Strategic Advisers Grp. v. Grupo Induservice S.A.S.

• Decision Date: 18 November 2021
• Docket Number: 1:21-cv-21726-JEM/Becerra
• Parties: STRATEGIC ADVISERS GROUP LLC, Plaintiff v. GRUPO INDUSERVICE S.A.S., Defendant.
• Court: U.S. District Court — Southern District of Florida

STRATEGIC ADVISERS GROUP LLC, Plaintiff
v.
GRUPO INDUSERVICE S.A.S., Defendant.

No. 1:21-cv-21726-JEM/Becerra

United States District Court, S.D. Florida

November 18, 2021

REPORT AND RECOMMENDATION ^[1]

JACQUELINE BECERRA, UNITED STATES MAGISTRATE JUDGE

THIS CAUSE came before the Court on Plaintiff Strategic Advisers Group LLC's (“Plaintiff”) Motion for Default Final Judgment Against Defendant Grupo Induservice S.A.S. (“Defendant”). ECF No. [13]. Defendant did not file a response to the Motion and the time to do so has passed. On November 16, 2021, the Court held a hearing on this matter. ECF No. [19]. Only Plaintiff appeared for the hearing. Id. 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.^[2]

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I. BACKGROUND

On May 5, 2021, Plaintiff filed this breach of contract action against Defendant. ECF No. [1]. On June 11, 2021, a Clerk's Default was entered based on Defendant's failure to respond to the Complaint. ECF No. [10]. Subsequently, the District Court entered its Order on Default Final Judgment Procedure. ECF No. [11]. Therein, the District Court ordered Plaintiff to file a motion for default final judgment no later than July 15, 2021. Id. at 1. The District Court noted that if Defendant failed to respond to the Complaint or move to set aside the Clerk's Default by July 15, 2021, then a default final judgment could be entered. Id.

On July 9, 2021, Plaintiff filed the instant Motion for Default Final Judgment. ECF No. [13]. Plaintiff argues that Defendant breached an “international consulting and fee protection agreement” between the Parties. Id. ¶ 2. Specifically, the agreement requires that Defendant pay Plaintiff five percent of all investment profits achieved as a result of services rendered by Plaintiff. Id. ¶ 9. Plaintiff alleges that on or about April 2021, Defendant “began conducting secretive, undisclosed, negotiations” that “came to fruition as a direct result of efforts led by [Plaintiff]” and culminated with the execution of an investment agreement to Defendant's benefit. Id. ¶¶ 18-20. Thus, Plaintiff claims that it is entitled to 1.5 billion dollars, “based on Defendant[]'s minimum investment target of at least $7, 000, 000, 000 (Seven Billion USD) and its related returns and profit projections.” Id. at 11.

In support of its Motion, Plaintiff submitted the affidavits of Juan Fernandez Muñoz Mora, Beatriz Yovanna Valdivieso Orozco, and Franco Romero Rentería. Id. at 14, 20, 26. Mr. Muñoz, Ms. Valdivieso, and Mr. Rentería state that they were present and listened to various telephone conversation during which Defendant's representatives discussed the execution of the private trade investment contract at issue. Id. at 14-15, 20-22, 26-27.

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In addition, Plaintiff submitted the affidavit of Sebastian Saviano, Plaintiff's managing member. Id. at 33. Mr. Saviano's affidavit explains how Plaintiff calculated the damages sought. Id. at 33-34. Specifically, Mr. Saviano states that Plaintiff introduced Defendant to an investment program and pursuant to the Agreement between the Parties, Plaintiff was entitled to a five percent commission for the services provided. Id. at 35-36. In this instance, Defendant's “initial investment involved a financial sum of up to GBP 5, 000, 000, 000 (Five Billion British Pound Sterling), or approximately $7, 000, 000, 000 (Seven Billion USD).” Id. at 34. Because Plaintiff's commission is based on profits, Mr. Saviano calculates Defendant's expected profits as follows:

The investment program which [Plaintiff] introduced to [Defendant] had a high-yield trading round of seventy-five (75) days, with a projected profit of twenty (20) percent daily, yielding a total profit of fifteen hundred (1, 500%) percent over the seventy-five (75) days. A fifteen hundred (1, 500%) percent profit on the initially allocated investment funds of 5 Billion USD yields a projected total gross return of seventy-five billion ($75, 000, 000, 000) USD

The private investment asset manager, or program manager keeps twenty (20%) percent of the gross profits.

In this case, fifteen billion ($15, 000, 000, 000) USD would be deducted from the total profit of seventy-five billion dollars (USD). [Defendant] would retain a net profit of sixty billion ($60, 000, 000, 000) USD.

The one and half billion (1, 500, 000, 000) USD claim advanced by [Plaintiff] is based on two and half (2.5%) percent of the projected conservative net profits of sixty billion ($60, 000, 000, 000) USD as computed above.

[Plaintiff]'s consulting fee agreement with [Defendant] involved a total fee of five (5%) percent. Of this five (5%) percent fee, only two and half (2.5%) percent goes to [Plaintiff], the remaining two and half (2.5%) percent belong to third parties in Colombia.

Id. at 35-36 (internal numeration omitted).

At hearing on this matter, Plaintiff's counsel stated that it was prepared to introduce Mr. Saviano's testimony to affirm the claims he made in his affidavit. Plaintiff's counsel stated that Mr. Saviano does not have access to the subject trading sheets and that his calculation of damages

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is solely based on the amount he believes he is owed. Plaintiff's counsel noted that because Plaintiff does not have access to any of the pertinent trading documents, it would need to conduct discovery in England and Colombia in order to ascertain the exact amount Defendant invested. As such, based on Plaintiff's uncertainty as to the amounts actually invested by Defendant, Plaintiff ultimately sought leave to conduct discovery in support of the damages requested.

Finally, although Defendant did not file a response to the instant Motion, on July 14, 2021, Defendant filed a pro se Motion to Dismiss Complaint. ECF No. [14].

II. ANALYSIS

As a preliminary matter, Defendant, a corporation, filed a pro se Motion to Dismiss on July 14, 2021. ECF No. [14]. As previously set forth, it is well-established that that “a corporation is an artificial entity that can act only through agents, cannot appear pro se, and must be represented by counsel.” Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. 1985) (citations omitted). Indeed, the District Court's Order on Default Final Judgment Procedure noted that “any pleadings or documents filed by the corporate Defendant must be filed through counsel.” ECF No. [11] at 1 n.1. Because Defendant did not file a proper response to the Complaint or a motion to set aside the Clerk's Default, “default final judgment may be entered.” Id. at 1. As such, the Court turns to Plaintiff's Motion for Default Final Judgment, ECF No. [13].

a. Legal Standards

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...