673753 Ont. v. Hdz Logistics
United States District Court for the Middle District of Florida, Orlando Division
December 2, 2020, Decided; December 2, 2020, Filed
Case No: 6:19-cv-506-Orl-40LRH

Reporter
2020 U.S. Dist. LEXIS 230702 *

673753 ONTARIO LIMITED and GOLDEN VISION FLOWER, INC., Plaintiffs, v. HDZ LOGISTICS, LLC, Defendant.

REPORT AND RECOMMENDATION
TO THE UNITED STATES DISTRICT COURT:
This cause came on for consideration without oral argument on the following motion filed herein:
MOTION: RENEWED MOTION FOR FINAL DEFAULT JUDGMENT (Doc. 28)
FILED: May 11, 2020
THEREON it is respectfully RECOMMENDED that the motion be GRANTED.

I. Background
Plaintiff 673753 Ontario Limited d/b/a/ Traffix (“Plaintiff”) is a federally licensed property broker that arranged for Defendant HDZ Logistics LLC (“Defendant”), an authorized motor carrier, to transport orchids from California to Apopka, Florida. (Docs. 11 at ¶¶ 2, 4, 10-11; 11-1). The Defendant accepted the orchids in good order and condition, but while the orchids were in its possession and control they were frozen and ruined. (Id. at ¶¶ 12-13). The actual value of the shipment was $80,640.00 and, as a result of the loss, the Plaintiff was [*2] obligated to pay that amount to the party that was supposed to receive the orchids. (Id. at ¶ 14). The Plaintiff made a timely claim upon the Defendant for the value of the shipment, but the Defendant and its insurance carrier refused to pay the claim. (Id. at ¶¶ 15-16). Therefore, the Plaintiff adjusted the claim and filed this action against the Defendant asserting a single claim under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 et seq, (the “Carmack Amendment”) to recover, among other things, $80,640.00. (Id. at ¶¶ 8-17 (“Complaint”)).
The Defendant’s registered agent was served with process in Texas on April 18, 2019 (Doc. 12-1), but the Defendant did not timely respond to the Complaint. As a result, the Plaintiff moved for default on May 23, 2019 (Doc. 13), and the Clerk entered default against the Defendant on May 28, 2019 (Doc. 14).
On July 9, 2019, the Plaintiff moved for final default judgment. (Doc. 18). I denied that motion because the Plaintiff did not show that the Court had personal jurisdiction over the Defendant, a Texas limited liability company, and because the Plaintiff sought default judgment on a claim for breach of contract that was not asserted in the Complaint. [*3] (Doc. 19). On October 25, 2019, the Plaintiff filed its second motion for final default judgment. (Doc. 20). I denied that motion because the Plaintiff had still not shown that the Court had personal jurisdiction over the Defendant. (Doc. 25). On April 29, 2020, the Plaintiff filed its third motion for final default judgment. (Doc. 26). I denied that motion because the Plaintiff focused on the Court’s personal jurisdiction over the Defendant without addressing the Defendant’s liability under the Carmack Amendment and damages. (Doc. 27).
Apparently the fourth time is the charm. The Plaintiff has filed its fourth motion for final default judgment against the Defendant, arguing that the allegations in the Complaint establish that the Defendant is liable for the damaged orchids under the Carmack Amendment. (Doc. 28 (“Motion”)). The Plaintiff requests an award of $80,640.00 in damages, and no other relief. (Id. at 14-15). In support, the Plaintiff attaches the bill of lading (Doc. 28-1) and an affidavit from its chief executive officer, Lorne Charles Snow, in which he avers, among other things, that the value of the ruined orchids was $80,640.00 (Doc. 28-2).1 The Motion has been referred to me for a [*4] report and recommendation and is now ripe for consideration.2

II. Standard of Review
The Federal Rules of Civil Procedure establish a two-step process for obtaining default judgment. First, when a party against whom a judgment for affirmative relief is sought fails to plead or otherwise defend as provided by the Federal Rules of Civil Procedure, and that fact is made to appear by affidavit or otherwise, the Clerk enters default. Fed. R. Civ. P. 55(a). Second, after obtaining clerk’s default, the plaintiff must move for default judgment. Fed. R. Civ. P. 55(b). Before entering default judgment, the court must ensure that it has jurisdiction over the claims and parties, and that the well-pled factual allegations of the complaint, which are assumed to be true, adequately state a claim for which relief may be granted. See Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).3
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This standard does not require detailed factual allegations, but does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). Thus, the “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on [*5] its face.'” Id. (quoting Twombly, 550 U.S. at 570). To state a plausible claim for relief, a plaintiff must go beyond merely pleading the “sheer possibility” of unlawful activity by a defendant and offer “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). If a plaintiff fails to meet this pleading standard, then the plaintiff will not be entitled to default judgment.
If the plaintiff is entitled to default judgment, then the court must consider whether the plaintiff is entitled to the relief requested. If the plaintiff seeks damages, the plaintiff bears the burden of demonstrating entitlement to recover the amount of damages sought in the motion for default judgment. Wallace v. The Kiwi Grp., Inc., 247 F.R.D. 679, 681 (M.D. Fla. 2008). Unlike well-pled allegations of fact, allegations relating to the amount of damages are not admitted by virtue of default; rather, the court must determine both the amount and character of damages. Id. (citing Miller v. Paradise of Port Richey, Inc., 75 F. Supp. 2d 1342, 1346 (M.D. Fla. 1999)). Therefore, even in the default judgment context, “[a] court has an obligation to assure that there is a legitimate basis for any damage award it enters[.]” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003); see Adolph Coors Co. v. Movement Against Racism and the Klan, 777 F.2d 1538, 1544 (11th Cir. 1985) (explaining that damages may be awarded on default judgment only if the record [*6] adequately reflects a basis for an award of damages). Ordinarily, unless a plaintiff’s claim against a defaulting defendant is for a liquidated sum or one capable of mathematical calculation, the law requires the district court to hold an evidentiary hearing to fix the amount of damages. See Adolph Coors, 777 F.2d at 1543-44. However, no hearing is needed “when the district court already has a wealth of evidence from the party requesting the hearing, such that any additional evidence would be truly unnecessary to a fully informed determination of damages.” See S.E.C. v. Smyth, 420 F.3d 1225, 1232 n.13 (11th Cir. 2005); see also Wallace, 247 F.R.D. at 681 (“a hearing is not necessary if sufficient evidence is submitted to support the request for damages”).

III. Analysis

A. Subject Matter Jurisdiction
The Plaintiff has consistently alleged that the Court has diversity jurisdiction over this matter. (Docs. 1 at ¶ 5; 9 at ¶ 5; 11 at ¶ 5; see also Doc. 28 at 3-4). I find, as I did earlier in this case (Docs. 8; 10), that the Plaintiff has still not adequately alleged the Defendant’s citizenship and, therefore, has not shown that the Court has diversity jurisdiction over this matter.4 I, nevertheless, find that since the Plaintiff asserts a single federal cause of action (Doc. 11 at 2-3) against the Defendant [*7] the Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1331.

B. Personal Jurisdiction
The Court undertakes a two-step inquiry in determining whether it can exercise personal jurisdiction over a nonresident defendant. Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 855 (11th Cir. 1990). First, the Court must determine whether the forum state’s long-arm statute provides a sufficient basis for personal jurisdiction. Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996). Second, if the Court finds that personal jurisdiction exists under the forum state’s long-arm statute, the Court “must determine whether sufficient minimum contacts exist between the defendant[ ] and the forum state so as to satisfy traditional notions of fair play and substantial justice under the Due Process Clause of the Fourteenth Amendment.” Id. (internal quotation omitted). The Plaintiff bears the burden of showing that the Court has personal jurisdiction over the Defendant. United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009).

1. Florida’s Long-Arm Jurisdiction
The Plaintiff contends the Court has specific personal jurisdiction over the Defendant pursuant to Florida Statute § 48.193(1)(a)(7), which extends long-arm jurisdiction over a defendant that “[b]reach[es] a contract in [Florida] by failing to perform acts required by the contract to be performed in [Florida].” (Doc. 28 at 9-10). I agree. The Plaintiff contracted with the Defendant to transport [*8] orchids from California to Apopka, Florida. (Docs. 11 at ¶¶ 10, 12; 11-1). The Defendant accepted the orchids in good order and condition, but while the orchids were in its possession and control they were frozen and ruined. (Doc. 11 at ¶¶ 12-13). The Defendant therefore breached the contract by delivering ruined orchids to Apopka, Florida. These allegations, which must be accepted as true, are sufficient to establish long-arm jurisdiction over the Defendant pursuant to Florida Statute § 48.193(1)(a)(7). See Design-Build Concepts, Inc. v. Jenkins Brick Co., No. 3:06cv558/MCR/MD, 2008 WL 686150, at *5 (N.D. Fla. Mar. 10, 2008) (finding specific jurisdiction under former version of Florida Statute § 48.193(1)(a)(7) – Florida Statute § 48.193(1)(g) (2008) – was appropriate where delivery of the subject product was to be in Florida, in conformity with certain specifications and without defect, and defendant allegedly failed to deliver conforming, non-defective products.); Advanced Bodycare Solutions LLC v. Thione Int’l, Inc., 514 F. Supp. 2d 1326, 1330 (S.D. Fla. 2007) (same).

2. Due Process
The Court applies a three-part test in determining whether exercising specific jurisdiction over a nonresident defendant comports with due process: “(1) whether the plaintiff’s claims arise out of or relate to at least one of the defendant’s contacts with the forum; (2) whether the nonresident defendant purposefully availed himself [*9] of the privilege of conducting activities within the forum state, thus invoking the benefit of the forum state’s laws; and (3) whether the exercise of personal jurisdiction comports with traditional notions of fair play and substantial justice.” Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1355 (11th Cir. 2013) (internal citations and quotation marks omitted). “The plaintiff bears the burden of establishing the first two prongs, and if the plaintiff does so, a defendant must make a compelling case that the exercise of jurisdiction would violate traditional notions of fair play and substantial justice.” Id. (internal citations and quotation marks omitted).
The first part of the due process test requires the plaintiff to show that its claim either arises out of or relates to the defendant’s contacts with the forum. Id. at 1355. This inquiry focuses “on the direct causal relationship between the defendant, the forum, and the litigation.” Id. at 1355-56. Here, the Plaintiff’s allegations and the bill of lading attached to the Complaint show this case arises from the Defendant’s failure to deliver the orchids in good condition to Florida. (Docs. 11 at ¶¶ 10, 12-13; 11-1). The foregoing is sufficient to show a direct causal relationship between the Defendant, Florida, and the Plaintiff’s [*10] claim.
The second part of the due process test requires the plaintiff to show the defendant has sufficient minimum contacts with the forum such that it has purposefully availed itself of the privilege of conducting activities within the forum. Id. at 1355. This test — commonly referred to as the minimum contacts test — requires the Court to “assess the nonresident defendant’s contacts with the forum state and ask whether those contacts: (1) are related to the plaintiff’s cause of action; (2) involve some act by which the defendant purposefully availed himself of the privileges of doing business within the forum; and (3) are such that the defendant should reasonably anticipate being haled into court in the forum.” Id. at 1357 (citation omitted). As discussed in the previous paragraph, the Plaintiff’s claim relates to the Defendant’s contact with Florida. (See supra pp. 7-8). Further, the Defendant purposely availed itself of the privilege of doing business in this forum by agreeing to deliver the orchids to Florida. (Doc. 11-1); see Pepsi-Cola Bottling Co. of Ft. Lauderdale-Palm Beach, Inc. v. Buffalo Rock Co., Inc., 593 F. Supp. 1559, 1564 (N.D. Ala. 1984) (“By . . . negotiat[ing] the terms of its purchase orders and [by performing], in Alabama, its obligations created by those purchase orders, all with the admitted intention of receiving pecuniary [*11] gain from the transaction they were to consummate, [the defendant] purposefully availed itself of the benefits of activities conducted in Alabama[.]”). Also, by failing to deliver the orchids to Florida in good condition, the Defendant should have reasonably anticipated that it would be sued in Florida. See id. In light of the foregoing, the Plaintiff has shown that the Defendant has sufficient minimum contacts with the forum such that it has purposefully availed itself of the privilege of conducting business in Florida.
Having satisfied the first two prongs, the burden now shifts to the Defendant to present a “compelling case” that exercising jurisdiction over it would violate traditional notions of fair play and substantial justice. Louis Vuitton Malletier, 736 F.3d at 1355. Since the Defendant has defaulted, it has made no such showing. The Court must nevertheless consider whether exercising jurisdiction over the Defendant would violate traditional notions of fair play and substantial justice. In doing so, the Court must consider: 1) the burden on the defendant; 2) the forum state’s interest in adjudicating the dispute; 3) the plaintiff’s interest in obtaining convenient and effective relief; 4) the interstate judicial [*12] system’s interest in obtaining the most efficient resolution of controversies; and 5) the shared interest of the several states in furthering fundamental substantive social policies. Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1251 (11th Cir. 2000) (citing Burger King v. Rudzewicz, 471 U.S. 462, 466, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985)).
The record shows that the Defendant is a Texas limited liability company and, therefore, there is a likelihood that the Defendant would experience some burden litigating the case in Florida. However, the Court can only speculate as to the degree of burden that would be placed on the Defendant, given the Defendant’s failure to appear and, in turn, failure to provide any evidence on this point. Moreover, the Defendant has done business in Florida, failed to deliver the orchids in good condition in Florida, and Florida has a strong interest in this proceeding since the ruined orchids were destined to be delivered in Florida. (Doc. 11-1). Finally, there is nothing in the record to suggest that proceeding in Florida would be less efficient than if the case was to proceed in the Defendant’s’ home forum, Texas, and this Court has an interest in resolving disputes involving business conducted in Florida. For these reasons, I find that exercising jurisdiction over the Defendant would not violate traditional [*13] notions of fair play and substantial justice.
In light of the foregoing, I find the Court may exercise personal jurisdiction over the Defendant.5

C. Clerk’s Default
The Plaintiff served the Defendant’s registered agent, John C. Sims, with process on April 18, 2019. (Doc. 12-1). This was proper service. Fla. Stat. § 48.062(1). The Defendant thus had 21 days from the date of service, i.e., until May 9, 2019, to respond to the Complaint. Fed. R. Civ. P. 12(a)(1)(A)(i). The Defendant has neither appeared nor responded to the Complaint, therefore the Clerk properly entered default against the Defendant. (Docs. 13; 14).

D. Liability
The Plaintiff asserts a single claim against the Defendant under the Carmack Amendment, which “makes common carriers liable for actual loss of or damage to shipments in interstate commerce.” A.I.G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir. 2003). “To establish a prima facie case of liability, plaintiff must show that the goods were delivered to defendant in good condition, that the good[s] arrived in damaged condition, and that this resulted in a specific amount of damage.” Scotlynn USA Division, Inc. v. Singh, No. 2:15-cv-381-FtM-29MRM, 2016 U.S. Dist. LEXIS 121952, 2016 WL 4734396, at *2 (M.D. Fla. Sept. 9, 2016) (citing Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1014 (11th Cir. 1987)).6
The bill of lading attached to the Complaint establishes that the Plaintiff arranged for the Defendant to transport [*14] orchids from California to Florida. (Doc. 11-1). The Plaintiff alleges that the Defendant accepted the orchids in good condition and, while in the Defendant’s possession, the orchids were frozen and ruined, resulting in a total loss of $80,640.00. (Doc. 11 at ¶¶ 10-14; see Doc. 28-2 at ¶¶ 4-8). These allegations and the evidence attached to the Complaint, which must be accepted as true, are sufficient to establish that the Defendant is liable for the loss of the orchids under the Carmack Amendment.

E. Damages
The Plaintiff seeks to recover the actual value of the ruined orchids. A carrier of property in interstate commerce is liable for the “actual loss or injury to the property caused by” the carrier. 49 U.S.C. § 14706(a)(1). The Plaintiff has presented uncontroverted evidence from its CEO, Mr. Snow, that the value of the ruined orchids was $80,640.00. (Doc. 28-2 at ¶ 8). This is a sum certain and, therefore, there is no need to conduct a hearing to determine the Plaintiff’s damages. See Wallace, 247 F.R.D. at 681. I find Mr. Snow’s affidavit is sufficient to establish the Plaintiff’s actual loss and, therefore, find the Plaintiff should recover a total of $80,640.00 in damages from the Defendant.

IV. Conclusion
Accordingly, it is respectfully [*15] RECOMMENDED that:
1. The Motion (Doc. 28) be GRANTED;
2. The Court enter judgment in favor of the Plaintiff and against the Defendant in the total amount of $80,640.00.
3. The Clerk be directed to close the case.

NOTICE TO PARTIES
A party has fourteen days from this date to file written objections to the Report and Recommendation’s factual findings and legal conclusions. A party’s failure to file written objections waives that party’s right to challenge on appeal any unobjected-to factual finding or legal conclusion the district judge adopts from the Report and Recommendation. See 11th Cir. R. 3-1.
Recommended in Orlando, Florida on December 2, 2020.
/s/ Leslie R. Hoffman
LESLIE R. HOFFMAN
UNITED STATES MAGISTRATE JUDGE