Worldwide Distribs. v. Maven Med, Inc.
| Docket Number | 22-23635-CIV-SCOLA/GOODMAN |
| Decision Date | 15 June 2023 |
| Parties | WORLDWIDE DISTRIBUTORS, INC., Plaintiff, v. MAVEN MED, INC., Defendant. |
| Court | U.S. District Court — Southern District of Florida |
REPORT AND RECOMMENDATIONS ON PLAINTIFF'S AMENDED MOTION FOR DEFAULT FINAL JUDGMENT
Worldwide Distributors, Inc. (“Worldwide Distributors” or “Plaintiff”) filed the instant action against Maven Med, Inc. (“Maven Med” “MAVEN”, or “Defendant”), seeking a default judgment in its favor in the amount of $656,250.00. [ECF No. 1]. The Complaint alleges three causes of action -- breach of contract, conversion, and unjust enrichment -- stemming from Plaintiff's purchase of 37,500 COVID test kits which Defendant failed to deliver. Id. Defendant did not respond to the Complaint and Plaintiff moved for and obtained a clerk's default. [ECF Nos 12-13]. Plaintiff filed a motion for default judgment and later an amended motion for default judgment. [ECF Nos. 14; 18].[1] United States District Judge Robert N. Scola, Jr. referred Plaintiff's motions to the Undersigned “for a report and recommendations, consistent with 28 U.S.C. § 636(b)(1)(B), Federal Rule of Civil Procedure 72, and Rule 1(d) of the Local Magistrate Judge Rules.” [ECF Nos. 15; 20].
The Undersigned held an evidentiary hearing. [ECF No. 23]. Plaintiff presented the testimony of its vice president, Ariel Rodriguez, and the Court admitted into evidence Plaintiff's Exhibits 1-21. [ECF No. 24]. Maven Med did not respond to Plaintiff's motion or amended motion, attend the evidentiary hearing, or otherwise participate in this case.
In a pre-hearing Order [ECF No. 22], the Undersigned identified certain topics for Plaintiff to address in court. The Undersigned also issued a Post-Evidentiary Hearing Administrative Order and a Paperless Order requiring supplemental briefing. [ECF Nos. 25; 29]. The Orders expanded on some of the pre-hearing topics and added new topics (i.e., waiver of service by an attorney, standing, etc.) which arose during the evidentiary hearing. Id. On May 18, 2023, Plaintiff filed its memorandum of law in response to the Court's Orders. [ECF No. 30].
For the reasons discussed below, the Undersigned respectfully recommends that the District Court deny Plaintiff's Amended Motion for Default Judgment [ECF No. 18], dismiss without prejudice the Complaint [ECF No. 1], and provide Plaintiff with an opportunity to file (if possible) an amended complaint which comports with the Federal Rules of Civil Procedure, Florida's long-arm statute, and due process.
Federal Rule of Civil Procedure 55(a) states that “[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.” A party may then apply to the district court for a default final judgment. Fed.R.Civ.P. 55(b)(2); Alfa Corp. v. Alfa Mortg. Inc., 560 F.Supp.2d 1166, 1173 (M.D. Ala. 2008). “It is the general rule that default judgments are ordinarily disfavored because cases should be decided upon their merits whenever reasonably possible.” Creative Tile Mktg., Inc. v. SICIS Int'l, S.r.L., 922 F.Supp. 1534, 1536 (S.D. Fla. 1996).
A court may not enter a default final judgment based solely on the existence of a clerk's default. “Prior to entering a default judgment, the Court must ensure that it has subject matter jurisdiction over the action and personal jurisdiction over the defendant, the defendant has been properly served, and the complaint adequately states a claim upon which relief may be granted.” Verdejo v. HP Inc., No. 21-20431-CIV, 2021 WL 5933727, at *12 (S.D. Fla. Nov. 8, 2021), appeal dismissed, No. 21-14267-JJ, 2022 WL 758024 (11th Cir. Jan. 20, 2022) (Scola, J.). A court is required to examine the allegations in the complaint to see if they are well-pleaded and present a sufficient basis to support a default judgment on the causes of action. Id. (citing Nishimatsu Constr. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)).[2] Only those factual allegations that are well-pleaded are admitted in a default judgment. Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987).
As noted above, the Undersigned held an evidentiary hearing on Plaintiff's amended default judgment motion. At the hearing, Plaintiff presented testimony from Ariel Rodriguez, Worldwide Distributors' vice president. Mr. Rodriguez is a lighting specialist and consultant. He testified that Worldwide Distributors was incorporated in Florida in 2016. At the start of the COVID-19 pandemic, Mr. Rodriguez and his company transitioned from a lighting company to the business of providing personal protective equipment (i.e., COVID test kits, KN95 masks, hand sanitizers, etc.) to municipalities, hospitals, schools, property management companies, and other entities.
Worldwide Distributors was referred to Maven Med by a Florida corporation, BT Global Enterprises (“BT Global”). BT Global is located in Boca Raton and its principal is Brian Traub.
Worldwide Distributors' first business deal with Maven Med occurred in February 2021, when Plaintiff purchased 6,000 children's masks from Maven Med for the Baltimore County School Board.
Mr. Traub was the broker in the February 2021 transaction and in the transaction that is the subject of the instant action. Mr. Rodriguez testified that Maven Med had done business in South Florida with other companies but did not elaborate on this testimony.
Worldwide Distributors' second business deal with Maven Med is the subject of this lawsuit:
On September 22, 2022, Worldwide Distributors sent a purchase order (P.O. No. 4830) to Maven Med requesting 37,500 Abbot Binax COVID test kits. [ECF No. 28-2, p. 1]. The purchase order reflected a purchase price of $656,250.00 and $2,900 for the shipping charge. It also included the following note: “All 37,500 kits must reflect expiration date of September 2023.” Id. (capitalization omitted).
Maven Med sent an invoice to Worldwide Distributors. Id. at 2. The invoice was for 37,500 Abbot Binax COVID test kits. Id. The total cost of the kits was $656,250.00. There was also an additional $2,900 charge for “logistics from N.J. to Baltimore.” Id. (capitalization omitted).
Mr. Rodriguez testified that Worldwide Distributors did not pay the shipping charge listed in both the purchase order and the invoice because it had made its own arrangements for a truck to pick up the kits from a warehouse in New Jersey. The test kits would then be transported to Baltimore County's property management office in Maryland.
On October 5, 2022, Worldwide Distributors sent a wire transfer from its Florida bank to Maven Med's bank in California in the amount of $656,250.00. Id. at 3. Although the money came from Worldwide Distributors' bank account, Mr. Rodriguez testified that Baltimore County contributed approximately $384,375.00 of the $656,250.00 sent to Maven Med.
He also testified that Worldwide Distributors kept Baltimore County apprised of this lawsuit. Mr. Rodriguez told the Court that “Robert” had a “communication” with Baltimore County and that Worldwide Distributors would give Baltimore County its money first. At the hearing, Robert A. Rosenblatt, Worldwide Distributors' counsel, told the Court that “we” had assured Baltimore County that if there was a recovery, Baltimore County would be “first in line” to have the money paid back to them.
Mr. Rodriguez testified that Maven Med received the $656,250.00 and, at some point, Maven Med sent the funds to a Miami attorney, Umberto Bonavita, to facilitate the purchase of the test kits from a vendor. But after several unsuccessful attempts to obtain the test kits, Mr. Bonavita wire transferred the money back to Maven Med.[3] Thus, the $656,250.00 went from Plaintiff's bank account in Florida to Maven Med's bank account in California and then from Maven Med's bank account to the account of a South Florida attorney. After Maven Med failed to secure the test kits from the vendor, the attorney returned the funds to California.
Mr. Rodriguez testified that Maven Med (in California) sent numerous emails and text messages and made telephone calls to Worldwide Distributors (in Florida) concerning the purchase of these test kits.
Most of Maven Med's communications were through Sudha Bharadwaj.[4] Mr. Rodriguez testified that Sudha Bharadwaj was listed (in the emails) as Maven Med's Strategic Advisor but that he believed she was the wife of the president of Maven Med (Pramanik Bharadwaj). Mr. Rodriguez also testified that his research indicated that Sudha Bharadwaj was the CEO, that Pramanik Bharadwaj was the registered agent, and that Maven Med operated out of the Bharadwajs' family home in Anaheim, California.
On Thursday, October 6, 2022, Sudha Bharadwaj sent an email advising Worldwide Distributors that the test kits would be available for pick up no later than Monday, October 10, 2022. Id. at 15. On Monday, October 10, 2022, Worldwide Distributors received an email from the trucking company notifying it that the warehouse was closed for Yom Kippur.[5]
On Wednesday, October 12, 2022, Sudha Bharadwaj sent an email to Worldwide Distributors confirming that the test kits would be ready for pick up that day in New Jersey. Id. at 22. Mr. Rodriguez testified that Maven Med never made the test kits available for pick up as promised.
At approximately 10:00 PM on October 12, 2022, Sudha Bharadwaj sent an email to Worldwide Distributors which included an email forward from a person named “Brandon.” Id. at 27. Mr. Rodriguez testified that Brandon was Maven Med's vendor who was to...
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