Ryder Truck Rental, Inc. v. Chanje Energy, Inc.

• Decision Date: 04 March 2022
• Docket Number: 1:21-cv-21044-JLK/Becerra
• Court: U.S. District Court — Southern District of Florida
• Parties: RYDER TRUCK RENTAL, INC., Plaintiff v. CHANJE ENERGY, INC. and FDG ELECTRIC VEHICLES LIMITED, Defendants.

RYDER TRUCK RENTAL, INC., Plaintiff
v.
CHANJE ENERGY, INC. and FDG ELECTRIC VEHICLES LIMITED, Defendants.

No. 1:21-cv-21044-JLK/Becerra

United States District Court, S.D. Florida

March 4, 2022

REPORT AND RECOMMENDATION ^[1]

JACQUELINE BECERRA UNITED STATES MAGISTRATE JUDGE

THIS CAUSE came before the Court on Plaintiff Ryder Truck Rental, Inc.'s (“Plaintiff”) Motion for Entry of Clerk's Default Judgment against Defendants Chanje Energy, Inc. (“Chanje”) and FDG Electric Vehicles Limited (“FDG”) (collectively “Defendants”). ECF No. [18]. Defendants did not file a response to the Motion and the time to do so has passed. Upon due consideration of Plaintiff's Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby RECOMMENDED that the Motion be GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

This case stems from Defendants' failure to deliver certain electric vehicles ordered by Plaintiff. Plaintiff and Defendant Chanje entered into a Vehicle Service and Parts Distribution Agreement (the “Vehicle Agreement”) on March 17, 2017. ECF No. [1] ¶ 13. Thereafter, Defendant FDG executed a Joinder Agreement for the purpose of becoming a party to the Vehicle

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Agreement. Id. ¶ 21. Pursuant to the Vehicle Agreement and subsequent Joinder Agreement, Plaintiff agreed to purchase 125 vehicles from Defendant Chanje for which it paid an initial deposit of $4, 375, 000 ($35, 000 initial deposit per vehicle). Id. ¶¶ 23-25. By December 2017, only 22 vehicles had been delivered by Defendant Chanje. Id. ¶ 26. Plaintiff states that on December 7, 2017, it fully paid for the 22 vehicles that had been delivered. Id. ¶ 27. However, Plaintiff mistakenly paid $45, 000 per vehicle, the full price, as opposed to $10, 000 per vehicle, the remaining balance based on the initial deposit. Id. ¶¶ 27-28. Thus, Plaintiff demanded that Defendant Chanje return the amount it overpaid ($35, 000 for each of the 22 vehicles for a total of $770, 000), but Defendant Chanje refused to do so. Id. ¶ 29. Instead, Defendant Chanje delivered three more vehicles and advised that it could not meet its obligation to deliver the remaining 100 vehicles. Id. ¶ 33. As such, Plaintiff demanded a refund of its deposit for the 100 undelivered vehicles ($3, 500, 000), along with the overpayment amount ($770, 000), a total of $4, 270, 000. Id. ¶¶ 38-40.

Based on Defendants' indebtedness to Plaintiff, two promissory notes were executed. Id. ¶ 40. The first promissory note, dated February 28, 2019, provides that Defendant Chanje, as the borrower, and Defendant FDG, as the guarantor, are indebted to Plaintiff in the principal amount of $770, 000 (the “First Promissory Note”). Id. ¶ 41. Defendants paid $500, 000 of the $770, 000 due under the First Promissory Note, thereby leaving an outstanding balance of $270, 000. Id. ¶ 42. In addition, Plaintiff and Defendant Chanje executed a second promissory note on November 13, 2019, which provides that Defendant Chanje is indebted to Plaintiff in the principal amount of $3, 500, 000 (the “Second Promissory Note”). Id. ¶ 50. It appears that Defendant FDG is not a party to the second promissory note. See ECF No. [1-8]. Defendant Chanje has not made any payments under the second promissory note, and as such, the full $3, 500, 000 remains outstanding. ECF No. [1] ¶ 51.

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Moreover, in connection with the Second Promissory Note, which remains fully outstanding, Plaintiff and Defendant Chanje entered into a Side Letter Agreement, “incorporate[ing] each of the agreements between the parties up until that time, including the Vehicle Agreement, the 2017 Purchase Order, and the [Second] Promissory Note.” Id. ¶ 57. “The Side Letter Agreement also served as the termination of the 2017 Purchase Order for the remaining 100 vehicles that were not delivered.” Id. ¶ 57. Moreover, in the Side Letter Agreement, Plaintiff and Defendant Chanje agreed that Plaintiff was “entitled to a full refund of $3, 500, 000, and further agreed that the refund should be made in the form of a credit deducted from the purchase price of vehicles ordered in a separate purchase order, ” which “was for the purchase of 900 vehicles that would be leased by FedEx.” Id. ¶ 59. The Side Letter Agreement states that if Defendant Chanje failed to deliver the vehicles, then the principal amount under the Second Promissory Note would become immediately due. Id. ¶ 60. Defendant Chanje failed to deliver the vehicles agreed upon, and as such, the $3, 500, 000 due under the Second Promissory Note remains outstanding. Id. ¶ 61.

On March 17, 2021, Plaintiff filed its Complaint, asserting: (1) one count for breach of contract as to Defendants Chanje and FDG based on their breach of the First Promissory Note for $770, 000 (Count I); (2) one count for breach of contract as to Defendants Chanje and FDG based on their breach of the Second Promissory Note for $3, 500, 000 (Count II); (3) one count for breach of contract as to Defendants Chanje and FDG based on their breach of the Vehicle Agreement and Joinder Agreement (Count III); (4) one count for fraudulent misrepresentation against Defendants Chanje and FDG (Count IV); and (5) one count for unjust enrichment against Defendants Chanje and FDG (Count V). Id. at 16-22.

A Clerk's Default has been entered against both Defendants Chanje and FDG based on their failure to respond to the Complaint. ECF Nos. [8], [17]. Thereafter, Plaintiff filed the instant Motion, requesting the entry of default judgment against Defendants Chanje and FDG. ECF No.

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[18]. Plaintiff argues that because “Defendants have failed to pay the total amounts of the two promissory notes upon their coming due[, ] Defendants owe $270, 000 on the [First] Promissory Note and $3, 500, 000 on the [Second] Promissory Note, totaling an indebtedness of $3, 770, 000.00.” Id. at 6-7. Plaintiff requests an award of $3, 770, 000 plus $402.00, the costs for filing the instant action, for a total of $3, 770, 402. Id. at 7. In addition, Plaintiff states that it has sufficiently stated a claim for fraudulent misrepresentation and unjust enrichment, but that even if the Court does enter default judgment as to those counts, the breach of contract claims “alone support the relief requested in the form of simple contract breaches.” Id. at 11.

In support of its Motion, Plaintiff submitted the declaration of Isabel M. Marini, Plaintiff's Chief Financial Officer. ECF No. [18-3]. Ms. Marini testified that she was familiar with the business relationship between the Parties and with Defendants' failure to fulfill their obligations pursuant to various agreements with Plaintiff. Id. at 1. Ms. Marini attests to the execution of the Vehicle Agreement, Joinder Agreement, and two promissory notes. Id. at 2-4. She states that under the Vehicle Agreement, Plaintiff paid Defendant Chanje an initial deposit of $4, 375, 000 for all 125 vehicles ordered. Id. In addition, Ms. Marini notes that once Defendant Chanje delivered 22 of the vehicles ordered, Plaintiff mistakenly paid Defendant Chanje $45, 000 per vehicle (the entire cost of the vehicle), rather than the remaining balance due of $10, 000 per vehicle. Id. at 4. As a result, Ms. Marini states that Plaintiff overpaid $35, 000 per vehicle for the twenty-two vehicles delivered, for a total overpayment of $770, 000. Id. Ms. Marini states that after the delivery of the twenty-two vehicles, only three more vehicles were delivered by Defendant Chanje. Id. Thus, Plaintiff seeks a return of $3, 500, 000, the deposit for the 100 undelivered vehicles. Id. at 4-5. In addition, Ms. Marini attests that Defendants have only paid $500, 000 under the First Promissory Note. Id. at 5. Moreover, Ms. Marini states that Defendant Chanje has not made any payments under the Second Promissory Note and has failed to perform under the Side Letter

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Agreement. Id. at 5-7. As such, Ms. Marini states that Defendants are indebted to Plaintiff in the amount of $3, 770, 000. Id. at 9.

II. ANALYSIS

Federal Rule of Civil Procedure 55 sets forth the procedure for obtaining a default judgment. First, subsection (a) provides that the Clerk of Court must enter default when the defendant fails “to plead or otherwise defend.” Fed.R.Civ.P. 55(a). Next, upon the entry of a clerk's default, the Court must enter a judgment “[i]f the plaintiff's claim is for a sum certain or a sum that can be made...