SNH Med. Office Props. Tr. v. A Bloomin' Sandwich Café, Inc.
| Decision Date | 30 September 2020 |
| Docket Number | No. 19-cv-745 (KBJ),19-cv-745 (KBJ) |
| Parties | SNH MEDICAL OFFICE PROPERTIES TRUST, Plaintiff, v. A BLOOMIN' SANDWICH CAFÉ, INC., Defendant. |
| Court | U.S. District Court — District of Columbia |
On October 19, 2016, Plaintiff SNH Medical Office Properties Trust ("SNH") executed a lease with Defendant A Bloomin' Sandwich Café, Inc. ("ABSC"), which provided that ABSC could open a restaurant on property owned by SNH. (See Compl., ECF No. 1, ¶¶ 6-7.) On February 6, 2019, SNH terminated the lease (see id. ¶ 12) because ABSC defaulted under the agreement by: (1) "fail[ing] to properly maintain the premises, resulting in 28 health [code] violations" (id. ¶ 11.a); (2) failing to pay rent and other charges (see id. ¶ 11.b); and (3) "abandon[ing] the leased premises" after failing "to open the business for more than two consecutive days" (id. ¶ 11.c). SNH filed the instant action on March 18, 2019; the complaint alleges breach of contract and seeks monetary damages (see id. ¶ 19) and, because ABSC did not timely file an answer to SNH's complaint, SNH moved for default judgment on August 30, 2019 (see Pl.'s Mot. for Default J., ECF No. 9), requesting a judgment in the amount of $217,879.67, which purportedly represented the total amount owed by ABSC as of that date (see id. at 1). The Court referred SNH's motion to a magistrate judge for a Report and Recommendation ("R&R") on August 30, 2019. (See Min. Order of Aug. 30, 2019.)
Before this Court at present is the R&R that the assigned Magistrate Judge, Robin M. Meriweather, has filed regarding SNH's motion for default judgment. (See Report and Recommendation, ECF No. 13.)1 The R&R reflects Magistrate Judge Meriweather's opinion that SNH's motion should be granted in part, because ABSC was properly served and is in default (see id. at 6), and the factual allegations in the complaint are legally sufficient to state a claim for breach of contract (see id. at 8). Magistrate Judge Meriweather further concludes that SNH has demonstrated that it should be awarded certain damages—unpaid rent (see id. at 11), real estate taxes (see id. at 12), rent loan payback and add back arrearages (see id. at 13), late fees (see id. at 14), attorneys' fees (see id.), and post-judgment interest (see id. at 17)—for a total of $217,496.56 (see id. at 1). But the R&R also recommends that, because SNH has not yet shown that it is entitled to collection costs and fees, the Court should defer ruling on the motion for default judgment with respect to those additional damages amounts. (See id. at 18.)
To be specific, Magistrate Judge Meriweather first determines that SNH is entitled to default judgment as to liability pursuant to Federal Rule of Civil Procedure 55.2 In fact, according to the R&R, default was properly entered in SNH's favor (seeid. 6-7), and the complaint's allegations are legally sufficient to state a claim (see id. at 8-9), insofar as SNH effected service on ABSC through the Superintendent of Corporations at the D.C. Department of Consumer Regulatory Affairs consistent with D.C. law (see id. at 7 (citing D.C. Code § 29-104.12)). Moreover, according to the R&R, SNH's complaint states a claim for breach of contract under D.C. law because: (1) "[t]he complaint, signed Lease Agreement, and signed Fifth Amendment to the Lease Agreement demonstrate that a valid contract existed between the parties" (id. at 8); (2) "[t]hat contract imposed obligations upon ABSC" (id.); (3) by defaulting on the complaint, ABSC admitted that it breached its duties under the contract (see id. at 9); and (4) "SNH provides figures[] and documentation of the monetary damages it incurred, as result of this breach" (id.).
Additionally, Magistrate Judge Meriweather "review[s] the itemized list of expenses and other supporting documents to determine an appropriate damages award[,]" given that "SNH's proposed damages award is not a sum certain" due to its request for attorneys' fees. (Id. at 10 (citing Combs v. Coal & Mineral Mgmt. Servs., Inc., 105 F.R.D. 472, 474 (D.D.C. 1984).) First, Magistrate Judge Meriweather confirms that "[t]he sum of [ABSC's] unpaid monthly 'base' rent amounts is $172,297.09, [which is] the same amount that SNH has requested." (Id. at 12.) Second, according to the Magistrate Judge, SNH submitted "receipts, payment invoices, tax returns, tax abatement records, and charts" that confirm that the unpaid real estate taxes for the leased property in fiscal years 2017, 2018, 2019, and 2020 amounted to $7,943.08. (See id. at 12-13.) Third, the Magistrate Judge concludes that ABSC previously acknowledged it owed $29,161.17 to SNH for failure to pay prior rents and, because ABSC failed to repay the full amount, SNH is entitled to $18,161.17 in rentloan payback and add back arrearages. (See id. at 13-14.) Fourth, according to Magistrate Judge Meriweather, the lease provided by SNH, "which includes a provision for a flat 5% fee on all rent amounts which are not timely paid[,]" supports SNH's request for $7,499.67 in late fees. (Id. at 14.) Fifth, Magistrate Judge Meriweather finds that "SNH has demonstrated that its request for $9,482.50 in attorney's fees is reasonable" (id. at 15), and that SNH has also justified its request to recover $2,122.82 in costs "for a process server, messenger service, filing fees, travel, and PACER" (id. at 16). And sixth, the Magistrate Judge notes that post-judgment interest is mandate under the applicable statute. (See id. at 17 (citing 28 U.S.C. §1961(a)).) However, with respect to the unspecified collection costs and fees that SNH requests, Magistrate Judge Meriweather determines that SNH "neither mentions these costs in the memorandum, nor provides any documentation regarding the estimated sum of these costs, fees or expenses[,]" and, according to the R&R, the request for "uncertain future expenses" is premature at this time. (Id. at 18-19 (internal citations omitted).) Thus, the R&R recommends that SNH be awarded damages in the amount of "$205,901.24 plus $9482.50 in attorney's fees, $2,122.82 in costs, and post-judgment interest, but that the Court defer consideration of SNH's request for collection fees until such time as SNH can prove that it has incurred such fees." (Id. at 20.)
In addition to articulating these conclusions, the R&R also advised the parties that either one of them may file written objections to the Magistrate Judge's findings and recommendations (id. at 8), and it further admonished the parties that failure to file timely objections might result in waiver of further review of the matters addressed therein (id.). Under this Court's local rules, any party who objects to an R&R filed by a Magistrate Judge must file a written objection with the Clerk of the Court within 14days of the party's receipt of the R&R. See LCvR 72.3(b). The due date for objections to the Magistrate Judge's R&R in the instant case has passed, and none have been filed.
This Court has reviewed Magistrate Judge Meriweather's report, and agrees with its careful and thorough analysis and conclusions, with two exceptions. The first is a minor scrivener's error: according to this Court's calculations, the amounts for unpaid rent, unpaid real estate taxes, rent loan payback and add back arrearages, late fees, attorneys' fees, and litigation costs add up to a total of $217,506.33, rather than the default judgment amount of $217,496.56 that the R&R recommends. (See R&R at 20.) Second, in the absence of any indication that collection costs have already been incurred, this Court views Plaintiff's request for a default judgment that includes collection fees and costs as merely a placeholder that permits Plaintiffs to return to the Court to seek such fees at a later date. Thus, rather than treating the request as premature, the Court will grant Plaintiff's motion for a default judgement in full, with the understanding that Plaintiff's will be permitted to return to the Court in the future to request an amended judgment that contains such costs, if necessary.
Accordingly, the R&R will be ADOPTED IN PART, in as much as the Plaintiff's Motion for Default Judgment will be GRANTED, and a judgment of default in Plaintiff's favor will be entered in the amount of $217,506.33 for damages, attorneys' fees, and litigation costs, plus post-judgment interest and collection costs to be determined.
A separate Order accompanies this Memorandum Opinion.
DATE: September 30, 2020
/s/_________
KETANJI BROWN JACKSON
United States District Judge
This case involves breach of contract claims arising from a commercial real estate lease between Plaintiff, SNH Medical Office Properties Trust ("SNH") and Defendant, A Bloomin' Sandwich Café, Inc. ("ABSC"). After obtaining an entry of default against ABSC, SNH moved for default judgment against ABSC; the default judgment motion is currently pending before the Court. Mot. Default J. 1, ECF No. 9 ("Pl.'s Mot."). ABSC has failed to respond to the complaint or Motion for Default Judgment. Having reviewed the relevant pleadings and applicable law, the undersigned recommends that Judge Ketanji B. Jackson GRANT-IN-PART SNH Medical Office Properties Trust's Motion for Default Judgment against ABSC, enter default judgment in favor of SNH, and award SNH $217,496.56 (comprised of $205,901.24 in damages, $9,482.50 in attorneys' fees, and $2112.82 in costs) plus post-judgment interest.
SNH executed a lease ("the Lease") with ABSC on or about October 19, 2016. See Compl. ¶ 7, ECF No. 1. The Lease amended a lease that SNH's and ABSC's predecessors in interest had entered into in July 1992. See id. ¶¶ 6-7. The Lease provided that ABSC could open a restaurant on property owned by SNH at 2141 K Street, N.W., Washington, D.C. ("the Leased Property"). See id. ¶ 6; Mot. Default J., Decl. Matthew Wilson Supp. ("Wilson Decl."), Ex. B ¶ 4, ECF No....
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