United States District Court, E.D. Virginia, Alexandria Division
REPORT AND RECOMMENDATION
THERESA CARROLL BUCHANAN UNITED STATES MAGISTRATE JUDGE
MATTER comes before the Court on Evolution Strategies,
LLC's ("Plaintiff) Motion for Default Judgment
against Unlimited Marketing Enterprises, Inc.
("Defendant") (Dkt. II). For the reasons articulated
below, the undersigned U.S. Magistrate Judge recommends that
Plaintiffs Motion for Default Judgment be GRANTED.
15, 2019, Plaintiff filed this lawsuit alleging causes of
action for breach of contract, actual fraud, and constructive
fraud. (See Compl. ¶¶ 19-38.) After
Defendant failed to enter an appearance or respond in any
fashion, the Court issued an Order on August 1, 2019,
ordering that Plaintiff obtain an entry of default from the
clerk pursuant to Federal Rule of Civil Procedure 55(a).
(Dkt. 8.) The Order further required Plaintiff to file a
motion for default judgment and notice a hearing before the
undersigned on Friday, August 30, 2019. (Id.)
Plaintiff complied by requesting the clerk's entry of
default on August 7, 2019 (Dkt. 9), and the clerk entered
Defendant's default on August 19, 2019 (Dkt. 10).
Plaintiff then filed the instant Motion for Default Judgment
and noticed the hearing for Friday, August 30, 2019. (Dkts.
11-12.) Representatives for Defendant failed to appear or
otherwise respond at the hearing, and the Court took this
matter under advisement for the undersigned to issue this
Report and Recommendation.
Jurisdiction and Venue
the Court can render default judgment, it must have
subject-matter jurisdiction and personal jurisdiction over
the defaulting party, and venue must be proper. First, the
Court has subject-matter jurisdiction over this action
pursuant to 28 U.S.C. § 1332(a)(1). A federal court has
subject-matter jurisdiction when a dispute involves citizens
of different states and the amount in controversy exceeds
$75, 000.00, exclusive of interest and costs. See 28
U.S.C. § 1332(a)(1) (2018). Here, Plaintiff is a
Virginia limited liability company whose sole member and
president is a resident of Virginia. (Compl. ¶ 1; Hyman
Decl. ¶ 2.) Defendant is a Florida corporation with its
principal place of business in Sanford, Florida. (Compl.
¶ 2.) Accordingly, Plaintiff is a citizen of Virginia
and Defendant is a citizen of Florida for purposes of
diversity jurisdiction, and there is complete diversity
between the parties. Furthermore, the amount in controversy
exceeds $75, 000 because Plaintiff, in its Complaint, sought
over one million dollars in monetary relief, exclusive of
interest, attorneys' fees, and costs. (See
Compl. at 8.) Now, at the default judgment stage, Plaintiff
seeks $949, 883.00 in money damages, exclusive of interest,
attorneys' fees, and costs. (See Mem. Supp. at
the Court has personal jurisdiction over Defendant. The
standards of federal due process and the forum state's
long-arm statute must be satisfied for a federal court to
have personal jurisdiction over a party. See Tire
Eng'g & Distribution, LLC v. Shandong Linglong Rubber
Co., 682 F.3d 292, 301 (4th Cir. 2012). Federal due
process permits personal jurisdiction where a defendant has
"certain minimum contacts with [the forum state] such
that the maintenance of the suit does not offend
'traditional notions of fair play and substantial
justice.'" Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
Virginia's long-arm statute, Virginia Code section
8.01-328.1, provides for personal jurisdiction to the extent
that federal due process permits. ePlus Tech., Inc. v.
Aboud, 313 F.3d 166, 176 (4th Cir. 2002). With federal
due process and Virginia's long-arm statute requiring the
same standard, essentially only one inquiry is required.
See Id. Furthermore, the inquiry requires the Court
to either have specific jurisdiction, which is achieved when
the defendant's contacts with the state give rise to the
basis of the lawsuit, or general jurisdiction, which requires
that the defendant have "continuous and systematic"
activities in the forum state. Tire Eng'g &
Distribution, 682 F.3d at 301 (internal citation
bases under Virginia's long-arm statute provide for
specific personal jurisdiction over Defendant in this case.
Virginia has personal jurisdiction over a party (1)
"[transacting any business" or (2)
"[c]ontracting to supply services or things" in
Virginia. Va. Code Ann. § 8.01-328.l(A)(1)-(2) (2019).
Here, Defendant contracted to supply services to Plaintiff, a
Virginia limited liability company. (See Compl.
¶ 1; Hyman Decl., Ex. A.) Therefore, Defendant (1)
transacted business and (2) contracted to supply services in
Virginia, satisfying the Commonwealth's long-arm statute.
federal courts have personal jurisdiction over a party that
contractually consented to it or waived it pursuant to a
valid forum selection clause. See W.L. Gore &
Assocs., Inc. v. Medtronic, Inc., U.S.
F.Supp.2d 667, 671 (E.D. Va. 2011). Here, Defendant consented
to the exclusive jurisdiction of Virginia courts to
adjudicate a dispute about the contract. (Hyman Decl., Ex. A
§ 18, at 6.) Section 18 of the parties' contract
provides that "suit to enforce any provision of this
Agreement may be brought in a court of competent jurisdiction
within the Commonwealth of Virginia, and for this purpose the
Parties hereby expressly and irrevocably consent to the
jurisdiction of said court." (Id.) Because
Virginia's long-arm statute is satisfied, and Defendant
consented to Virginia's jurisdiction, the undersigned
finds that the Court has personal jurisdiction over
Plaintiff filed this lawsuit in the proper venue. Venue is
proper in a federal judicial district in which a substantial
part of the events or omissions giving rise to the action
occurred. 28 U.S.C. § 1391(b)(2) (2018). Here, venue is
proper for many of the same reasons why personal jurisdiction
over Defendant is proper. Defendant transacted business with
a company incorporated under Virginia law and located in
Alexandria, Virginia, which is within the Eastern District of
Virginia. (Compl. ¶¶ 1, 5.) As such,
Defendant's work (or lack thereof) pursuant to the
parties' contract constitutes a substantial part of the
events or omissions giving rise to this litigation.
Accordingly, the undersigned finds that venue is proper.
Service of Process
the Court can render default judgment, it must be satisfied
that the defaulting party has been properly served. Under
Federal Rule of Civil Procedure 4(h)(1) and (e)(1), a
plaintiff can serve a corporation pursuant to the state's
law in which the federal district court is located.
See Fed. R. Civ. P. 4(e)(1), (h)(1). Under Virginia
Code sections 8.01-329(A) and (B), a plaintiff can serve a
nonresident corporation via the Secretary of the Commonwealth
by filing an affidavit stating that the corporation to be
served is a nonresident and setting forth the
corporation's last-known address. See Va. Code
Ann. § 8.01-329(A)-(B) (2019). The Secretary is then
charged with the duty to send service of process by certified
mail to the defendant's last-known address, including the
notice of service, a copy of the process or notice, and a
copy of the affidavit. Id. § 8.01-329(C).
Service is deemed effective on the date the plaintiff served
the Secretary. Id.
23, 2019, Plaintiffs counsel submitted to the Secretary of
the Commonwealth of Virginia an Affidavit for Service of
Process on the Secretary of the Commonwealth, along with the
summons, complaint, and attachments, denoting that Defendant
was a nonresident foreign corporation. (Bustos Decl. ¶
8; Dkt. 7.) Pursuant to Virginia Code section 8.01-329(C)(3),
the Secretary completed a Certificate of Compliance,
certifying that on June 5, 2019, the Secretary forwarded the
affidavit, summons, and complaint to Defendant by certified
mail, return receipt requested. (Bustos Decl. ¶ 9; Dkt.
7.) Plaintiff then filed a copy of the affidavit and the
Secretary's Certificate of Compliance with the Court.
(Bustos Decl. ¶ 10; Dkt. 7.) Accordingly, the
undersigned finds that Defendant received proper service of
Findings of Fact
full review of the pleadings and record in this case, the
undersigned finds that Plaintiff has established the
if a limited liability company located in Alexandria,
Virginia and organized under Virginia law. (Compl. ¶ 1;
Hyman Decl. ¶ 2.) Ellis Hyman is Plaintiffs sole member
and president, and he is resident of Virginia. (Compl. ¶
1; Hyman Decl. ¶ 2.) Plaintiffs services include placing
mass telephone calls on behalf of political campaigns,
political party committees, and nonprofit organizations.
(Compl. ¶ 1.) Defendant is a Florida corporation that
provides equipment and personnel needed to place mass call
campaigns. (Id. ¶ 2.) On September 5, 2016,
Plaintiff and Defendant entered into a contract ...