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Law Office Ga Lambert and Associates v. Davidoff

United States District Court, District of Columbia

August 15, 2014

LAW OFFICE G.A. LAMBERT AND ASSOCIATES, Plaintiff,
v.
TOFIK DAVIDOFF, et al., Defendants.

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, District Judge.

Plaintiff, the Law Office G.A. Lambert and Associates ("Plaintiff"), has filed an action against its former clients, Defendants Tofik Davidoff, Kalimantano GmbH, and First Royal Services GmbH ("Defendants"), alleging that Defendants defrauded Plaintiff and failed to pay legal fees and costs owed to Plaintiff. Presently before this court is Plaintiff's [19] Request for Default Judgment, or, in the Alternative, Motion for Default Judgment. Upon consideration of the parties' submissions[1], the relevant legal authorities, and the record as a whole, the Court concludes, for the reasons stated below, that (1) it would not be appropriate to vacate the entry of default against Defendants at this time, and (2) Plaintiff's [19] Request for Default Judgment, or, in the Alternative, Motion for Default Judgment is DENIED WITHOUT PREJUDICE.

I. BACKGROUND

A. Factual Background

Plaintiff's Complaint sets out the following allegations, which the Court takes as true for purposes of Plaintiff's motion for default judgment. See Int'l Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co. , 239 F.Supp.2d 26, 30 (D.D.C. 2002). Plaintiff is a District of Columbia law office headed by Attorney George A. Lambert ("Lambert"). Compl. ¶ 1. Defendant Tofik Davidoff ("Davidoff") is a German national, who is closely allied with two German companies: Defendants Kalimantano GmbH ("Kalimantano") and First Royal Services GmbH ("First Royal"). Id. ¶¶ 2-4. On September 3, 2012, Davidoff executed a retainer contract with Plaintiff. Id. ¶ 8. Under the terms of the retainer contract, Plaintiff represented Davidoff and, as needed, the entities, in which Davidoff was the principal. Id. ¶¶ 2, 9. Plaintiff also represented Kalimantano's employee, Konstantin Felde, and First Royal's Manager, Johannes Schwegler. Id. ¶ 10. Defendant First Royal is connected to this suit because it "was proposed to be a third-party payer and guarantor on the invoices to Davidoff and Kalimantano." Id. ¶ 4. Plaintiff represented Defendants Davidoff and Kalimantano in several suits brought in the United States District Court for the Southern District of New York and the United States District Court for the District of Columbia. See id . ¶ 7, 11-17. The parties conducted business together for approximately nine months before payment issues began to arise. Id. ¶ 18. After receiving a May 6, 2013 invoice from Plaintiff, Davidoff made numerous excuses for why payment was not forthcoming. Id. ¶ 18-32.

Several months after the May 6, 2013 invoice, Plaintiff had still not received payment from Defendants. On October 21, 2013, Davidoff sent the law office a copy of a transaction showing that 15, 000 Euros were deducted from one of First Royal's accounts on that date. Id. However, this money never reached Plaintiff. Id. ¶¶ 35-38. On October 30, 2013, Davidoff unexpectedly told Plaintiff that a settlement agreement had been reached in the only remaining lawsuit for which Plaintiff represented Defendants Davidoff and Kalimantano - a pending matter in the United States District Court for the Southern District of New York. Id. ¶ 40. Davidoff denied that he owed anything to Plaintiff, and also denied that any purported attempts to pay or wire funds took place. Id. ¶¶ 44-45. Nevertheless, on November 1, 2013, Attorney Lambert made a motion to withdraw from the pending matter in the United States District Court for the Southern District of New York. Id. ¶ 47. Upon being served with the motion, Davidoff claimed he did not know where to wire the payments to the Plaintiff. Id. ¶ 48.

B. Procedural History

Plaintiff filed its Complaint in this Court on November 4, 2013, alleging five counts: (1) "Breach of Contract", (2) "Quantum Meruit, Promissory Estoppel", (3) "Misrepresentation and Fraud", (4) "Fraud; False Wire Transfer Banking Document", and (5) "Fraud; False Wire Transfer Banking Document; Forgery." Compl. ¶¶ 52-92. Defendants were purportedly served with the Complaint and Summons on December 17, 2013, and were therefore required to respond by January 7, 2014. See Pl.'s Proof of Service Affidavits, ECF Nos. [10]-[12]. Defendants failed to file an answer or otherwise respond to the Complaint in this Court by this deadline, and therefore on February 7, 2014, Plaintiff moved for entry of default against all three Defendants. See Pl.'s Aff. in Support of Default, ECF No. [16]. The Clerk of the Court subsequently entered default against all three Defendants on February 10, 2013. See Clerk's Entry of Default, ECF No. [18]. The following day, Plaintiff filed the present [19] Request for Default Judgment, or, in the Alternative, Motion for Default Judgment. The present motion, mirroring the Complaint, seeks default judgment against Defendants Davidoff and Kalimantano GmbH, jointly and severally for damages and costs totaling $166, 158.19, and against Defendant First Royal Services GmbH for damages totaling $20, 508.45.

On February 27, 2014, the Clerk of the Court received a [20] letter from Defendants in response to the Entry of Default. Defendants state in this letter, dated February 20, 2014, that they received Plaintiff's complaint on December 13, 2013. Defs.' Letter (Feb. 20, 2014), ECF No. [20] at 1. Defendants state that their German attorney e-mailed a response to this action to Plaintiff's counsel on January 2, 2014. Id. Apparently not understanding that a responsive filing needed to be made with the Court, Defendants state that "[o]ur attorney and we ourselves responded to Mr. Lambert's action in a timely manner and did not miss any deadlines...." Id. Defendants also attach (in both English and German) the letter they sent Plaintiff's counsel which states that "[w]e oppose against [sic] your action against the three defendants and request to dismiss the actions. Furthermore, we herewith submit the objection against having the United States as place of jurisdiction." Id. at 8. This letter also includes factual objections to Plaintiff's claims. Id. ("As reported by my clients there are no more fee claims to be settled, your attorney fee has already been paid in full.").

In light of this filing, the Court ordered Plaintiff to file a supplemental brief explaining why it would not be appropriate to deny Plaintiff's motion for default judgment and vacate the entry of default. See Order, ECF No. [21] at 3. The Court invited Defendants to respond to this briefing, and further advised Defendants that if they planned to contest this lawsuit going forward, they or their counsel should enter an appearance on the docket. Id. at 3-4. The Court instructed Defendants to enter such an appearance by no later than April 24, 2014. Id. at 4.

Plaintiff subsequently filed its supplemental brief arguing that, despite Defendant's letter, the Court should not vacate the entry of default and should grant Plaintiff's motion for default judgment. Pl.'s Resp. Defendants did not respond to this filing, despite the Court's invitation. However, on March 19, 2014, the Clerk of the Court received a second letter from Defendants dated March 13, 2014. Defs.' Letter (Mar. 13, 2014), ECF No. [24]. In this letter, Defendants contest the allegations made by Plaintiff, arguing that Plaintiff "constantly and deliberately provides false information to the court in order to gain advantages with the court." Id. at 1. The letter also encloses what Defendants describe as their contract with Plaintiff, which differs from the version of the contract provided by Plaintiff. Id. at 3-4. Defendants conclude by requesting "that this matter [be] referred to German courts, as [they] are all German nationals with a permanent place of business and permanent place of residence in the Federal Republic of Germany." Id. at 1.

In response to Defendants' second letter, the Court issued an order granting leave to file this document and its attachments, albeit with several caveats. See Order, ECF No. [23]. As an initial matter, the document could only be filed on behalf of Defendant Davidoff, a German national. Id. at 2. The remaining Defendants, as corporations, could not proceed pro se in this Court, and therefore the Court denied leave to file the letter on their behalf. Id. (citing Rowland v. Cal. Men's Colony , 506 U.S. 194, 201-02 (1993) ("It has been the law for the better part of two centuries... that a corporation may appear in the federal courts only through licensed counsel.")). The Court also advised Defendants that their repeated letters were insufficient to serve as pleadings in this action, and thus could not be used to defeat Plaintiff's claims or its motion for default judgment. Id. (citing LCvR 5.1(a) ("Except when requested by a judge, correspondence shall not be directed by the parties or their attorneys to a judge, nor shall papers be left with or mailed to a judge for filing.")). The Court further noted that the letter consisted of general denials rather than a specific response to the allegations in Plaintiff's complaint and the arguments in Plaintiff's motion for default judgment. Id. at 3. Furthermore, although Defendants' letter argued that this action should be transferred to German courts, Defendants had failed to file a motion formalizing this request or providing the legal basis for such a transfer. Id. Therefore, the Court again reminded Defendants of the April 24, 2014 deadline for entering an appearance in this action. Id. While Defendant Davidoff could file a brief on his own behalf without the assistance of counsel, the remaining corporate Defendants were required to file any response through licensed counsel. Id. The Court warned Defendants that if they failed to file a response by the April 24, 2014 deadline, they risked the imposition of default judgment against them. Id. The Court also offered to extend this deadline if Defendants demonstrated good cause. Id.

Despite the Court's admonitions, Defendants failed to make any filing by the April 24, 2014 deadline. An attorney purporting to represent Defendants did contact chambers by telephone in the days preceding this deadline to inquire about an extension of the April 24, 2014 deadline. The Court instructed the attorney that such an extension request could not be made over the telephone and had to be made via motion pursuant to the Federal Rules of Civil Procedure and the Local Rules of this Court. However, no extension request was ever made. Instead, on May 12, 2014, the Court of the Clerk received another three letters, one from each Defendant. Davidoff Letter (May 2, 2014), ECF No. [25]; First Royal Letter (May 2, 2014), ECF No. [26]; Kalimantano Letter (May 2, 2014), ECF No. [27]. The Court denied leave to file the letters from Defendants Kalimantano and First Royal, as these Defendants are corporations not entitled to proceed pro se . In his letter, Defendant Davidoff represents that no contract exists between him and Plaintiff, and thus Plaintiff's suit for breach of contract is meritless. Davidoff Letter (May 2, 2014), ECF No. [25] at 1. Defendant Davidoff also offers additional allegations regarding his relationship with Plaintiff that support his contention of no liability, including the allegation that he "ha[d] never ordered Mr. Lambert, Attorney at Law, to represent [him] at court." Id. Defendant Davidoff's letter concludes with a "request that German courts assume jurisdiction for this civil matter."[2] Id.

Given this factual and procedural background, the Court now analyzes two issues. First, whether, in light of Defendants' informal and sporadic participation in this lawsuit, it is appropriate to vacate the entry of default against these Defendants. Second, if the default should not be vacated, ...


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