United States District Court, D. Colorado
REPORT AND RECOMMENDATION ON ENTRY OF DEFAULT
JUDGMENT AND PLAINTIFF'S REQUEST FOR DAMAGES (DKT.
#219)
N.
Reid Neureiter, United States Magistrate Judge.
This
case is before the Court pursuant to Orders (Dkt. ##217, 220)
issued by Judge William J. Martinez referring this matter for
recommendation on the scope and content of the default
judgment to be entered against Defendants Larry D. Sims,
Jeffrey Sims, LDS Financial Charter Services Co.
("LDS"), and Blactino Entertainment
("Blactino") (collectively "Defendants"),
as well as on Plaintiff Dr. Richard Max Fleming's Request
for Damages. (Dkt. #219.) The Court has carefully considered
the motion (Dkt. #219) and supporting exhibits. (Dkt. ##224,
226, & 228.) The Court heard argument on the entry of
default judgment on September 26, 2018. (Dkt. #233.) The
Court has taken judicial notice of the Court's file and
has considered the applicable Federal Rules of Civil
Procedure and case law. The Court, now being fully informed,
makes the following recommendation.
I.
BACKGROUND
a.
Procedural History
The
procedural history of this case is not easily summarized, but
a brief recitation of events will be helpful. On July 27,
2017, Dr. Fleming, proceeding pro se, filed suit against
several defendants for breach of contract, promissory
estoppel, fraud, and assault. (Dkt. #1.) After being ordered
to cure certain pleading deficiencies (Dkt. #5), Dr. Fleming
filed an Amended Complaint (Dkt. #26) that alleged that the
defendants guaranteed him a grant of $250, 000 for the
licensing and promotion of a patent associated with breast
cancer and heart disease research, and agreed to make a $3,
800 rent payment for him, but failed to make either payment.
(Dkt. #26 at 3-5.) An avalanche of filings ensued, including
at least 15 motions by Dr. Fleming for entry of default,
default judgment, and related relief. (Dkt. ##66, 67, 70, 72,
78-80, 82, 84, 89, 92, 94 and 115.) He was eventually given
leave to file a Second Amended Complaint (Dkt. #144), which
he did on January 25, 2018. (Dkt. # 146.) The Second Amended
Complaint asserted claims against Defendants Blactino, LDS,
and Larry and Jeffery Sims.
Judge
Watanabe held a Scheduling Conference on May 3, 2018, at
which Defendants were given until June 4, 2018 to answer the
Second Amended Complaint and to retain counsel for the
corporate defendants, Blactino and LDS. (Dkt. #191.) An Order
to Show Cause was entered, and a Show Cause Hearing and
Status Conference was set for June 11, 2018. (Dkt. #193.)
Defendants were ordered to show cause why default judgment
should not enter against them pursuant to Rule 55 for their
failure to answer or otherwise respond to Plaintiff's
Second Amended Complaint, and for LDS and Blactino's
failure to retain counsel. (Id.)
Defendants
did not appear on June 11, 2018 for the Show Cause Hearing,
nor did they answer or otherwise respond to Dr. Fleming's
Second Amended Complaint. (Dkt. #202.) Accordingly, that day,
the Court recommended that judgment be entered against
Defendants Larry and Jeffrey Sims, LDS, and Blactino as a
sanction for their failure to comply with the Court's
orders and the federal and local rules of civil procedure.
(Dkt. #203.)
On
August 21, 2018, Judge Martinez adopted Judge Watanabe's
Recommendation in its entirety, and referred the matter to
the undersigned Magistrate Judge, who was assigned the case
after Judge Watanabe's retirement, for a recommendation
as to the scope and content of the default judgment to be
entered against the Defendants. (Dkt. #217.) The Clerk of
Court then entered a Rule 55(a) Default against the
Defendants (Dkt. #218), and Dr. Fleming filed the subject
motion. (Dkt. #219.)
The
Court held a hearing on the entry of default judgment on
September 26, 2018. Dr. Fleming and Larry Sims appeared at
the hearing by telephone, and the Court heard argument and
testimony by both. (Dkt. #233.) The Court took the matter
under advisement. (Id.)
b.
The Allegations of the Second Amended Complaint
Judge
Martinez concisely described the nature of Dr. Fleming's
claims as follows:
In his Complaint, Plaintiff states that "Defendants
contractually guaranteed $250, 000 to Plaintiff for licensing
and promotion of a breast cancer and heart disease patent and
a $3800 rental payment on June 29, 2017 (contractual document
signed and faxed back to LDS on Wednesday 28th) and confirmed
in email to Plaintiff on July 1st." According to
Plaintiff, Defendant Larry Sims presented himself as
"someone who wanted to help people, including members of
the LGBTQ community who could be affected by breast cancer.
Mr. Larry D. Sims stated he wanted to make a difference and
present a positive face for the LGBTQ community and
especially help with the increased risk of African American
women and minorities who might have breast cancer."
Plaintiff provided his banking information to Defendants
because the funds for both the patent and the rent were to be
electronically wired to Plaintiff's account.
Defendant Larry Sims did not make the wire transfer, and
instead "reported that there were power outages, which
set them behind several days." Defendants then posted on
their website that Jeffrey Sims, Larry Sims's brother,
was hospitalized. According to Plaintiff, Jeffrey Sims was
taken to the emergency room on July 7, 2017, but was never
hospitalized. Plaintiff claims to have "sent several
faxes and emails to confirm the guarantee of the
contractually agreed to monies and on each occasion Plaintiff
was assured that the error was on the Defendant's end and
not the Plaintiffs [sic] and that the funds were
guaranteed to come to Plaintiff." According to
Plaintiff, Defendant Larry Sims also repeatedly promised to
submit the rental check directly to Plaintiff's property
manager. On Wednesday, July 12, 2017, Plaintiff and his
property manager both spoke to Larry Sims. Plaintiff claims
that in those phone calls, Larry Sims promised them that
"he was overnighting a check for $3800 for rent payment
including late fees and would send the rest of the $250, 000
electronically the following week, but wanted to make certain
the rent would be taken care of without delay to avoid
eviction of Plaintiff."
When the rent check was not received, Plaintiff's
property manager sent another fax to Larry Sims on July 13,
inquiring about it. According to Plaintiff, Defendant LDS
Financial Charter Services (LDS) sent two faxes in response.
The first guaranteed overnight payment of the rent check if
it had not been sent, again via overnight delivery. The
second fax stated, "Defendants were unhappy with the
property manager wanting the rent payment and not caring
about the Defendants." The second fax also stated that
all agreements were being cancelled because Mr. Larry Sims
had been in a coma for several days (despite the property
manager and Plaintiff having spoken with Mr. Sims by
telephone on the 12th). Plaintiff's property manager was
instructed by Defendants to not inform the Plaintiff of
this." That fax also stated that Defendant Jeffrey Sims
would serve as the acting CEO of LDS while his brother was in
the hospital. Moreover, Plaintiff claims that "pursuant
to the Medical Records departments and the E.R.s of Parkview
and St. Mary Cowin Hospitals Mr. Larry D. Sims was not and
had not been hospitalized for a coma or anything else."
They let Plaintiff know that they were not going to honor the
contract for the grant and the rent payment by e-mail three
day later, on July 16, 2017.
Plaintiff and his son have now been evicted for failure to
pay rent "after detrimentally, reasonably, and
foreseeably relying upon the guaranteed rental payment and
grant." Plaintiff claims that since then, he has had to
"sell his car to make rental payments and pay other
costs of living." Plaintiff notified the Colorado
Attorney General's office, the Pueblo County District
Attorney's office, the FBI, and the website, Ripoff
Report. According to Plaintiff, "Defendants sent a fax
to the rental office threatening Plaintiff for posting the
complaint" on Ripoff Report.
In his Complaint, Plaintiff raises three claims for relief:
(1) Breach of Contract and Promissory Estoppel, (2) Fraud,
and (3) Assault. Defendants failed to answer or otherwise
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