United States District Court, D. Colorado
HEADWATERS BD, LLC, a Delaware limited liability company, Plaintiff,
LFG PARTICIPACOES SOCIETARIAS LTDA, a/k/a LFG PARTICIPACOES SOCIETARIAS EIRELI, a Brazilian limited liability company, Defendant.
REPORT AND RECOMMENDATION ON PLAINTIFF HEADWATERS BD,
LLC'S MOTION FOR DEFAULT JUDGMENT UNDER RULE 55(B)(2) OF
THE FEDERAL RULES OF CIVIL PROCEDURE (DKT. #39)
matter is before the Court on Plaintiff Headwaters BD,
LLC's (“Headwaters”) Motion for Default
Judgment Under Rule 55(b)(2) of the Federal Rules of Civil
Procedure against Defendant LFG Participacoes Societarias
LTDA a/k/a LFG Participacoes Societarias EIRELLI
(“LFG”). [Dkt. #39]. Headwaters has moved for
entry of judgment by default against LFG, alleging that it
breached the June 1, 2015 contract between the parties, and
ordering damages with statutory interest. In support of its
motion, Headwaters submitted the Declaration of Philip W.
Seefried, Jr. [Dkt. #39-2] which supports Headwaters'
damages calculations. LFG has not appeared and has not
responded to the instant motion. The Court held a hearing on
this matter on February 6, 2019 at 1:30 p.m. [See
Dkt. #42.] During the hearing, the Court heard the testimony
of Philip Seefried, received documentary evidence, and heard
argument of counsel for the Plaintiff.
Court has reviewed all the adjudicative facts and considered
the evidence presented at the February 6, 2019 hearing, and
in all forms in Headwaters' motion, including the Amended
Complaint [Dkt. #14], and the declaration and exhibits
submitted with the motion. [Dkt. ##39-1-39-6.] Based on this
evidence, the Court enters this Recommended Disposition
pursuant to Fed.R.Civ.P. 72(b)(1).
considered the record as a whole, the Court recommends the
following findings of fact and conclusions of law:
August 30, 2017, Headwaters filed its Complaint, and
subsequently filed its Amended Complaint
(“Compl.”) on November 14, 2017. [Dkt. #14]. The
Summons was issued on November 15, 2017. [Dkt. #16].
late November 2017, Headwaters initiated the process to serve
LFG, a Brazilian entity, pursuant to the Inter-American
Convention on Letters Rogatory (“the
Convention”), which is the applicable service
convention between the United States and Brazil. The required
Court-executed forms for service of process under the
Convention were issued by the Court on November 27, 2017.
November 1, 2018, Headwaters filed its Notice of Completed
Service of Process Under the Inter-American Service
Convention on Letters Rogatory (the “Notice”).
set forth in the Notice, Defendant LFG was served with the
Summons and Amended Complaint under the Convention on March
13, 2018, and the Ministry of Justice in Brazil transmitted
the completed proof of service package to the Department of
Justice's agent in the United States on September 11,
2018. [Dkt. #36].
has failed to file an answer and it has not otherwise entered
an appearance in this action.
November 19, 2018, the Clerk of the Court properly entered
default against LFG. [Dkt. #38].
Therefore, LFG is in default. Fed.R.Civ.P. 12(a)(1)(A)(i).
Upon entry of default, the well-pleaded allegations of the
Amended Complaint related to liability are taken as true.
See e.g., Olcott v. Del. Flood Co., 327
F.3d 1115, 1125 (10th Cir. 2003) (“defendant, by his
default, admits the plaintiff's well-pleaded allegations
of fact”); see also Au Bon Pain Corp. v. Artect,
Inc., 653 F.2d 61, 65 (2d Cir. 1981) (holding that
district court erred by not accepting as true all factual
allegations of complaint except those relating to damages);
United States v. Di Mucci, 879 F.2d 1488, 1497 (7th
Cir. 1989) (noting that on default, well-pleaded allegations
of complaint relating to liability are taken as true,
although allegations relating to amount of damages are not);
Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th
Cir. 1977) (noting that the general rule is that default by
defendants established their liability, but not extent of
Court has subject matter jurisdiction over this matter under
28 U.S.C. § 1332 because the matter involves an action
between a U.S. plaintiff and a foreign defendant and the
amount in controversy exceeds $75, 000. [Compl. ¶ 3; 28
U.S.C. § 1332]. Under the terms of the contract at
issue, LFG explicitly consented to personal jurisdiction and
venue in the District of Colorado for disputes arising out of
the contract. [Compl. ¶ 5]. The contract is to be
interpreted under Delaware law and the parties waived trial
by jury. [Compl. ¶ 6].
Under Delaware law, to prevail on a breach of contract claim,
a plaintiff must demonstrate (i) the existence of the
contract, whether express or implied, (ii) the breach of an
obligation imposed by that contract; and (iii) the resulting
damages. VLIW Tech., LLC v. Hewlett-Packard Co., 840
A.2d 606, 612 (Del. 2003).
June 1, 2015, LFG and Headwaters entered into a valid
contract. [Compl. ¶ 9, 10; Dkt. #42-2]. Under the terms
of the contract, Headwaters was to provide investment banking
services to LFG and its affiliates and subsidiaries, and to
act as LFG's exclusive financial adviser. [Compl. ¶
part of its services under the contract, Headwaters was asked
by LFG to locate potential investors who were willing to
purchase Altus Sistemas de Automacao S.A.