Opinion
08-22-2013
DIANA BRADLEY, et. al, Plaintiffs, v. KEVIN MILLER, et. al., Defendants.
Judge Timothy S. Black
ORDER GRANTING IN PART
PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT (Doc. 173)
This civil action is before the Court on Plaintiffs' motion for default judgment against Defendants Capital Investments ("CI"), Great Miami Debentures ("GMD"), Great Miami Real Estate ("GMRE"), and Chatsworth Jacobs. (Doc. 173). Defendants did not file responsive memoranda.
I. BACKGROUND FACTS AND PROCEDURAL HISTORY
Plaintiffs allege they are the victims of a real estate/securities Ponzi scheme in which they lost at least $134,354.46. (Doc. 46). Plaintiffs also claim they are entitled to statutory damages pursuant to Ohio Rev. Code § 2923.34, bringing alleged damages to $403,063.40. (Doc. 173). Finally, Plaintiffs claim that they are entitled to recover attorneys' fees and costs. (Id.)
On January 19, 2011, Plaintiffs served a summons and complaint on James D. Powell, president of CI, GMD, and GMRE. (Docs. 7, 158). Plaintiffs' summons named the parties as "Miller et al." (Doc. 7 at 1; Doc. 158). The summons was directed to "James Powell." (Doc. 7, at 1; Doc. 158). The complaint named all Defendants, including Powell, CI, GMD, and GMRE. (Doc. 1, at 1-2; Doc. 158). On March 25, 2011, Plaintiffs issued a summons and complaint on Powell, CI, GMD, and GMRE. (Docs. 12, 158). Plaintiffs designated Powell as "president" of CI, GMD, and GMRE. (Doc.12 at 1, 3, 5; Doc. 158). CI, GMD, and GMRE have not answered or otherwise defended in this case.
With respect to Defendant Chatsworth Jacobs, Plaintiffs' attorney sent Jacobs a waiver of service of summons on May 17, 2012 via certified mail. (Docs. 108-3, 158). That mailing, however, was returned "Attempted Not Known." (Id.) On June 5, 2012, the Clerk of Courts issued a complaint and summons to Jacobs by certified mail pursuant to Fed. R. Civ. P. 5(e)(1) and Ohio R. Civ. P. 4.1(A). (Docs. 51, 52, 158). On June 25, 2012, the certified mail for Jacobs was returned to the Clerk as "ANK." (Docs. 57, 158). On June 26, 2012, Plaintiffs requested the Clerk send the complaint and summons via regular U.S. Mail pursuant to Fed. R. Civ. P. 4(e)(1). The ordinary mail summons was returned "Attempted Not Known." (Docs. 62, 158).
As a result, Plaintiffs attempted service by publication. (Docs. 70, 158). Specifically, Cincinnati Court Index Press, Inc., published notice as required by the civil rules. (Id.) On August 14, 2012, Plaintiffs filed that request and notice with the Clerk of Courts. (Id.) Then, on September 7, 2012, Plaintiffs filed an affidavit by Cincinnati Court Index with notice that service by publication had been completed pursuant to Ohio R. Civ. P. 4(e)(1) and Ohio R. Civ. P. 4.4(A). (Doc. 73). Defendant Jacobs has not answered or otherwise defended in this case.
II. ANALYSIS
A. Service of Process
Plaintiffs effectively perfected service on CI, GMD, and GMRE pursuant to Fed. R. Civ. P. (4)(h)(1)(B).
Given that Plaintiffs were unable to perfect service on Defendant Jacobs pursuant to that rule, they attempted to do so pursuant to Fed. R. Civ. P. 4(e), which authorizes service by means provided under state law. Ohio R. Civ. P. 4.4(A)(1) is the relevant Ohio statute concerning service by publication.
First, Ohio R. Civ P. 4.4(A)(1) applies to "actions where such service is authorized by law." O.R.C. 2703.14 details the types of actions in which service by publication is authorized under Ohio law. Plaintiffs have not alleged that this is an action that falls into any of the categories provided for in the statute.
Second, Ohio R. Civ. P. 4.4(A)(1) requires that:
Before service by publication can be made, an affidavit of a party or his counsel shall be filed with the court. The affidavit shall aver that service of summons cannot be made because the residence of the defendant is unknown to the affiant, all of the efforts made on behalf of the party to ascertain the residence of the defendant, and that the residence of the defendant cannot be ascertained with reasonable diligence.In sum, a party attempting to perfect service by publication must detail the efforts made to ascertain the whereabouts of the intended recipient of service. Hill v. Desmarais, 2010 U.S. Dist. LEXIS 73060, at *15-16 (S.D. Ohio, June 28, 2010). No such affidavit was filed in this case.
Consequently, Plaintiffs have not effectively perfected service on Defendant Jacobs pursuant to Fed. R. Civ. P. 4(e).
B. Default Judgment and Damages
When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided in the Federal Rules of Civil Procedure and that fact is shown by affidavit or otherwise, the Clerk shall enter the party's default. See Fed. R. Civ. P. 55(a). Once the default has been entered, the well-pleaded facts of the complaint relating to liability must be accepted as true. See Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983). However, those allegations relating to the amount of damages suffered are ordinarily not, and a judgment by default may not be entered without a hearing on damages unless the amount claimed is liquidated or capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits. (Id.)
The failure of Defendants CI, GMD, and GMRE to respond to any of the pleadings has made it abundantly clear that they have no intention of defending this action. Therefore, default judgment against those Defendants and damages thereon are warranted. Plaintiffs move for default judgment for compensatory damages ($134,354.46) and statutory damages (treble the compensatory damages), all totaling $403,063.40. (Doc. 173). Further, Plaintiffs request that the amount of attorneys' fees and costs to be recovered shall be determined at a later date. (Id.)
Plaintiff Diana Bradley alleges she lost $45,990.77 as a result of Defendants' actions. (Doc. 173-1). Specifically, she alleges she was scammed into transferring her IRA worth $45,990.77 to CI. (See Doc. 1; see also Doc. 173-1). Further, Plaintiff James Bradley alleges he lost $88,362.23 due to Defendants' actions. Specifically, he alleges he was scammed into transferring his annuity worth $88,362.23 to CI. (Id.) Each amount claimed is a sum certain supported by a detailed affidavit, and, consequently, a hearing on damages is not required.
III. CONCLUSION
Accordingly, based on the foregoing:
1. Plaintiffs' motion for entry of default judgment and damages (Doc. 173) is GRANTED IN PART;
2. Plaintiffs are awarded judgment against Capital Investments, Great Miami Debentures, and Great Miami Real Estate jointly and severally in the amount of $403,063.40 plus attorney's fees and costs;
3. Plaintiffs shall submit a motion for attorney's fees and costs within 45 days of the date of judgment; and
4. The Clerk's entry of default (Doc. 170) is VACATED as to Defendant Chatsworth Jacobs.
IT IS SO ORDERED.
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Timothy S. Black
United States District Judge