Plesha v. Bestline Int'l Research
| Decision Date | 16 November 2021 |
| Docket Number | Civil Action 19-1273 (BAH) |
| Parties | ADRIAN A. PLESHA, Plaintiff, v. BESTLINE INTERNATIONAL RESEARCH, INC., Defendant. |
| Court | U.S. District Court — District of Columbia |
Plaintiff Adrian A. Plesha, a consultant, seeks a default judgment in a breach of contract suit against his former client, defendant Bestline International Research, Inc., based on his factual allegations that, in 2017, defendant abruptly terminated their 2015 contract, without paying all monies due to plaintiff, and then defendant filed for bankruptcy. Compl. 1 5, 8, 20, 22, ECF No. 1; Pl.'s Mot. Default J (“Pl.'s Mot.”) at 3, ECF No. 27. Although a former executive of defendant has submitted letters to the Court on behalf of the defendant corporation at various points in this two-year long litigation, no attorney has yet filed an appearance on defendant's behalf, nor filed any response to the Complaint, despite this Court's admonition on two occasions that a corporation may not appear pro se. See Min. Order (July 3, 2019) (citing Greater S.E. Cmty. Hosp. Found., Inc. v Potter, 586 F.3d 1, 4-5 (D.C. Cir. 2009)); Min. Order (July 19, 2019).
For the reasons detailed below, default judgment is granted as to Counts One and Two of the Complaint and denied as to Counts Three, Four, and Five.
The relevant factual background and procedural history is summarized below, with plaintiff's factual allegations, as set out the Complaint, presumed to be true. See Robinson v. Ergo Solutions, LLC, 4 F.Supp.3d 171, 178 (D.D.C. 2014) .
Plaintiff consults with new companies to develop opportunities for business development. Compl. ¶ 5. On about September 10, 2015, plaintiff entered into a contract with defendant, a corporation that develops oil and gas treatment technologies for use in the public and private sectors. Id. ¶¶ 7-8.[1] Under the terms of the agreement, plaintiff was obliged to advocate for and introduce defendant to industry actors and government decision-makers. See Pl.'s Decl., Ex. A, Agreement for Professional Services (“Agreement”) § 7, ECF No. 27-2. In return for plaintiff's consulting services, defendant agreed to compensate plaintiff in three ways: (1) defendant would pay plaintiff a total of $120, 000, payable over twelve months in monthly installments of $6, 000 in cash and $4, 000 in supplementary equitable shares of defendant, Compl. ¶ 11 (citing Agreement § 2(a)); (2) defendant would pay plaintiff a “finder's fee” of 10% of defendant's stock or 10% of the net sale of the entire company if plaintiff “either brings in or introduces the company to a team of investors who acquire it or for finding a corporate shell in which the company would transfer its assets, ” id. ¶¶10, 14 (citing Agreement § 2(c)); and (3) defendant would pay plaintiff “a commission of 7% of the company's gross sales on all non- federal government business, ” id. ¶ 15 (citing Agreement § 2(d)).[2] This contract was effective for one year, from September 1, 2015 through August 31, 2016, with provision for an automatic extension for an additional twelve month period, unless defendant notified plaintiff of its intention to terminate the agreement “in writing before July 31, 2016.” Agreement §§ 4, 4.a.
Plaintiff introduced defendant to new clients including Chevron, Valvoline, UPS, AT&T, and Lowes. Compl. ¶ 18. On August 30, 2017, defendant terminated the Agreement in an email sent to plaintiff by John Polster, id. ¶ 22, whose position within the defendant corporation is not identified in the email but who has identified himself in correspondence to this Court as defendant's “Exec. Vice President.” See, e.g., Def.'s First Mot. Extension, ECF No. 12.[3]Polster's email stated that defendant did not “have the resources to continue.” Pl.'s Decl., Ex. B, August 30, 2017, E-Mail from John Polster to plaintiff, at 16, ECF No. 27-2; Compl. ¶ 22. Before the termination, defendant made some payments to plaintiff, but failed to make all payments for the cash, equitable shares, and company shares set out in the Agreement. Compl. ¶ 20. As a result, plaintiff alleges losses in the amount of approximately $284, 425. See Pl.'s Mot. at 6. Specifically, plaintiff claims that he is owed $87, 625 in deferred monthly payments as well as approximately $96, 000 in company equity, and/or shares of that value. See id. at 5-6 (citing Agreement § 2(a)). In addition, plaintiff estimates defendant owes $100, 800 in cash from commissions on gross sales. Id. at 6; see also Compl. ¶ 16 (citing Agreement § 2(d)).
Following the Agreement's termination, plaintiff made numerous attempts to recover the payments. Compl. ¶¶ 23-31. Defendant remained largely unresponsive for several months until November 16, 2017, when Polster advised plaintiff, via email, that the defendant owed him no commission but only $78, 875 in monthly fees. See id. ¶ 33. Polster offered to ask the Board to issue plaintiff $78, 875 of company stock, amounting to a 0.5% interest in defendant, id., but plaintiff rejected this offer, see Pl.'s Decl. ¶ 15, ECF No. 27-2. After subsequent negotiations failed, plaintiff initiated this action to recover unpaid amounts owed under the terms of the Agreement. See Compl. ¶¶34-38.
Plaintiff filed his Complaint on May 1, 2019, asserting five claims against defendant: (1) breach of contract, id. ¶¶ 40-46; (2) breach of implied covenant of good faith and fair dealing, id. ¶¶ 48-52; (3) quantum meruit, id. ¶¶ 54-59; (4) misrepresentation, id. ¶¶ 61-68; and (5) promissory estoppel, id. ¶¶ 70-73.
Defendant was served on July 25, 2019. Return of Serv. Aff. at 2, ECF No. 11. Even before then, on June 28, 2019, Polster, acting pro se, attempted to file an answer on defendant's behalf, but the Court denied leave to file because defendant, as a corporation, is not permitted to appear pro se. Min. Order (July 3, 2019). On August 15, 2019, the date by which defendant was required to have filed an answer, Polster submitted another letter to the Court requesting until September 27, 2019 to file defendant's answer, which letter was docketed and “[c]onstrued as motion for extension of time to respond to the complaint.” See Def.'s First Mot. Extension. Based on Polster's representation that defendant had obtained an attorney to file a petition in bankruptcy and needed time to retain representation in these proceedings, defendant was granted an extension until September 27, 2019 to respond to the Complaint. Min. Order (Aug. 22, 2019). No timely response was filed by defendant, however.
On October 7, 2019, the Court directed plaintiff to show cause why the case should not be dismissed for failure to prosecute. See Min. Order (Oct. 7, 2019) (citing D.D.C. LCvR 83.23). Polster, acting pro se, requested another extension on defendant's behalf, Def.'s Second Mot. Extension, ECF No. 14, which request was docketed and granted, requiring defendant's response to the Complaint to be filed by October 11, 2019, Min. Order (Oct. 9, 2019), but again no timely response was filed.
Plaintiff then sought entry of default, see Pl.'s Aff. Supp. Entry of Default, ECF No. 15, which the Clerk of Court entered against defendant on October 22, 2019, see Clerk's Entry of Default, ECF No. 16. Plaintiff subsequently explained that defendant had filed for Chapter 7 bankruptcy, see Pl.'s Response to Order to Show Cause (“Pl.'s Response”) ¶ 10, ECF No. 17, and plaintiff was asserting his rights to collection in defendant's bankruptcy case, see id. ¶ 13. Plaintiff was directed to file quarterly status reports, apprising the Court of the status of defendant's bankruptcy proceedings and whether plaintiff would be able to prosecute this case to judgment. Min. Order (Nov. 26, 2019).
Plaintiff submitted six timely status reports every 90 days over a period of eighteen months and, in the last status report, advised that “[t]he Bankruptcy Court issued a Final Decree deeming the Chapter 7 bankruptcy claim of the defendant ‘fully administered' on January 8, 2020, ” but that “proceedings in this Court are not complete, and plaintiff maintains that [he] will be able to prosecute this case to judgment.” Pl.'s Status Report (May 24, 2021) at 2-3, ECF No. 24.[4] Plaintiff thereafter filed the pending motion for default judgment, Pl.'s Mot. Defendant has filed no response to this motion or in response to this Court's order to show cause why plaintiff's motion should not be granted, see Min. Order (June 24, 2021).[5]
The Federal Rules of Civil Procedure “provide for default judgments . . . [to] safeguard plaintiffs ‘when the adversary process has been halted because of an essentially unresponsive party, '” and to protect “‘the diligent party . . . lest he be faced with interminable delay and continued uncertainty as to his rights.'” Mwani v. bin Laden, 417 F.3d 1 7 (D.C. Cir. 2005) (quoting Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). Pursuant to Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” FED. R. CIV. P. 55(a); see 10A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2682 (4th ed. 2018) (...
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