Summary
stating that a plaintiff seeking default judgment bears the burden of providing an evidentiary basis for the damages it seeks
Summary of this case from J&J Sports Prods., Inc. v. GrayerOpinion
CIVIL ACTION NO. 3-08-CV-0574-B.
August 13, 2008
MEMORANDUM ORDER
Before the Court is Plaintiff Halff Associates, Inc.'s Motion for Entry of Default and Default Judgment from the Clerk of the Court against Warner Pacific Properties, LLC, filed July 16, 2008. (doc. 7). After due consideration and review of the record and all evidence presented, including without limitation the motion and its supporting affidavits and exhibits, the Court finds that this motion should be GRANTED.
I. BACKGROUND
This case arises from two contracts for professional engineering services between Plaintiff Halff Associates, Inc. ("Halff") and Defendant Warner Pacific Properties, LLC ("Warner"). On May 4, 2007, Warner signed two separate contracts. In the first contract ("Contract 1"), Warner agreed to pay for and Halff agreed to perform topographical, boundary, and tree surveys for a 10.27 acre tract at the northwest corner of Gus Thomasson and Interstate 30 in Mesquite, Texas. (Ex. 1). In the second contract ("Contract 2"), Warner agreed to pay for and Halff agreed to perform topographical, boundary, and tree surveys for a 19.85 acre tract at the southeast corner of Garland Avenue and Naaman Forest Boulevard in Garland, Texas. (Ex. 2). Both contracts specified that Warner would pay Halff's monthly invoices within thirty (30) days of receipt and that Halff would charge 1.5% interest per month for invoices not paid within thirty (30) days. (Exs. C, 1, 2). After the contracts were executed, Halff provided the professional services set forth in both Contract 1 and Contract 2. (Ex. C). Thereafter, however, Warner failed to pay Halff for all of the work performed and services rendered under the contracts. ( Id.).Under Contract 1, Halff claims that Warner owes Halff the principal amount of $17,107.66 as of March 26, 2008, with an accrued interest on the past amount due of $3,889.74. (Ex. C). Under Contract 2, Halff claims that Warner owes Halff the principal amount of $51,857.34 as of March 26, 2008, with an accrued interest on the past amount due of $9,413.60. ( Id.). Halff also claims that it has incurred legal fees in the amount of $4,163.75 in connection with this suit. (Exs. C, D).
On April 3, 2008 Halff filed this lawsuit against Warner claiming breach of contract and quantum meruit. (doc. 1). That same day, Warner was served with a notice of commencement of the suit and a request for waiver of service of process. (Pl.'s Request for Default 1). On May 5, 2008, Warner requested an extension of time for Plaintiff's counsel to file an answer to the suit; Halff agreed to extend the answer date until July 3, 2008. ( Id.). Warner signed and returned the waiver of service of process, and it was filed with the Court on May 8, 2008. (doc. 5). On July 7, 2008, after Warner had not made any appearance in the case, this Court ordered Halff to show cause why it had not moved for a default judgment against Warner. (doc. 6). On July 16, 2008, Halff filed Request for Entry of Default and Default Judgment from the Clerk of the Court. (doc. 7). On July 17, 2008, the Clerk entered default against Warner. (doc. 8). The Court will treat the Request for Entry of Default Judgment from the Clerk of the Court as a motion for default judgment by the Court pursuant to Federal Rule of Civil Procedure 55(b)(1)(2) and will now address the merits of that motion.
II. ANALYSIS
A. Actual Damages
After reviewing the pleadings and evidence submitted by Halff, the Court GRANTS the Motion for Default. Although a default judgment against a defendant conclusively establishes its liability, it does not establish the amount of damages. United States v. Shipco Gen., Inc., 814 F.2d 1011, 1014 (5th Cir. 1987) (noting that after default the plaintiff's well-pleaded factual allegations are taken as true, except regarding damages). Accordingly, it remains Halff's burden to provide an evidentiary basis for the damages it seeks.
In support of its request for actual damages of $82,268.34, Halff has submitted copies of the billing records for Contract 1 and Contract 2 and an affidavit of Dan Tanksley, the Vice President and General Counsel of Halff, stating the amounts owed and the accrued interest. Accordingly, based on this evidence, Halff is entitled to an award of actual damages of $82,268.34.
B. Attorney's Fees
Additionally, Halff seeks attorneys' fees of $4,163.75. Under Texas law, a plaintiff may recover reasonable attorneys' fees when its claims are for an oral or written contract or fraud in a real estate transaction. TEX.CIV.PRAC. REM.ANN. § 38.001 (Vernon 2007); TEX.BUS. COM.ANN. § 27.01(e) (Vernon 2007). Therefore, Halff may recover reasonable attorneys' fees in this breach of contract action. Halff has provided a sworn affidavit of its lead counsel, Ron G. MacFarlane, Jr., setting forth his hourly rate, a summary of the services performed, and the number of hours he worked on this matter. (Ex. D). MacFarlane further explains that his fee is a reasonable and necessary fee for an attorney to charge in Dallas in an action involving these types of issues and that $4,163.75 is a fair, reasonable, and customary fee for the services rendered in this action. ( Id.). Because usual and customary fees are presumptively reasonable, the Court awards Plaintiffs attorneys' fees of $4,163.75. TEX. CIV. PRAC. REM. ANN. § 38.003 (Vernon 2007).
MacFarland stated that he applied the following factors in determining the reasonableness and necessity of the legal fees: "(1) the time and labor required, the novelty and difficulty of the legal issues involved, and the skill required to performed the legal services properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the legal services; and (8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered." (Ex. D at 2).
C. Pre and Post-Judgment Interest and Costs
Halff requests prejudgment and post judgment interest at the rate of five percent (5%) per annum and the costs of court. Under Texas law, courts are to rely on general principles of equity to determine prejudgment interest when there is no enabling statute regarding prejudgment interest. Johnson Higgins of Tex. Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998). The Texas Finance Code does provide for prejudgment interest for damages arising from wrongful death, personal injury, and property damage claims; however, none of those claims are implicated here. TEX. FIN. CODE ANN. §§ 304.101-103 (Vernon 1998 Supp. 2005). Yet, the Texas statutory scheme is still relevant, because the Texas Supreme Court in Johnson Higgins held that common law prejudgment interest should resemble the prejudgment interest law enacted by the Texas legislature. 962 S.W. 2d at 530-31. The Texas Finance Code not only sets the rate of prejudgment interest, but also states that prejudgment interest begins to accrue on the earlier of (1) 180 days after the date the defendant receives written notice of a claim or (2) the date suit is filed. TEX. FIN. CODE ANN. §§ 304.104. In keeping with the principles articulated in Johnson Higgins, the Court will follow the prejudgment interest rules described in the Texas Finance Code. The Court believes that the interest rate specified in Texas Finance Code § 304.003(c) is appropriate for the prejudgment interest rate in this case, to be determined as of the date of judgment. Prejudgment interest will only accrue as to actual damages awarded and not on any attorney's fees awarded. See Cushman Wakefield, Inc. v. Fletcher, 915 S.W.2d 538, 547 (Tex.App.-Dallas 1995, writ denied) (holding prejudgment interest is not recoverable on attorney's fees awarded). As for when prejudgment interest began to accrue, the Court is unaware of evidence of a demand made to Warner; thus, prejudgment interest will begin to accrue from April 3, 2008 — the day suit was filed. Accordingly, the Court will award prejudgment interest calculated at the date of entry of judgment on the $82,268.34 in actual damages.
The interest rate for Texas Finance Code § 304.003(c) is available on the website of the Office of Consumer Credit Commissioner of Texas at http://www.occc.state.tx.us/pages/int rates/Index.html. "Prejudgment interest is computed as simple interest and does not compound." TEX. FIN. CODE ANN. § 304.104.
Turning to post-judgment interest, regardless of whether a cause of action is based on state law or federal law, federal law determines post-judgment interest. See Boston Old Colony Ins. Co. v. Tiner Assoc., Inc., 288 F.3d 222, 234 (5th Cir. 2002) (noting that federal post-judgment interest applies even in diversity cases). The federal post-judgment interest rate is governed by 28 U.S.C. § 1961(a), which sets the rate at the weekly average 1-year constant maturity Treasury yield for the calendar week preceding the date of the judgment. Therefore, the Court will award post-judgment interest calculated at the date of the entry of judgment.
The post-judgment interest rate may be found at: http://www.txnd.uscourts.gov/publications/pjrate.html.
Halff requests costs of court as well. The Court will not award a specific amount of costs at this time, but Halff may file an appropriate bill of costs after the Court issues its judgment pursuant to Rule 54 of the Federal Rules of Civil Procedure.
III. CONCLUSION
For the reasons set forth above, the Court GRANTS Halff's Motion for Default Judgment and will issue a Judgment for the following:
• $82,268.34 in damages;
• $4,163.75 in attorney's fees;
• prejudgment interest calculated at the date of entry of judgment on the $82,268.34 in damages;
• post-judgment interest calculated at the date of entry of judgment.
SO ORDERED.