US Foods, Inc. v. EBA Trust, Inc. et al

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
US Foods, Inc.
v. 	Civil No. 17-cv-326-LM
EBA Trust, Inc. D/B/A
Everything But Anchovies
and Maureen D. Bogosian
REPORT AND RECOMMENDATION
US Foods, Inc. (“US Foods”) brought suit against EBA Trust,
Inc. d/b/a Everything But Anchovies (“EBA”) and Maureen Bogosian
seeking to recover money for goods and services it provided to
EBA under the terms of an agreement. 	On September 6, 2017, the
Clerk of Court entered default against the defendants. 	Before
the court for a Report and Recommendation is US Foods’ motion
for default judgment pursuant to Federal Rule of Civil Procedure
55(b)(2).1 	For the reasons that follow, the court recommends
1 US Foods moved for default judgment under Federal Rule of
Civil Procedure 55(b)(1), arguing that the Clerk of Court should
enter default judgment in its favor because the amount it seeks
under the parties’ agreement represents a sum certain. 	Even
though amounts owed under the parties’ agreement could be
considered a sum certain under Rule 55(b)(1), US Foods’ request
for attorneys’ fees “prevents the clerk from entering a judgment
under Rule 55(b)(1), since the reasonableness of the
attorney[s’] fees necessitates a judgment call by the Court.”
Int’l Union of Operating Engineers, Local 4 v. Stanley
Excavation, 243 F.R.D. 25, 27 (D. Me. 2007) (internal quotation
marks and citation omitted). 	“If the plaintiff is seeking both
a sum certain, which would fall under Rule 55(b)(1), and damages
that require judicial determination under Rule 55(b)(2), the
entire matter, including the sum certain, must be determined
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that the district judge grant the motion in part and deny it in
part.
Standard of Review
After default is entered and when the amount at issue is
not a sum certain, “the party must apply to the court for a
default judgment.” 	Fed. R. Civ. P. 55(b)(2); see also KPS &
Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 19 (1st Cir.
2003). 	Before entering a default judgment, the court “may
examine a plaintiff’s complaint, taking all well-pleaded factual
allegations as true, to determine whether it alleges a cause of
action.” 	Ramos-Falcon v. Autoridad de Energia Electrica, 301
F.3d 1, 2 (1st Cir. 2002) (quoting Guirindongo Pacheco v. Rolon
Morales, 953 F.2d 15, 16 (1st Cir. 1992)). 	The defaulted party
is “taken to have conceded the truth of the factual allegations
in the complaint . . . .” 	Ortiz-Gonzalez v. Fonovisa, 227 F.3d
59, 62-63 (1st Cir. 2002) (internal quotation marks and citation
omitted). 	The defaulted party does not, however, “admit the
legal sufficiency of those claims.” 	10 James Wm. Moore, Moore’s
Federal Practice § 55.32[1][b] (3d ed. 2013). 	Therefore, before
under Rule 55(b)(2).” 	Id. (citing Conetta v. Nat’l Hair Care
Ctrs., Inc., 186 F.R.D. 262, 268 (D.R.I. 1999) (“A case is
either for a ‘sum certain’ or not. 	A party must choose one of
the two procedures offered by Fed. R. Civ. P. 55(b) . . . .”),
aff’d, 236 F.3d 67 (1st Cir. 2001)).
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entering default judgment, the court must determine whether the
admitted facts state actionable claims. 	See Hop Hing Produces
Inc. v. X & L Supermarket, Inc., No. 12-cv-1401-AFF-MDG, 2013 WL
1232919, at *2 (E.D.N.Y. Mar. 4, 2013); E. Armata, Inc. v. 27
Farmers Market, Inc., No. 08-cv-5212-KSH, 2009 WL 2386074, at *2
(D.N.J. July 31, 2009).
Background
By virtue of its default, the defendants concede the
following facts alleged in the complaint: US Foods, a Delaware
Corporation with its principal place of business in Illinois, is
a food service distributor to various restaurants, healthcare
and hospitality facilities, government operations, and
educational institutions. 	On or about July 19, 2012, US Foods
entered into a Customer Account Application and Agreement (the
“Credit Agreement”) with EBA, a limited liability company from
New Hampshire, to supply it with various food-related products
and services in return for payment for such products and
services.2 	In addition, Maureen Bogosian, a Vermont resident,
2 Neither the complaint, nor any of the evidence US Foods
submitted in support of its motion for default judgment,
specifies the exact products and services US Foods provided to
EBA under the Credit Agreement.
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signed the Credit Agreement as guarantor of EBA’s obligations
under the Agreement. 	See doc. no. 1-1 at 3.
Pursuant to the Credit Agreement, US Foods provided goods
and services to EBA. 	Despite invoicing EBA for its goods and
services, US Foods did not receive payment. 	When EBA failed to
pay, Bogosian, as guarantor, was required to satisfy EBA’s debt.
She failed to do so.
Discussion
US Foods brings four claims against EBA and one claim
against Bogosian: (1) Breach of contract against EBA (Count I);
(2) Breach of contract against Bogosian (Count II); (3)
“Statement on Account” against EBA (Count III); (4) ”Goods Sold”
against EBA (Count IV); and (5) Unjust Enrichment against EBA
(Count V).3 	US Foods seeks $137,604.32 in damages for the
outstanding amount owed to it by the defendants under the Credit
Agreement, plus an additional award of $12,384.39 in interest,
which it asserts represents a rate of 1.5% per month from May
2017 through October 30, 2017, the date US Foods filed its
motion for default judgment. 	US Foods also seeks an award of
$11,291.14 in attorneys’ fees and costs, as well as interest
3 In its complaint, US Foods asserts Counts III-V against
EBA “[i]n the alternative” to Count I.
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from October 31, 2017 until the date it collects on the amount
the defendants owe.
I. 	Breach of Contract against EBA (Count 1)
Under Delaware law,4 the elements of a claim for breach of
contract are: (1) the existence of a contract between the
parties, whether express or implied; (2) a breach of an
obligation imposed by the contract; and (3) resulting damage to
the plaintiff. 	Micro Focus (US), Inc. v. Ins. Serv. Office,
Inc., 125 F. Supp. 3d 497, 500 (D. Del. 2015). 	Upon review of
US Foods’ complaint and the incorporated Credit Agreement, the
court concludes that US Foods has adequately alleged each of
these elements in the present case.
(1) 	Valid Contract
Under Delaware law, a valid and enforceable contract
requires: “(1) the intent of the parties to be bound; (2)
sufficiently definite terms; and (3) consideration.” 	Kyle v.
Apollomax, LLC, No. 12-152-RGA, 2013 WL 5954782, at *2 (D. Del.
Nov. 1, 2013) (citing Otto v. Gore, 45 A.3d 120, 138 (Del.
2012)). 	US Foods has adequately pled the existence of a binding
4 The Credit Agreement provides that it “shall be governed
by and interpreted in accordance with the laws and decisions of
the State of Delaware.” 	Doc. no. 1-1 at 2.
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contract between itself and EBA. 	In its complaint, US Foods
alleges that the Credit Agreement between itself and EBA
constitutes a valid and binding contract. 	Pursuant to the
language of the Credit Agreement, US Foods agreed to supply
various food and food-related products and services to EBA. 	In
return, EBA agreed to be bound by the terms of the Credit
Agreement and pay all charges invoiced for such goods and
services. 	The Credit Agreement was signed and executed by EBA
on July 19, 2012. 	Based on the record before the court, the
Credit Agreement became a valid and binding contract at that
time. 	Thus, the district judge should find that the first
element of a breach of contract claim is satisfied as to EBA.
(2) 	Breach
US Foods has also adequately pled that EBA breached the
Credit Agreement. 	As mentioned above, EBA agreed to be bound by
the terms of the Credit Agreement and pay all charges set forth
in each invoice. 	US Foods asserts that it supplied goods and
services to EBA and rendered invoices to EBA for the delivery of
said goods and services. 	EBA failed to pay US Foods the
outstanding balance owed on such invoices. 	When accepting these
allegations as true, US Foods has pled sufficient facts to
establish that EBA committed a breach of the Credit Agreement.
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The district judge should find that the second element of a
breach of contract claim is met as to EBA.
(3) 	Resultant Damages
US Foods has adequately alleged that it suffered damages as
a result of EBA’s breach of the Credit Agreement. 	As of May
2017, EBA had failed to pay the outstanding invoices US Foods
issued for its good and services. 	Under the terms of the Credit
Agreement, US Foods is entitled to seek payment for all charges
set forth in each invoice. 	The district judge should therefore
find that US Foods has satisfied the third element of a breach
of contract claim as to EBA.
II. 	Breach of Contract against Bogosian (Count II)
In its complaint, EBA alleges that Bogosian personally
guaranteed the Credit Agreement and that, by virtue of that
guaranty, Bogosian is personally liable for payment of EBA’s
obligations to US Foods. 	See doc. no. 1 at ¶¶ 11-12. 	The
Credit Agreement supports this allegation. 	On July 19, 2012,
Bogosian signed the Credit Agreement as guarantor and in doing
so, “personally and unconditionally guarantee[d] the payment by
Applicant to Sellers of all amounts due and owing now, and from
time to time hereafter.” 	Doc. no. 1-1 at 3. 	US Foods alleges
that although it demanded payment from Bogosian under the Credit
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Agreement after EBA did not pay the invoices, Bogosian failed to
make such payments.5 	Accepting these allegations as true,
Bogosian is in breach of her obligations under the Credit
Agreement.
III. Remaining Claims (Counts III-V)
US Foods brings three additional claims against EBA, all of
which are brought “[i]n the alternative to Count I.” 	US Foods
does not address the individual claims in its motion for default
judgment, instead arguing that it is entitled to the amount due
under the outstanding invoices, as well as interest and
attorneys’ fees, pursuant to the terms of the Credit Agreement.
Because the court recommends that the district judge find that
US Foods has adequately alleged a breach of the Credit Agreement
by EBA in Count I, the court recommends that the district judge
deny US Foods’ motion as to Counts III – V as moot, and it does
not address those claims further.
IV. 	Damages
“In the case of defaulting defendants, allegations of
damages are not deemed admitted in the context of a default
5 In addition, in support of its motion for default
judgment, US Foods included as an exhibit a letter from Bogosian
stating that she and EBA “are unable to satisfy the debt to US
Foods.” 	Doc. no. 14-3 at 1.
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judgment, and it is the plaintiff’s burden to establish any
entitlement to recovery.” 	Joe Hand Promotions, Inc. v. Rajan,
No. 10-40029-TSH, 2011 WL 3295424, at *3 n.2 (D. Mass. July 28,
2011) (internal quotation marks and citation omitted). 	US Foods
seeks to recover damages for (1) the amounts due under the
invoices; (2) interest from May 2017 through October 30, 2017,
as well as interest from October 31, 2017 until the date it
collects the outstanding amount owed by EBA and Bogosian; and
(3) attorneys’ fees and costs.
(1) 	Invoices
The Credit Agreement provides: “Payment of the purchase
price for goods and/or services acquired from Seller shall be
made pursuant to the terms set forth on each invoice, and
Applicant agrees to repay all charges according to the payment
terms established in said invoice.” 	Doc. no. 1-1 at 2. 	It
further provides: “The entire outstanding balance due to Seller
on all invoices shall become due in full immediately upon
default in the payment of any invoice.” 	Id. 	Bogosian, as
guarantor, agreed to be liable for these amounts in the event
EBA failed to satisfy its obligations under the Credit
Agreement. 	See doc. no. 1-1 at 3. 	Additionally, the Credit
Agreement states that in the event of a default, US Foods has
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“the right to proceed first against Guarantor, without
proceeding with or exhausting any other remedies.” 	Id.
In its complaint, US Foods seeks $133,642.40 in amounts
invoiced to EBA for goods and services provided under the Credit
Agreement. 	In its motion for default judgment, however, US
Foods seeks to recover $137,604.32 for those amounts. 	In
support of its motion, US Foods includes a declaration from its
in-house counsel stating that $137,604.32 represents the amount
due and owing for the invoices, see doc. no. 14-1 at ¶¶ 8, 9, as
well as a table listing each of the outstanding invoices and the
amounts due thereunder, see id. at 5-6.6
Federal Rule of Civil Procedure 54(c) states in pertinent
part that “[a] default judgment must not differ in kind from, or
exceed in amount, what is demanded in the pleadings.” 	“Thus,
where a complaint specifies the amount of damages sought, the
plaintiff is limited to entry of a default judgment in that
amount.” 	Trustees of the Nat’l Automatic Sprinkler Indus.
Welfare Fund v. Sheehe, No. CIV.A. DKC 11-0365, 2011 WL 5034830,
at *2 (D. Md. Oct. 21, 2011); see also Outram v. Outram, No. CV
08-3437 ADS ETB, 2010 WL 1222935, at *2 (E.D.N.Y. Mar. 4, 2010)
(holding that in the context of a motion for default judgment,
6 Although the table does not include a total, the court has
confirmed that the amount of the outstanding invoices in the
table comes to $137,604.32.
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the “plaintiff may not recover money damages in excess of that
pleaded in her Amended Complaint”), report and recommendation
adopted, No. 08-CV-3437 ADS ETB, 2010 WL 1222893 (E.D.N.Y. Mar.
23, 2010); Jackson v. Vogt, No. 09-4569, 2009 WL 3756563, at *3
(E.D. La. Nov. 5, 2009) (awarding the plaintiff the amount
alleged in his complaint despite evidence submitted with motion
for default judgment showing plaintiff may be entitled to an
additional $138).
US Foods does not explain the discrepancy between the
damages it alleges in its complaint and the amount it now seeks
in its motion for default judgment. 	Therefore, US Foods is
limited to the damages alleged in its complaint, and the court
recommends that the district judge award damages in the amount
of $133,642.40 for amounts due under the invoices.
(2) 	Interest
The Credit Agreement provides that the “Applicant agrees to
pay interest in the amount of 1.5% per month . . . on any
payment considered past due until collected.” 	Doc. no. 1-1 at
2. 	Bogosian also agreed to pay 1.5% interest per month on any
amount outstanding until collected. 	Id. at 3.
US Foods seeks $12,384.39 in interest, which it asserts
represents 1.5% interest on the amount owed under the invoices
from May 2017, when EBA and Bogosian failed to pay the
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outstanding invoices, until October 30, 2017, the date it filed
its motion for default judgment. 	That amount, however, is
calculated off of the $137,604.32 figure that US Foods seeks in
its motion for default judgment. 	Because US Foods is entitled
to recover only $133,642.40 under the invoices, as it alleged in
the complaint, the interest must be reduced. 	Therefore, the
court recommends that the district judge award US Foods
$12,027.82 in interest from May 2017 through October 30, 2017.7
(3) 	Attorneys’ Fees and Costs
The Credit Agreement provides: “Applicant agrees to pay all
costs of collection incurred by Seller, including reasonable
attorneys’ fees and expenses, should a default in payment or any
other obligation of Applicant occur.” 	Doc. no. 1-1 at 2. 	It
further states: “the Guarantor agrees to pay all costs, expenses
and fees, including reasonable attorneys’ fees and expenses,
which may be incurred by Sellers in enforcing this Guaranty or
protecting their rights following any default on the part of the
Guarantor.” 	Id. at 3.
7 Under the terms of the Credit Agreement, US Foods is also
entitled to recover 1.5% interest per month from October 31,
2017 until the date on which judgment is entered. 	Therefore,
the court recommends that the district judge award interest in
that amount. 	The court also recommends that the district judge
direct the Clerk of Court to impose post-judgment interest.
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An award of reasonable attorneys’ fees is typically
calculated by the lodestar method in which the court multiplies
the hours productively spent by a reasonable hourly rate.
Spooner v. EEN, Inc., 644 F.3d 62, 67-68 (1st Cir. 2011).
“`Reasonable hourly rates will vary depending on the nature of
the work, the locality in which it is performed, the
qualifications of the lawyers, and other criteria.’” 	Hutchinson
ex rel. Julien v. Patrick, 636 F.3d 1, 16 (1st Cir. 2011)
(quoting United States v. One Star Class Sloop Sailboat, 546
F.3d 26, 38 (1st Cir. 2008)). 	The determination of what
constitutes a “reasonable” fee is left to the court’s
discretion. 	de Jesus v. Banco Popular de P.R., 918 F.2d 232,
233-34 (1st Cir. 1990).
The party seeking a fee award bears the burden of producing
materials to support the request. 	Hutchinson, 636 F.3d at 13.
“Appropriate supporting documentation includes counsel’s
contemporaneous time and billing records and information
establishing the usual and customary rates in the marketplace
for comparably credentialed counsel.” 	Spooner, 644 F.3d at 68;
see also Bogan v. City of Boston, 489 F.3d 417 (1st Cir. 2007).
US Foods seeks an award of $10,532.30 in attorneys’ fees
and $758.84 in costs. 	It submits a declaration from its
counsel, who states that Bryan Cave LLP has billed US Foods
$6,356.30 in legal fees, and local counsel has billed US Foods
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$4,176 in such fees. 	The statements in support of those
amounts, however, are inadequate.
US Foods’ counsel represents in her declaration that the
attorneys’ fees and costs represent the “costs for pre-complaint
investigation, preparing and filing the Summons and complaint,
paying the fees associated with filing the Complaint and
initiating this action, serving the Defendants in this action
with the Complaint, preparing the instant Motion for Default
Judgment, research for this Motion, and local counsel fees.”
Doc. no. 14-2 at ¶ 7. 	She further states she reviewed invoices
from Bryan Cave, that the work shown on those invoices was
reasonably necessary, and that the “rates reflected in the
invoices are reasonable in the relevant legal community for the
legal institution and experience level of the attorneys working
on this matter.” 	Id. at ¶ 14. 	Nowhere, however, does counsel
detail the hours billed on the case, or either Bryan Cave’s or
local counsel’s rates. 	Nor does she detail the actual costs
incurred, separate and apart from any legal work performed.
The above representations, unbolstered by any supporting
documentation, do not provide the court with sufficient
information to determine whether US Foods’ request is
reasonable. 	Spooner, 644 F.3d at 68. 	The court therefore
recommends that the district judge deny US Foods’ request for
attorneys’ fees and costs without prejudice to renewal, with
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sufficient supporting documentation, within fifteen (15) days of
the date of the district judge’s order either approving or
rejecting this Report and Recommendation.
Conclusion
For the foregoing reasons, the court recommends that the
district judge: (1) grant US Foods’ motion for default judgment
(doc. no. 14) on Counts I and II; (2) deny as moot US Foods’
motion for default judgment as to Counts III, IV, and V; (3)
award US Foods $145,670.22 in past due invoices plus interest
accrued since October 31, 2017 and continuing at a rate of 1.5%
on the awarded outstanding invoice balance of $133,642.40 until
judgment is entered; (4) direct the Clerk of Court to impose
post-judgment interest; and (5) deny US Foods’ request for
attorneys’ fees and costs without prejudice to renewal within
fifteen (15) days of the date of the district judge’s order on
this Report and Recommendation.
Any objection to this Report and Recommendation must be
filed within fourteen days of receipt of this notice. 	See Fed.
R. Civ. P. 72(b)(2). 	The fourteen day period may be extended
upon motion. 	Failure to file specific written objections to the
Report and Recommendation within the specified time waives the
right to appeal the district court’s order. 	See Santos-Santos
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v. Torres-Centeno, 842 F.3d 163, 168 (1st Cir. 2016); Fed. R.
Civ. P. 72(b)(2).
______________________________
Andrea K. Johnstone
United States Magistrate Judge
July 18, 2018
cc: 	Maria Vathis, Esq.
Stephen L. Rossetti, Jr., Esq.
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