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Bea Mountain Mining Corp. v. International Construction & Engineering (Seychelles)

United States District Court, E.D. Virginia, Alexandria Division

April 3, 2018

BEA MOUNTAIN MINING CORPORATION, Plaintiff,
v.
INTERNATIONAL CONSTRUCTION & ENGINEERING (SEYCHELLES), Defendant.

          REPORT & RECOMMENDATION

          Michael S. Nachmanoff, United States Magistrate Judge

         This matter comes before the Court on Plaintiff's Motion for Default Judgment (Dkt. No. 13). Having reviewed the record and pleadings, the undersigned Magistrate Judge recommends entering default judgment in Plaintiff's favor for the reasons that follow.

         I. Background

         On December 1, 2017, Plaintiff Bea Mountain Mining Corporation (“BMMC”) filed a petition to confirm the final arbitral award rendered on January 23, 2017 against Defendant International Construction & Engineering (Seychelles) (“ICE”) under the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards (“Convention”) (Dkt. No. 1). Plaintiff alleges that both parties consented to arbitration regarding the construction of the New Liberty Gold Mine, which is in Liberia. Compl. ¶¶ 9-10, 12-13 (Dkt. No. 1). On December 10, 2012, Plaintiff, “engaged in the business of acquiring, exploring, developing[, ] and putting into production mining projects, ” executed a contract with Defendant for work involving the New Liberty Gold Mine. Id. ¶¶ 17-18. Seven days later, the project commenced. Id. ¶ 18. In September 2014, due to changes to the project and its slow progress, Plaintiff terminated the contract. Id. ¶ 19. In response, on November 30, 2015, Defendant, represented by counsel, submitted a request for arbitration. Id. ¶¶ 21-25, 28.

         On January 23, 2017, the Tribunal dismissed Defendant's claims and issued an award to Plaintiff on its counterclaim in the amount of $6, 990, 626.28, with interest compounded quarterly at a rate of 2 percent until the date of payment, as well as £2, 700, 000 in attorneys' fees and costs. Id. ¶¶ 34, 36-39; Arbitral Award ¶¶ 10.10, 12.30, 14(2)-(3) (Dkt. No. 2-1). Plaintiff has twice demanded payment from Defendant, once on June 14, 2017 and again on July 7, 2017. Compl. ¶ 41; Ex. 5 (Dkt. No. 2-5). Plaintiff now requests that this Court confirm the arbitral award and enter judgment in the amount of $6, 990, 626.28 plus interest at a rate of 2 percent, compounded quarterly, from January 23, 2017 until payment; £2, 700, 000 in fees and costs plus interest at a rate of 2 percent, compounded quarterly, from January 23, 2017 until payment; and the costs of bringing this action. Compl. ¶ 51.

         II. Procedural History

         On December 18, 2017, Plaintiff's process server personally served Defendant through Joseph M. Crane, Jr. (“Mr. Crane”), Defendant's CEO and Managing Director and sole shareholder, pursuant to Federal Rule of Civil Procedure 4(c), (e), and (h). See Crane Decl. ¶ 1 (Dkt. No. 2-2); Register of Directors & Shares at 2-3, 5 (Dkt. No. 2-3); Affidavit of Service (Dkt. No. 9). Defendant did not file a response within 21 days of receipt (i.e. January 8, 2018) (Dkt. Nos. 9-10, 13). On January 23, 2018, the Clerk entered a default against Defendant (Dkt. No. 12). On February 14, 2018, Plaintiff filed this Motion for Default Judgment (Dkt. No. 13).

         III. Service of Process, Jurisdiction, and Venue

         The docket reflects that Defendant has been properly served pursuant to Federal Rule 4(h)(1)(B). See Affidavit of Service (Dkt. No. 9); Pl.'s Mot. for Default J. at 1 (Dkt. No. 13); Connolly Decl. ¶ 7 (Dkt. No. 13-1). As stated in the Complaint and the accompanying documents, Mr. Crane is a resident of Alexandria, Virginia, which is in the Eastern District of Virginia. See Compl. ¶ 4; Register of Directors & Shares at 2-5 (Dkt. No. 2-3).

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and 9 U.S.C. § 203, as this proceeding arises under the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards. Compl. ¶¶ 1, 5. Moreover, the parties agreed that an arbitration decision “may be made an order of any Court of competent jurisdiction.” Id. ¶ 6, at 3; Arbitral Award at 6 (Dkt. No. 2-4). Venue is proper pursuant to 9 U.S.C. § 204 and 28 U.S.C. § 1391 because a substantial part of the events or omissions giving rise to the claim against Defendant occurred within the Eastern District of Virginia where Mr. Crane has his residence, and/or Defendant has assets within this district that are subject to enforcement of a final judgment. See Compl. ¶¶ 7, 49; Bd. of Trs., Sheet Metal Workers Nat'l Pens. Fund v. McD Metals, Inc., 964 F.Supp. 1040, 1045 (E.D. Va. 1997).

         IV. Legal Standard

         Default judgment is appropriate if the well-pled allegations of the complaint establish that the plaintiff is entitled to relief and the defendant has failed to plead or defend within the time frame set out in the rules. Fed.R.Civ.P. 55; see Music City Music v. Alfa Foods, Ltd., 616 F.Supp. 1001, 1002 (E.D. Va. 1985). By defaulting, the defendant admits the plaintiff's well-pled allegations of fact, which then provide the basis for judgment. See Partington v. Am. Int'l Specialty Lines Ins. Co., 443 F.3d 334, 341 (4th Cir. 2006); Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Nevertheless, “‘[a] court confronted with a motion for default judgment is required to exercise sound judicial discretion in determining whether the judgment should be entered, and the moving party is not entitled to default judgment as a matter of right.'” ReadyCap Lending, LLC v. Servicemaster Prof'l Cleaning, Inc., No. 2:15-cv-451, 2016 WL 1714877, at *2 (E.D. Va. Apr. 12, 2016) (quoting EMI April Music, Inc. v. White, 618 F.Supp.2d 497, 505 (E.D. Va. 2009)). Here, because Defendant has not answered or otherwise timely responded, the well-pled allegations of fact contained in the Complaint are deemed to be admitted.

         V. Analysis

         Having examined the record, the Magistrate Judge finds that the well-pled allegations of fact contained in the Complaint-and supported by Plaintiff's Motion for Default Judgment and declarations-establish that Plaintiff received an arbitral award against Defendant, which Defendant has yet to pay and which is subject to enforcement in this Court. See ...


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