default was entered against them on March 5, 2021. Dkt. 26 # 16. The Court issued an Order to Show Cause because it appeared that plaintiff overstated the 27 principal judgment amount of $106,676.55. Dkt. # 24 at 2–3. 28 1 When the Court reviewed plaintiff’s response to the Court’s Order to Show Cause, the 2 Court agreed conceptually that plaintiff “is entitled to the benefit of [the] bargain,” Dkt. # 25 at 3 2, but plaintiff provided only the following vague explanation of how that principle applies: 4 Here the plaintiff had an expected profit from the entire transaction. Had Mertz not 5 breached, plaintiff would have had a profit and not a loss. Plaintiff is entitled to the 6 benefit of its bargain. Had plaintiff been able to obtain replacement equipment at a higher price, it would have been entitled to that price plus the profits. 7 8 Dkt. # 25 at 2. In other words, plaintiff appeared to be claiming in its response that lost profits 9 are part of the requested principal judgment amount. “Lost profits are properly recoverable as 10 damages where (1) they are within the contemplation of the parties at the time the contract was 11 made, (2) they are the proximate cause of defendant’s breach, and (3) they are proven with 12 reasonable certainty.” Milgard Tempering, Inc. v. Selas Corp. of Am., 902 F.2d 703, 710 (9th 13 Cir. 1990) (quoting Larsen v. Walton Plywood Co., 65 Wn.2d 1, 15, modified, 65 Wn.2d 1 14 (1964)). Plaintiff filed a Declaration of Miranda Keenan, plaintiff’s principal, regarding the 15 damages at issue, but her statement that profit “dropped from $60,000 to a net loss of about 16 $3,000” failed to provide any detail on how these figures were calculated. Dkt. # 26 at 2, ¶ 5.1 17 Moreover, Ms. Keenan stated that $106,676.55 is her “out-of-pocket cost for the machines,” 18 Dkt. # 26 at 3, ¶ 7, which is consistent with her previous declaration, Dkt. # 18 at 2, ¶¶ 4–5, but 19 this statement also suggested that the $60,000 figure was not used in plaintiff’s calculation of the 20 $106,676.55 principal judgment amount. Because it was altogether unclear how the out-of- 21 pocket cost for both machines would be equivalent to the benefit of the bargain, and plaintiff’s 22 evidence was consequently inadequate for purposes of entering a default judgment in the 23 requested amount against defendants, the Court afforded plaintiff yet another opportunity to 24 properly substantiate its damages as the Federal Rules of Civil Procedure and this Court’s Local 25 Civil Rules require. Fed. R. Civ. P. 55; LCR 55(b)(2)(A); see generally Dkt. # 27. 26 27 28 1 The most recent declaration of Ms. Keenan, Dkt. # 28, still fails to properly substantiate 2 the damages requested.1 Plaintiff seeks a principal judgment amount of $106,676.55 Dkt. # 17- 3 1; Dkt. # 18 at 2, ¶ 6; Dkt. # 26 at 3, ¶ 7. Ms. Keenan’s most recent declaration does not even 4 refer to the $106,676.55 amount. See Dkt. # 28. Ms. Keenan reiterates her assertion that her 5 profit would have been $60,000, had the contract not been breached. Dkt. # 28 at 2, ¶ 4. And 6 plaintiff claims that she had to “use personal money to buy $50,000 inferior equipment to 7 cover.” Id. In other words, Ms. Keenan would seem to be claiming that plaintiff is due $110,000 8 for the principal judgment (the alleged $60,000 in lost profits, and $50,000 in cover). 9 There are a variety of issues with Ms. Keenan’s latest declaration, at least two of which 10 are significant. First, the $110,000 amount suggested by the declaration, id., differs from the 11 $106,676.55 amount listed in the motion for default judgment. Second, Ms. Keenan fails to 12 adequately explain how she arrived at the conclusion that her profit would have been $60,000. 13 None of the quotes, emails, or invoices reference $60,000.2 This declaration is insufficient to 14 establish the amount owed. Plaintiff’s evidence is inadequate for purposes of entering a default 15 judgment in the requested amount against defendants. See, e.g., Beck v. Pike, No. C16- 16 0001JLR, 2017 WL 530354, at *4 (W.D. Wash. Feb. 9, 2017) (concluding that evidence of 17 damages was inadequate where plaintiff failed to provide an explanation or methodology for the 18 amount of money he lost as a result of defendant’s breach); Penpower Tech. Ltd. v. S.P.C. 19 Tech., 627 F. Supp. 2d 1083, 1093 (N.D. Cal. 2008) (citing Geddes v. United Fin. Grp., 559 20 F.2d 557, 560 (9th Cir. 1977)) (“Without a concrete method for determining provable damages, 21 a monetary award is not supportable.”). Therefore, the Court must deny plaintiff’s motion for 22 default judgment. See, e.g., Hannon v. Versteeg, No. 2:20-CV-00136-RAJ, 2021 WL 603296, at 23 *2 (W.D. Wash. Jan. 13, 2021) (holding the Court must deny a motion for default judgment 24

25 1 Additionally, Miranda Keenan’s electronic signature is misspelled as “Mirandd Keenan.” The 26 Court assumes, arguendo, that the signature is valid. 2 For example, it is altogether unclear how the original project quote of $149,850, id. at 1, 3, fits 27 into plaintiff’s calculation of damages. 28 1 where the declaration is insufficient to establish the amount owed). Given that the principal 2 judgment amount remains insufficiently substantiated, the Court also cannot fully evaluate the 3 appropriateness of the punitive damages requested pursuant to the WCPA. See State Farm Mut. 4 Auto. Ins. Co. v. Campbell, 538 U.S. 408, 409 (2003) (“Thus, this Court has instructed courts 5 reviewing punitive damages to consider (1) the degree of reprehensibility of the defendant's 6 misconduct, (2) the disparity between the actual or potential harm suffered by the plaintiff and 7 the punitive damages award, and (3) the difference between the punitive damages awarded by 8 the jury and the civil penalties authorized or imposed in comparable cases.”). 9 For all of the foregoing reasons, plaintiff’s motion for default judgment (Dkt. # 17) is 10 DENIED without prejudice to a renewed motion for default judgment that addresses the 11 concerns the Court raised in this Order. 12 13 DATED this 25th day of October, 2021. 14 15 A

16 Robert S. Lasnik 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28