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Complete Entertainment Resources, LLC v. Bianchi

United States District Court, D. Colorado

February 2, 2016

COMPLETE ENTERTAINMENT RESOURCES, LLC, a Delaware Limited Liability Company d/b/a CrowdSurge, Plaintiff,
v.
JAY BIANCHI, a resident of Colorado, LITTLE PRINCE, LLC, a Colorado Limited Liability Company, and DOES 1-10, Defendants.

REPORT AND RECOMMENDATION ON THE APPLICATION BY PLAINTIFF COMPLETE ENTERTAINMENT RESOURCES, LLC DBA CROWDSURGE FOR DEFAULT JUDGMENT AGAINST DEFENDANTS JAY BIANCHI AND LITTLE PRINCE, LLC (Docket No. 18)

MICHAEL J. WATANABE, Magistrate Judge.

Plaintiff moves for default judgment against Defendants Jay Bianchi ("Bianchi") and Little Prince, LLC ("Little Prince")[1], and the motion has been referred to the undersigned. (Docket Nos. 18 & 19.) No response has been filed by either defendant. The Court has reviewed the motion and its attached exhibits, taken judicial notice of the Court's file in this case, and reviewed the applicable Federal Rules of Civil Procedure, case law, and statutes. Now being fully informed, the Court makes the following findings, conclusions, and recommendation that the motion be granted in part and denied in part.

Factual Background

Plaintiff filed its complaint on December 15, 2014. (Docket No. 1.) In it Plaintiff asserts three claims for relief against all Defendants: breach of contract, unjust enrichment, and violation of the Colorado Consumer Protection Act ("CCPA"), Colo. Rev. Stat. §§ 6-1-101, et seq. ( Id. at 6-9.) In short, Plaintiff alleges that Defendants owe Plaintiff approximately $80, 000.00 relating to costs incurred as a result of the need to refund tickets to a musical performance that was organized by Defendants. ( Id. at 4-6.) Plaintiff maintains that Defendants Bianchi and Little Prince "had not actually taken the steps necessary to secure the necessary permits required to actually hold the" originally scheduled outdoor event, which resulted in Plaintiff incurring "actual out of pocket losses... estimated to exceed $80, 000.00." ( Id. at 5-6.) Plaintiff seeks compensatory damages, restitution[2], injunctive relief, attorney's fees, interest, and costs. ( Id. at 10.). On January 14, 2015, Plaintiff filed proof that Defendants Bianchi and Little Prince had been personally served in compliance with Federal Rule of Civil Procedure 4. (Docket Nos. 8 & 9.) No imperfections or irregularities appear on the face of the proof of service. ( See id. ) Following Plaintiff's motion for default judgment, the Clerk of the Court entered default under Rule 55(a) as to these two Defendants. (Docket No. 12.)

Discussion

Rule 55(b)(2) provides the authority for the District Court to enter default judgment. After an entry of default, a defendant cannot defend a claim on the merits. See Olcott v. Delaware Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003) ("[D]efendant, by his default, admits the plaintiff's well-pleaded allegations of fact....") (quoting Jackson v. FIE Corp., 302 F.3d 515, 525 (5th Cir. 2002) (modification in Olcott )). Even after entry of default, however, it remains for the Court to consider whether the unchallenged facts constitute a legitimate basis for the entry of a judgment. See McCabe v. Campos, No. 05-cv-00846-RPM, 2008 WL 576245, at *2 (D. Colo. Feb. 28, 2008) (citing Black v. Lane, 22 F.3d 1395, 1407 (7th Cir. 1994)). "[A] party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the sound judicial discretion' of the court." Cablevision of Southern Conn., Ltd. P'ship v. Smith, 141 F.Supp.2d 277, 281 (D. Conn. 2001). In determining whether a claim for relief has been established, the well-pleaded facts of the complaint relating to liability are deemed true. Id. In addition, the Court accepts the undisputed facts set forth in any affidavits and exhibits. Deery Am. Corp. v. Artco Equip. Sales, Inc., No. 06-cv-01684-EWN-CBS, 2007 WL 437762, at *3 (D. Colo. Feb. 6, 2007).

I. Liability

The allegations in the Complaint, taken to be true for purposes of default judgment, establish the Court's jurisdiction over the lawsuit and the parties. Defendant Bianchi is alleged to be a resident of the state of Colorado and Defendant Prince Little is alleged to be a Colorado limited liability company with its principal place of business in Denver, Colorado. (Docket No. 1, p. 2). Plaintiff is a limited liability company formed under the laws of Delaware with its principal place of business in New York. ( Id. at 1-2.) Further, Plaintiff seeks damages totaling at least $80, 000.[3] The Court therefore has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Further, because Defendant Bianchi is alleged to be a resident of Colorado and Defendant Prince Little is alleged to be a Colorado limited liability company and service on them was valid and effective (by personal in-hand service upon Defendant Bianchi who is the registered agent for Defendant Prince Little), the Court therefore has personal jurisdiction over them. For these same reasons, the Court finds that venue is proper in the State and District of Colorado under 28 U.S.C. § 1391.

A. Breach of Contract

As to the merits of Plaintiff's claim, the Court examines each of the claims for relief. The elements for breach of contract claim under Colorado law are: (1) the existence of a contract; (2) performance by the plaintiff or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff. PayoutOne v. Coral Mortg. Bankers, 602 F.Supp.2d 1219, 1224 (D. Colo. 2009) (citation omitted).[4] Plaintiff alleges in the Complaint that it entered into an agreement with Defendants "which was memorialized in a series of electronic correspondences and wire transfer of funds." (Docket No. 1, p. 6.) Plaintiff further alleges that Defendant "represented to [Plaintiff] that they were promoting the outdoor Disco Biscuits Event, and that if [Plaintiff] sold tickets to the Disco Biscuits' fan base and forwarded those proceeds[] to the defendants that the defendants would send the tickets to [Plaintiff] who could then distribute them to the fans." ( Id. at 6-7.) Plaintiff maintains that it performed its obligations under the contract, but that Defendants breached the contract by failing to return the funds collected by Plaintiff when the outdoor event was cancelled. ( Id. at 7.) In support of the instant motion, Plaintiff provides the Declaration of Jesse Bellin in Support of Request for Default Judgment Against Defendants Jay Bianchi and Little Prince, LLC (Docket No. 18-1), which attaches various email communications relating to Plaintiff's sale of tickets for the musical event.

Whether the parties have entered into a contract is a question of fact. See Southern Colo. MRI, Ltd. v. Med-Alliance, Inc., 166 F.3d 1094, 1098 (10th Cir. 1999) (citing I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882, 887 (Colo. 1986)); see also Buckles Mgmt., LLC v. InvestorDigs, LLC, 728 F.Supp.2d 1145, 1150 (D. Colo. 2010); Ellis Canning Co. v. Bernstein, 348 F.Supp. 1212, 1221 (D. Colo. 1972) (citing Marti-Matter Co. v. Thomas, 70 Colo. 478, 202 P. 703 (1921)) (whether there has been a meeting of the minds is a question of fact to be determined from all of the evidence in the case). As noted, the Court must accept the disputed facts as true for purposes of this motion. Here, it is unclear whether this series of emails constitutes a contract. See Buckles Mgmt., 728 F.Supp.2d at 1152 ("Although the email at issue here is subject to interpretation, whether it is sufficient to evidence a contract is a question of fact that precludes summary judgment."); PayoutOne, 602 F.Supp.2d at 1225-26 (analyzing whether emails may constitute a written agreement for purposes of the statute of frauds). However, because Plaintiff seeks default judgment with regard to each of its claims and, as discussed below, it cannot recover for both its breach of contract and unjust enrichment claims, the Court need not decide whether Plaintiff has sufficiently alleged the existence of a contract in this case because it concludes that Plaintiff has sufficiently alleged an unjust enrichment claim and that judgment should enter with regard to that claim.

B. Unjust Enrichment

Plaintiff's unjust enrichment claim seeks the same remedy it seeks for its breach of contract claim: "the value of the payments unjustly retained" by Defendants. (Docket No. 1, p. 8.) "Unjust enrichment is a claim in quasi-contract based on principles of restitution." W. Ridge Grp., LLC v. First Trust Co. of Onaga, 414 Fed.App'x 112, 120 (10th Cir. 2011) (unpublished) (applying Colorado law). "In general, a party cannot recover for unjust enrichment by asserting a quasi-contract when an express contract covers the same subject matter because the express contract precludes any implied-in-law contract." Interbank Investments, LLC v. Eagle River Water & Sanitation Dist., 77 P.3d 814, 816 (Colo.App. 2003). Colorado courts recognize two exceptions to this general rule. "First, a party can recover on a quasi-contract when the implied-in-law contract covers conduct outside the express contract or matters arising subsequent to the express contract. Second, a party can recover on a quasi-contract when the party will have no right under an enforceable contract, " such as "when an express contract failed or was rescinded." Id. (citations and quotations omitted). Here, because the Court does not decide whether the emails exchanged between Plaintiff and Defendants constitute a contract, the Court considers Plaintiff's unjust enrichment claim.[5]

"[A] party claiming unjust enrichment must prove that (1) the defendant received a benefit (2) at the plaintiff's expense (3) under circumstances that would make it unjust for the defendant to retain the benefit without commensurate compensation." Lewis v. Lewis, 189 P.3d 1134, 1141 (Colo. 2008), as modified on denial of reh'g (Colo. Aug. 18, 2008) (citations omitted). In the instant case, Plaintiff alleges that it sent money to Defendants for the tickets it sold to the musical event. (Docket No. 1, p. 4). Specifically, Plaintiff maintains that it "[i]n conjunction with [its sale of tickets Plaintiff] collected funds from the Disco Biscuits' fan base in excess of $80, 000.00, which represented the full face value for the tickets [Plaintiff] actually sold." ( Id. ) Plaintiff further alleges that in August 2014 it sent Defendants "in excess of $80, 000.00" and, in return, received the tickets to distribute to the purchasers. ( Id. ) Plaintiff avers that as a result of the musical event being moved to another venue, it was forced to either refund the cost of the tickets to purchasers or to buy tickets for the new venue at its own cost for its purchasers and that it "incurred actual out of pocket losses... estimated to exceed ...


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