Weiskopf v. Tiny Cocoons, Inc.

CourtDistrict Court, N.D. Indiana
DecidedDecember 3, 2024
Docket4:23-cv-00071
StatusUnknown

This text of Weiskopf v. Tiny Cocoons, Inc. (Weiskopf v. Tiny Cocoons, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weiskopf v. Tiny Cocoons, Inc., (N.D. Ind. 2024).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA HAMMOND DIVISION AT LAFAYETTE

DANIEL WEISKOPF and ) ELIZABETH WEISKOPF, ) Plaintiffs, ) ) v. ) CAUSE NO.: 4:23-CV-71-JEM ) TINY COCOONS, INC., et al., ) Defendants. )

OPINION AND ORDER This matter is before the Court on Plaintiffs’ Motion for Entry of Default and Final Default Judgment against Defendant Tiny Cocoons, Inc., [DE 88], filed on October 15, 2024. Defendant Tiny Cocoons, Inc. was served and appeared by counsel, but counsel has since withdrawn his appearance, leaving Tiny Cocoons, Inc. unrepresented. On motion of Plaintiffs, the Clerk entered a default in this case. I. Background Plaintiffs, through counsel, filed a Complaint against Defendants Tiny Cocoons, Inc., Yinan Liu and Chris Baer on August 16, 2023, asserting claims for breach of contract, common law fraud, unjust enrichment, conversion, and violations of the Indiana Deceptive Consumer Sales Act, as well as seeking to pierce the corporate veil and requesting injunctive relief. Defendants appeared and answered through counsel on October 11, 2023. Plaintiffs’ counsel thereafter withdrew, and Plaintiffs are now proceeding pro se.1 Defendants have also been proceeding without counsel since August 8, 2024. On September 3, 2024, Plaintiffs were granted leave to proceed on an amended complaint. Because Tiny Cocoons, Inc. is unrepresented by counsel, it has not filed, and cannot file, an answer to the Amended Complaint.

1 Plaintiffs are attorneys licensed to practice law in Washington, but not the Northern District of Indiana. On April 18, 2024, the parties consented to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case. Thus, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. ' 636(c). II. Analysis Federal Rule of Civil Procedure 55 governs the entry of default and default judgment. Prior

to obtaining a default judgment under Rule 55(b)(2), there must be an entry of default as provided by Rule 55(a). See Unum Life Ins. Co. of Am. v. Nichols, No. 1:07CV50, 2008 WL 313443, *2 (N.D. Ind. Feb. 4, 2008) (citing Hill v. Barbour, 787 F. Supp. 145, 148 n.4 (N.D. Ill. 1992)). Under Rule 55(a), the clerk is to enter the default of a party against whom a judgment is sought when that party has failed to plead or otherwise defend. See Fed. R. Civ. P. 55(a). Plaintiffs moved for entry of a Clerk’s Default, and, on October 17, 2024, the Clerk of the Court entered an Order of Clerk’s Default pursuant to Rule 55(a). [DE 94]. After an entry of default, “the well-pleaded allegations of a complaint relating to liability are taken as true.” VLM Food Trading Int’l, Inc. v. Illinois Trading Co., 811 F.3d 247, 255 (7th

Cir. 2016). Damages, however, “must be proved unless they are liquidated or capable of calculation.” Wehrs v. Wells, 688 F.3d 886, 892 (7th Cir. 2012) (quoting Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990)). Damages can be proved by documentary evidence and detailed affidavits or by testimony and evidence presented at an evidentiary hearing. Quincy Bioscience, LLC v. Ellishbooks, 957 F.3d 725, 730 n.25 (7th Cir. 2020). Under Federal Rule of Civil Procedure 54(c), a “default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” In their motion, Plaintiffs request an award of: (1) $97,905 for actual damages, representing the sum they paid for tiny home; (2) Enhanced damages of two times their damages, in the sum of $195,810; (3) $17,657.12 in attorneys fees; (4) Prejudgment interest at 8% from the date of filing of the suit; (5) Postjudgment interest at 8%. The same relief is requested in the Amended Complaint. Plaintiffs allege, and therefore the Court accepts as true, that Tiny Cocoons agreed to provide a tiny home to Plaintiffs in exchange for the sum of $97,905.00. Plaintiffs paid Tiny Cocoons the sum of $97.905.00 in a payment of $92,769.00 on May 27, 2022, and $5,136.00 on June 7, 2022. Tiny Cocoons has not delivered the tiny home to Plaintiffs. Tiny Cocoons’ website contained various photographs of their designs and projects. Many of those photographs were stock images from websites like Shutterstock and Home Depot. In emails and oral communication between Plaintiffs and Tiny Cocoons, Tiny Cocoons represented to Plaintiffs that the tiny home ordered by Plaintiffs was already partially built and could be completed within approximately three months. On its website, Tiny Cocoons represented that it had a Creative Team, that it had over 15 years of experience building homes, and that Defendant Liu, a principal and a member of the Creative Team of Tiny Cocoons, had a LEEDS AP certification for green building.

A. Absence of Legal Counsel

“[A] corporation cannot litigate in a federal court unless it is represented by a lawyer.” United States v. Hagerman, 549 F.3d 536, 537 (7th Cir. 2008); see also Trade Well Int’l v. United Cent. Bank, 825 F.3d 854, 859-60 (7th Cir. 2016); Fidelity Nat’l Title Ins. Co. v. Intercounty Nat’l Title Ins. Co., 310 F.3d 537, 541 (7th Cir. 2002) (noting that withdrawal of counsel most likely “would leave [corporate entities] unrepresented, leading to default judgments against the three corporations (which can appear only by counsel)”). “The usual course when a litigant not entitled to litigate pro se loses its lawyer in the midst of the case is to give it a reasonable opportunity to find a new one and, if it fails, either to dismiss the case, or enter a default judgment.” Hagerman, 549 F.3d at 538 (internal citations omitted). A district court is “not required to wait indefinitely for [a corporate defendant] to obtain new counsel. Nor is a corporation entitled to grant itself a continuance by firing or failing to pay its lawyers.” JMB Mfg., Inc. v. Child Craft, LLC, 799 F.3d 780, 792 (7th Cir. 2015). In this case, Tiny Cocoons has had two different sets of counsel, both of which have

withdrawn shortly after filing their appearances. Tiny Cocoons has now been without representation for almost four months. It was notified of the motion for default judgment and has had an opportunity to be heard. Tiny Cocoons’ principals, Defendant Liu and Baer, have continued to litigate this case, without counsel. Plaintiffs claim that notice of plaintiffs’ motion for default judgment was sent via first class mail to both Liu and Baer. See DE 88 at 2. Tiny Cocoons has had ample time to secure replacement counsel and respond to the motion for default judgment. Thus, there are no due process concerns to prevent the Court from entering default judgment. See e.g. Trade Well Int’l, 825 F.3d at 860. B. Breach of Contract claim

To succeed on a breach of contract claim, Plaintiffs must prove the existence of a contract, that the defendant breached it, and damages. U.S. Valves, Inc., v.

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Bluebook (online)
Weiskopf v. Tiny Cocoons, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/weiskopf-v-tiny-cocoons-inc-innd-2024.