United States District Court, D. South Carolina, Greenville Division
CARIBBEAN INDUSTRIAL PRODUCTS, LLC and STONE HARPER, Plaintiffs,
ALLEN FILTRATION, LLC, Defendant.
ORDER GRANTING REQUEST FOR DEFAULT JUDGMENT
GEIGER LEWIS UNITED STATE DISTRICT JUDGE
a declaratory judgment action. The matter is before the Court
on the request of Plaintiffs Caribbean Industrial Products,
LLC (CIP) and Stone Harper (Harper) (collectively,
Plaintiffs) for a default judgment. The Court has
jurisdiction over the matter under 28 U.S.C. § 1332.
Having reviewed the allegations of the Complaint, the record,
and the applicable law, the Court makes the following
findings of fact and conclusions of law:
filed the Complaint in this action on October 19, 2016. ECF
No. 1. As set forth in the affidavit of service filed with
the Court, Defendant Allen Filtration, LLC (Defendant) was
served with a copy of the Summons, Complaint, and Mandatory
Disclosures on December 21, 2016. ECF No. 6.
to Fed.R.Civ.P. 12(a)(1)(A), Defendant was required to file
and serve its Answer to the Complaint no later than January
11, 2017. As of the date of filing of Plaintiffs' request
for default judgment, April 18, 2017, no responsive pleading
had been filed or served.
alleged in its Complaint it is a South Carolina limited
liability company and Harper is a resident of Greenville,
South Carolina and is the sole member of CIP. ECF No. 1
¶¶ 2-3. As set forth in the declaration of Harper
in support of the request for default judgment, Plaintiffs
brought this action in response to correspondence received by
Plaintiffs in South Carolina from Defendant threatening to
bring a lawsuit to enforce an alleged contract dated April
15, 2016, between Defendant and CIP and to hold Harper
personally liable for payment of damages under a theory
Harper was the alter ego of CIP. ECF No. 13-3. The amount
Defendant claimed to be entitled to was in the principal
amount of Three Million, Five Hundred Six Thousand, Five
Hundred Fifty and no/100 Dollars ($3, 506, 550.00).
Complaint, Plaintiffs allege the contract is invalid on the
factual ground it was signed without authority from CIP, and,
upon information and belief, Defendant knew the person
signing the contract was unauthorized to do so. ECF No. 1
¶ 9. Plaintiffs further claim the deposit called for
upon the signing of the contract was not made. Id.
¶ 11. Therefore, there was no consideration given to
support the contract. Also, Harper sought relief on the
ground he is not personally liable under the alleged contract
because he is not a party to the alleged contract and should
not be held individually liable for damages under such
contract were it found to be enforceable as to CIP.
Id. ¶ 12.
the complaint in an action for declaratory judgment seeks in
essence to assert a defense to an impending or threatened
state court action, it is the character of the threatened
action, and not of the defense, which will determine whether
there is federal-question jurisdiction in the District
Court.” Franchise Tax Bd. of Cal. v. Constr.
Laborers Vacation Tr., 463 U.S. 1, 16 n.14 (1983)
(citation omitted) (internal quotation marks omitted). In the
threatened litigation, as well as this one, there is complete
diversity between each plaintiff and Defendant, and the
amount in controversy is in excess of $75, 000.00.
See 28 U.S.C. § 1332. Furthermore, there is a
“case of actual controversy” before this Court.
Id. § 2201. Because of the direct threat of
litigation received by Plaintiffs, they have an objective and
reasonable apprehension of future litigation, which is of
sufficient immediacy and reality, that a declaration of legal
rights “will terminate and afford relief from the
uncertainty, insecurity and controversy giving rise to the
proceeding.” See Centennial Life Ins. Co. v.
Poston, 88 F.3d 255, 256 (4th Cir. 1996). Therefore,
declaratory relief is appropriate for this case. And, the
ability of the Court to grant a default judgment in a
declaratory judgment action regarding rights under a contract
is clear. See Pa. Nat'l Mut. Cas. Ins. Co. v.
Roberts, 668 F.3d 106, 110 (4th Cir. 2012); Hous.
Gen. Ins. Co. v. Moore, 193 F.3d 838, 839 (4th Cir.
light of Defendant's default, Plaintiffs have requested a
declaratory judgment holding the alleged contract between
Defendant and CIP is unenforceable based upon the factual
ground the person signing the contract purportedly on behalf
of CIP lacked the authority to do so, and Defendant knew the
signer of the purported contract was unauthorized to do so.
“The defendant, by his default, 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.”
Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780
(4th Cir. 2001) (internal quotation marks omitted).
Defendant failed to respond to the Complaint, the
well-pleaded allegations of fact set forth in the Complaint
are admitted. Therefore, it is the judgment of this Court
Plaintiffs' request for default judgment is GRANTED, and
the Court DECLARES the purported contract between Defendant
and CIP dated April 15, 2016, is void because the person
signing the contract on behalf of CIP was not authorized to
do so, and Defendant knew the person signing the alleged
contract on behalf of CIP was not authorized to do so.
it is further ORDERED the Clerk is DIRECTED (i) to enter
default judgment in favor of Plaintiffs against Defendant,
pursuant to Fed.R.Civ.P. 55(b)(2); (ii) to send a copy of
this Order to all counsel of record and to the registered