Opinion
Civil Action No.: 4:17-cv-1838-SAL-TER
06-24-2020
KENNETH R. BATES, Plaintiff, v. SYLVIA TAWANDA VANDROFF, TRINA CLARKSON, MAROLYN D. VANDROFF, ELIZABETH KINDER, SHARDICE SHARP, BRENDA ROBINSON, KYLEE MARTIN, ANOTHER CHANCE PUBLISHING, ELI SOLUTIONS, LLC, and ANOTHER CHANCE TO BRIDGE THE GAP, Defendants.
REPORT AND RECOMMENDATION
I. INTRODUCTION
In this action, Plaintiff, who is proceeding pro se, alleges a claim for breach of contract. He asserts that Defendants breached a contract with him by selling his personal writings without his permission and without providing him with any compensation. Defendants Kinder, Robinson, Clarkson, Sharp, Martin, and Another Chance Publishing have been dismissed without prejudice pursuant to Fed.R.Civ.P. 4(m). See ECF No. 72. Entries of default have been made as to Defendants Marolyn D. Vandroff and ELI Solutions, LLC. See ECF Nos. 73, 109. Defendant Sylvia Tawanda Vandroff, also proceeding pro se, is the only Defendant who filed an answer.
Sylvia Vandroff attempted to file an answer on behalf of herself as well as ELI Solutions, LLC. However, the undersigned notified her that she could not represent ELI Solutions, LLC, and directed ELI Solutions, LLC to retain counsel within thirty days or its answer would be stricken. ELI Solutions, LLC failed to retain counsel, and thus its answer was stricken and default was entered.
Presently before the Court is Plaintiff's Motion for Summary Judgment (ECF No. 100), which the court will treat as a motion for default judgment. On January 7, 2020, the undersigned entered an order directing Plaintiff to submit "any and all supplemental briefing and/or additional evidence in support of his Motion for Summary Judgment," "in which he seeks a determination of liability and damages." Order (ECF No. 104) pp. 4-5. After Plaintiff filed his Supplement (ECF No. 110) and supporting documents, Defendant Sylvia Tawanda Vandroff was advised pursuant to Roseboro v. Garrison, 528 F.3d 309 (4th Cir. 1975), that a failure to respond to Plaintiff's motion could result in the motion being granted and judgment being entered against her. Sylvia Vandroff has not filed a response to the motion. All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02(B)(2)(e), DSC.
II. FACTS
In his Complaint, Plaintiff alleges that he entered into a contract with Defendant ELI Solutions, LLC, on February 19, 2016. ECF No. 1-15, p. 7. Under the contract, ELI Solutions was to edit, format, and prepare for print, including a cover, a book written by Plaintiff entitled "The Law of Necessity vs. Criminal Mind of Society." ECF Nos. 1-2, 1-16, p. 1. Plaintiff alleges that ELI Solutions has had possession and control of his book since that time and the book has been advertised and sold on Amazon yet he has received no payments from any such sales. ECF No. 1-15, p. 7. He alleges that he is "entitled to damages sought from [ ] Defendants because of contract default and the sales of his personal writings without any compensation. The book has been being [sic] sold since mid 2016 without [Plaintiff's] permission or compensation, although the damages also stem from Plaintiff's inability to sell or protect his own asset resulting in lost time and revenue which the Defendants are solely responsible for." ECF No. 1-15, p. 7. Plaintiff also asks the court to "order the Defendants' company to finish the contracted services to the Plaintiff's satisfaction," and order that all original materials be returned to him. ECF No. 1-15, p. 7.
III. DISCUSSION
Plaintiff filed this breach of contract action in this court pursuant to 28 U.S.C. 1332, which provides for "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States." Defendants are located in South Carolina and Plaintiff is an inmate at the Federal Correctional Institution (FCI) Hazleton in West Virginia. He alleges that the total damages arising from the alleged breach of contract "total $75,000 or more resulting from damages and the possible royalties ensuing from [Plaintiff's] original investments, the online sales of the plaintiff's book by the defendants, and the possible theft of plaintiff's original materials." ECF No. 1, p. 2.
"A federal court sitting in diversity is required to apply the substantive law of the forum state, including its choice-of-law rules." Francis v. Allstate Ins. Co., 709 F.3d 362, 369 (4th Cir.2013). "Generally, under South Carolina choice of law principles, if the parties to a contract specify the law under which the contract shall be governed, the court will honor this choice of law." Nucor Corp. v. Bell, 482 F. Supp. 2d 714, 728 (D.S.C. 2007) (citation omitted). However, the contract at issue here contains no choice of law provision. In the absence of a choice of law provision, South Carolina's choice of law rule for contract actions applies the substantive law of the lex loci contratus for issues regarding formation, interpretation, or validity, and the substantive law of the place of performance for issues regarding performance. Witt v. American Trucking Associations, Inc., 860 F. Supp. 295, 300 (D.S.C. 1994) (citing Livingston v. Atlantic Coast Line R.R. Co., 176 S.C. 385, 180 S.E. 343, 345 (1935)). None of the parties address the choice of law issue. However, it appears that the place of performance of the contract was South Carolina because ELI Solutions is located in South Carolina and, under the contract, ELI Solutions was to "edit, format and prepare" Plaintiff's work for print. ECF No. 1-16, p. 1. Accordingly, South Carolina law applies to this action.
As an initial matter, there is no indication in the record that either Marolyn D. Vandroff or Sylvia Tawanda Vandroff were parties to the contract at issue in this case. "Generally, one not in privity of contract with another cannot maintain an action against him in breach of contract." Windsor Green Owners Ass'n v. Allied Signal, Inc., 362 S.C. 12, 17, 605 S.E.2d 750, 752 (Ct.App.2004). Plaintiff makes no argument as to why Marolyn D. Vandroff should be liable to him for any alleged breach of the contract by ELI Solutions, LLC. As to Sylvia Tawanda Vandroff, Plaintiff appears to rely on his assertion that she is the CEO of ELI Solutions, LLC in seeking to hold her liable. However, "the debts, obligations, and liabilities of a limited liability company, whether arising in contract, tort, or otherwise, are solely the debts, obligations, and liabilities of the company. A member or manager is not personally liable for a debt, obligation, or liability of the company solely by reason of being or acting as a member or manager." S.C. Code Ann. § 33-44-303(a). Accordingly, neither Marolyn D. Vandroff nor Sylvia Tawanda Vandroff are liable for any breach of the contract between Plaintiff and ELI Solutions, LLC, and judgment against them is not appropriate. Accordingly, Marolyn D. Vandroff and Sylvia Tawanda Vandroff are dismissed as parties to this action.
Subsection (c) provides for a waiver of the liability shield set forth in subsection (a) where the waiver is reflected in the articles of organization and the member has consented in writing to be bound by the waiver. S.C. Code Ann. § 33-44-303(c). However, Plaintiff has failed to show evidence of any such waiver.
As set forth above, ELI Solutions is in default. The allegations in Plaintiff's complaint against ELI Solutions, LLC are accepted as true in light of its default. See DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.1 (4th Cir. 2009) (accepting plaintiff's allegations against defaulting defendant as true, noting a defaulting defendant "admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established") (quoting Ryan v. Homecomings Fin. Network, 253 F.3D 778, 780 (4th Cir. 2001)). However, "a default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover." Ryan, 253 F.3d at 780. As such, the court need not accept the plaintiff's legal conclusions and must determine whether the plaintiff's allegations support the relief sought. Id.
To establish a breach of contract claim under South Carolina law, a plaintiff must show the existence of a contract, its breach, and damages caused by such breach. Hotel & Motel Holdings, LLC v. BJC Enterprises, LLC, 414 S.C. 635, 652, 780 S.E.2d 263, 272 (Ct. App. 2015) (citing S. Glass & Plastics Co. v. Kemper, 399 S.C. 483, 491-92, 732 S.E.2d 205, 209 (Ct.App.2012)). The record reveals that Plaintiff and ELI Solutions, LLC entered into a self-publishing agreement with respect to Plaintiff's book entitled "Law of Necessity v. Criminal Mind of Society" on February 19, 2016. ECF No. 1-16, p. 1. ELI Solutions, LLC, breached the agreement, which provides in part, that "ELI will not provide information to anyone about the author's book without consent from the author," ECF No. 1-16, p. 1, by selling his book on Amazon without his permission. Further Plaintiff alleges that he has been damaged as a result of the sales of his personal writings without any compensation. "The book has been being [sic] sold since mid 2016 without [Plaintiff's] permission or compensation, although the damages also stem from Plaintiff's inability to sell or protect his own asset resulting in lost time and revenue which the Defendants are solely responsible for." ECF No. 1-15, p. 7.
Plaintiff provides the following with respect to damages in this case:
Plaintiff offers that the average Urban Fiction Novel sells from 500 to 1,500 copies per month (hard copies). There is also an E-book business which is not included in this estimate. If the Defendants had fulfilled their contractual obligations in a timely manner, it is feasible the Plaintiff's book could've sold in the neighborhood of 7,000 to 21,000 copies not including Internet E-book sales. The published sales price of said book is $15.99 per copy, therefore its projected monetary value could have been from the minimum of $74,130 to the possibility of $232,390 for the said period from their advertisement in an ELI Solutions flyer (May 2016 edition) until the present time.ECF No. 1-15, p. 9. These figures appear to relate to his allegations that he was unable to sell his book due to ELI Solutions, LLC's breach of the contract. However, he provides no evidence to substantiate these numbers. With respect to the sales of his book via Amazon for which he alleges he received no compensation, Plaintiff has produced emails which indicate that his e-book was offered for sale for $1.99 via Amazon Digital Services beginning December 23, 2016. ECF Nos. 1-6, 1-7, 1-12. After Plaintiff inquired about why his e-book was being offered for sale without his knowledge, Marolyn Vandroff, an employee of ELI Solutions, LLC, responded on March 11, 2017, that the Kindle e-book "is taken down. I did it myself." ECF No. 1-6. There is no evidence in the record regarding how many e-book sales, if any, were made between December 23, 2016, and March 11, 2017. Finally, there is no evidence in the record regarding how much Plaintiff paid for ELI Solutions, LLC's services pursuant to the Self Publishing Agreement.
The purpose of an award of damages for breach of contract is to put the plaintiff in as good a position as he would have been in if the contract had been performed. The proper measure of compensation is the loss actually suffered by the plaintiff as a result of the breach. When lost profits are contemplated as a measure of damages for breach of contract, they should be established with reasonable certainty since recovery cannot be had for profits which are conjectural or speculative. This rule for recovery of lost profits is in accord with the general rule for recovery of damages which requires that the evidence should be such as to enable the factfinder to determine the amount of the damages with reasonable certainty. While proof with mathematical certainty is not required, the amount of damages cannot be left to conjecture, guess, or speculation.Minter v. GOCT, Inc., 322 S.C. 525, 528, 473 S.E.2d 67, 70 (Ct. App. 1996). Despite notice from the court to present "any and all supplemental briefing and/or additional evidence" in support of liability and damages, Order (ECF No. 104) pp. 4-5, Plaintiff has failed to present evidence of damages sufficient to allow the court to enter, without speculation, a judgment of actual damages regarding lost profits in this action. Even "[i]n a default case, the plaintiff must prove ... the amount of his damages, and such proof must be by a preponderance of the evidence." Solley v. Navy Fed. Credit Union, Inc., 397 S.C. 192, 204, 723 S.E.2d 597, 603 (Ct.App.2012); see also Jackson v. Midlands Human Res. Ctr., 296 S.C. 526, 529, 374 S.E.2d 505, 506 (Ct.App.1988) ("A judgment for money damages must be warranted by the proof of the party in whose favor it is rendered."); Paddock Indus., Inc. v. Paddock Pool Constr. Co., No. 0:15-CV-03292-JFA, 2015 WL 7184849, at *3 (D.S.C. Nov. 12, 2015) (citing Cement and Concrete Workers Dist. Council Welfare Fund, 699 F.3d 230, 234 (2d. Cir.2012)) ("While Rule 55(b)(2) permits the district court to conduct a hearing to determine damages, such a hearing is not mandatory."). However, Plaintiff also seeks injunctive relief in his complaint. Specifically, Plaintiff asks the court to "order the Defendants' company to finish the contracted services to the Plaintiff's satisfaction," and order that all original materials be returned to him. It appears from the record that Plaintiff has since retained another company to finish his book at a cost of $400.00 as a result of ELI Solutions, LLC's breach of its contract. See Email dated 9/27/19 (ECF No. 100-1). Therefore, Plaintiff is entitled to actual damages in the amount of $400 as well as the return of all of his original materials submitted to ELI Solutions, LLC.
The agreement itself states only "Total amount due: n/a paid in full." ECF No. 1-16, p. 2.
IV. CONCLUSION
For the reasons discussed above, it is recommended that Plaintiff's Motion for Summary Judgment (ECF No. 100) be treated as a Motion for Default Judgment and that it be granted as to Defendant ELI Solutions, LLC, only and Plaintiff be awarded actual damages in the amount of $400.00 as well as the return of all of his original materials submitted to ELI Solutions, LLC. It is further recommended that the Motion for Default Judgment be denied as to all other Defendants for the reasons set forth above and this case be dismissed in its entirety.
Although the record indicates that Another Chance to Bridge the Gap was served on May 3, 2019, see ECF No. 76, and did not file an answer, Plaintiff has not sought an entry of default or default judgment against this Defendant. Nevertheless, dismissal of this Defendant is proper as well as Plaintiff has failed to show a contractual relationship existed between him and Another Chance to Bridge the Gap.
s/Thomas E. Rogers, III
Thomas E. Rogers, III
United States Magistrate Judge June 24, 2020
Florence, South Carolina