United States District Court, D. Maryland
THE L. WARNER COMPANIES, INC., et al., Plaintiffs,
BORN TO PLAY AGENCY, EIRL, et al., Defendants.
REPORT AND RECOMMENDATION
P. Gesner Chief United States Magistrate Judge.
above-referenced case was referred to the undersigned to
review plaintiffs' Motion for Default Judgment and to
make recommendations concerning damages, pursuant to 28
U.S.C. § 636 and Local Rules 301 and 302. (ECF No. 17.)
Currently pending is plaintiffs' Motion for Default
Judgment (“Motion”) (ECF No. 12). Plaintiffs have
also submitted a Supplemental Brief in Support of
Plaintiffs' Motion for Entry of Default Judgment
(“Supplemental Brief”) (ECF No. 19) and an
Additional Supplemental Brief in Support of Plaintiffs'
Motion for a Default Judgment (“Second Supplemental
Brief”) (ECF No. 23). Defendants have not filed any
response. No hearing is necessary. See Fed.R.Civ.P.
55(b)(2); Loc. R. 105.6. For the reasons discussed below, I
respectfully recommend that plaintiffs' Motion (ECF No.
12) be GRANTED in part and DENIED in part and that relief be
awarded as set forth herein.
The L. Warner Companies, Inc. (“TWC”) and TWC
Baseball Holdings, LLC (“TWCBH”) (collectively,
“plaintiffs”) filed their Complaint against
defendants Born to Play Agency, EIRL (“Born to
Play”) and Edgar Robinson Mercedes
“defendants”) on June 1, 2018. (ECF No. 1).
Defendants were served with process on July 16, 2018. (ECF
No. 7). Neither defendant has responded to the Complaint.
Accordingly, the Clerk of Court entered an Order of Default
against defendants on September 11, 2018. (ECF No. 11).
filed the pending Motion on October 4, 2018. (ECF No. 12). On
December 19, 2018, I requested further information about the
applicable law and damages from plaintiffs. (ECF No. 18).
Plaintiffs filed a Supplemental Brief in support of their
Motion on January 25, 2019. (ECF No. 19). On March 20, 2019,
I asked plaintiffs to submit a statement of fees and costs
along with an affidavit from counsel in support of their
request for attorneys' fees and evidence in support of
their request for prejudgment interest. (ECF No. 22).
Plaintiffs filed a Second Supplemental Brief in support of
their Motion on April 4, 2019. (ECF No. 23).
PLAINTIFF'S FACTUAL ALLEGATIONS
common set of facts supports each of the causes of action set
forth in plaintiff's Complaint. (ECF No. 1.) By virtue of
the clerk's entry of default, the court accepts as true
the well-pleaded factual allegations in the complaint as to
liability. See Ryan v. Homecomings Fin. Network, 253
F.3d 778, 780-81 (4th Cir. 2001).
a full service financial benefit and sports management
consulting firm. (ECF No. 1 at ¶ 12). TWCBH is a sister
company of TWC that provides sports management and
entertainment consulting and advisory services. (Id.
at ¶ 13). Both plaintiffs are owned by Lee W. Warner
(“Warner”), who also serves as CEO and Chairman
of both companies. (Id. at ¶ 14). In the fall
of 2013, Warner met defendant Mercedes, the principal and
owner of Born to Play, a baseball training club
(“Club”) located in the Dominican Republic that
develops athletes (“Club Athletes”) and places
Club Athletes with Major League Baseball (“MLB”)
teams. (Id. at ¶¶ 15- 17). In April of
2014, Mercedes offered Warner an opportunity to gain access
to his Club Athletes in exchange for a $100, 000 loan
collateralized by Mercedes' future earnings and
personally guaranteed by Mercedes. (Id. at ¶
18, 2014, TWCBH entered into a Consulting Agreement with
defendants and agreed to advance $100, 000 to defendants in
the form of a loan to cover Club expenses. (Id. at
¶¶ 19-20). In exchange, defendants granted a right
of first refusal to TWCBH to be “the exclusive
worldwide professional and marketing agency for Club
Athletes, including but not limited to for Major League
Baseball.” (Id. at ¶ 21). Defendants also
agreed that they would not “sell, transfer, assign or
otherwise utilize the Player Rights/Club Athletes without the
prior written consent of TWCBH.” (Id. at
¶ 23). TWCBH would also receive compensation for each
player that signed with Born to Play during the term of the
agreement or twenty-four months after the expiration of the
term. (Id. at ¶ 25). TWCBH would receive
accrued commissions on a monthly basis “as long as
commissions are earned.” (Id.) Finally,
defendants agreed that, during the term of the Consulting
Agreement and for one year following the termination or
expiration of the agreement, they would not interfere with
any client of TWCBH arising from the parties'
relationship under the Consulting Agreement. (Id. at
¶ 26). On June 18, 2014, TWC entered into an ancillary
Referral Fee Agreement with Born to Play that set forth the
percentage allocation between the parties for all fees
received directly from Club Athletes. (ECF No. 12-2 at 6).
20, 2014, plaintiffs wired $100, 000 to a bank account in the
Dominican Republic beneficially owned by Mercedes. (ECF No. 1
at ¶ 28). From late 2014 until the summer of 2016,
Mercedes represented to Warner that neither Mercedes nor Born
to Play received sufficient funds to repay the loan or
accrued commissions. (Id. at ¶ 29). In
mid-2015, Mercedes informed Warner that he was expecting a
large payment from a player, Yuniel Ramirez Arrieta
(“Arrieta”), who had been signed to the Miami
Marlins. (Id. at ¶ 32). Mercedes later informed
Warner that Arrieta had only received half of his expected
signing bonus. (Id.) Warner relied on Mercedes'
representations that defendants would fulfill their
obligations, but that they required more time to secure
funds, and, on May 5, 2015, TWCBH renewed the Consulting
Agreement. (Id. at ¶ 33). TWCBH renewed the
Agreement again on May 5, 2016. (Id. at ¶ 35).
later learned that, contrary to Mercedes'
representations, Mercedes was personally involved in signing
multiple Club Athletes to MLB teams, including Yoenis
Cespedes in a trade to the New York Mets, Arrieta to the
Miami Marlins, Luis Roberto Moirán to the Chicago
White Sox, Hector Mendoza to the St. Louis Cardinals, Elian
Rodriguez, and Jose Betances. (Id. at ¶ 36).
Defendants did not obtain plaintiffs consent for any of these
actions. (Id. at ¶ 38). TWCBH did not receive
any commissions from defendants or repayment of the loan.
(Id. at ¶¶ 25, 40).
LEGAL STANDARD FOR ENTRY OF DEFAULT
reviewing a motion for default judgment, the court accepts as
true the well-pleaded factual allegations in the complaint as
to liability. Ryan v. Homecomings Fin. Network, 253
F.3d 778, 780-81 (4th Cir. 2001). It remains for the court,
however, to determine whether these unchallenged factual
allegations constitute a legitimate cause of action.
Id. If the court determines that liability is
established, the court must then determine the appropriate
amount of damages. Id. The court does not accept
factual allegations regarding damages as true, but rather
must make an independent determination regarding such
allegations. See, e.g., Int'l Painters &
Allied Trades Indus. Pension Fund v. Capital Restoration
& Painting Co., 919 F.Supp.2d 680, 684 (D. Md. 2013)
(citing S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421
(D. Md. 2005)).
the court may conduct an evidentiary hearing to determine
damages, it is not required to do so; it may rely instead on
affidavits or documentary evidence in the record to determine
the appropriate sum.” Id. (citing Monge v.
Portofino Ristorante, 751 F.Supp.2d 789, 794-95 (D. Md.
2010) (collecting cases); 10A Charles A. Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice and Procedure
§ 2688 (3d ed. Supp. 2010)).
their Complaint, plaintiffs set forth seven causes of action
against defendants: (1) common law fraud/fraud in the
inducement; (2) breach of contract; (3) intentional breach of
the implied covenant of good faith and fair dealing; (4)
repayment of the loan; (5) unjust enrichment; (6) tortious
interference with prospective business relationships; and (7)
accounting. (ECF No. 1 at 10-17). Plaintiffs now seek $100,
000 in compensatory damages and $100, 000 in liquidated
damages, along with interest, costs and attorneys' fees
on their breach of contract claim. (ECF No. 19 at 4).
Alternatively, plaintiffs ask for $100, 000 in compensatory
damages and $300, 000 in punitive damages for their fraud
their Motion, plaintiffs cited to Maryland state law in
support of their fraud, breach of contract, and unjust
enrichment claims. (ECF No. 12-2 at 9-13). Section 8 of the
Consulting Agreement, entitled “Governing Law, ”
states, however, that “This Agreement shall be
construed and enforced in accordance with the laws of the
Dominican Republic, without regard to the conflict of laws or
choice of law provisions.” (ECF No. 1-2 at 4).
Accordingly, I asked plaintiffs to provide relevant case law
in support of their claims from the Dominican Republic and,
if plaintiffs maintained that Maryland law governed the case,
to provide case law in support of that position. (ECF No. 18
at 1). In their Supplemental Brief, plaintiffs provided
authority from the Dominican Republic in support of their
breach of contract claim and did not dispute that the laws of
the Dominican Republic govern the case. (ECF No. 19 at 4-5).
Alternatively, plaintiffs asked for damages for fraud in the
inducement, and provided Maryland authority to support their
claim, but did not provide any argument or authority as to
why Maryland law should govern instead of the laws of the
Dominican Republic. (ECF No. 19 at 6-8).
support of their request for damages on their breach of
contract claim, plaintiffs have provided the court with an
affidavit from Oliver Peña Veras, an attorney admitted
to practice law before the courts of the Dominican Republic,
with over fifteen years of experience practicing commercial
litigation in the Dominican Republic. (ECF No. 19-1 at 10).
Mr. Veras stated that the “Dominican Republic is a
civil law jurisdiction and therefore, legal practitioners and
judges rely on statutory provisions such as rules and
regulations, as opposed to case law for purposes of
substantiating the legal basis of their arguments and form
[sic] their decisions.” (ECF No. 19-1 at 11). Mr. Veras
further stated that “[u]nder the laws of the Dominican
Republic, an agreement is considered to be the law between
the parties. Consequently, the provisions of the agreement
must be enforced by the courts unless there is proof that ...