United States District Court, D. Maryland
MEMORANDUM AND ORDER
K. Bredar, Chief Judge.
before the Court are two motions in which Plaintiff requests
default judgments against Paragon International Wealth
Management, Inc. ("Paragon"), James F. Gagliardini,
and Edward Rosenberg. (ECF Nos. 43, 61.) In both motions,
Plaintiff asserts the amount of damages claimed is a sum
certain pursuant to Federal Rule of Civil Procedure 55(b)(1).
If that were so, then it would be appropriate for the Clerk
to enter default judgments for the sum certain. But Plaintiff
is mistaken. A sum certain relates to liquidated damages;
however, the damages Plaintiff is claiming are unliquidated
damages. He has asserted causes of action of common law
fraud, violation of the Racketeer Influenced and Corrupt
Organizations Act ("RICO"), violation of the
Maryland Consumer Protection Act ("MCPA"), trover
and conversion, and violation of "Section 10(b)5 of the
Securities and Exchange act." (Am. Compl., ECF No. 13.)
None of these causes of action has a sum certain attached to
it within the meaning of Rule 55(b)(1).
Rule 8(b)(6), well-pled factual allegations pertaining to
liability are deemed admitted by a defendant who fails to
deny them when served with a complaint, but allegations as to
the amount of damages are not deemed admitted. Thus, although
the Clerk has entered defaults against the three
above-referenced Defendants, the fact of default does not
entitle Plaintiff to have default judgments entered. Rather,
a default judgment may be lawfully entered only
"according to what is proper to be decreed upon the
statements of the bill, assumed to be true." Thomson
v. Wooster, 114 U.S. 104, 113 (1884). '"The
defendant, by his default, admits the plaintiffs well pleaded
allegations of fact, is concluded on those facts by the
judgment, and is barred from contesting on appeal the facts
thus established. . . . The defendant is not held ... to
admit conclusions of law.'" Ryan v. Homecomings
Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting
Nishimatsu Constr. Co., Ltd. v. Houston Nat'l
Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). It is the
court's task, therefore, to "determine whether the
well-pleaded allegations in [plaintiffs] complaint support
the relief sought. ..." Ryan, 253 F.3d at 780.
Mere default "does not in itself warrant the court in
entering a default judgment. There must be a sufficient basis
in the pleadings for the judgment entered."
Nishimatsu, 515 F.2d at 1206; see also DirecTV,
Inc. v. Pernites, 200 Fed.Appx. 257, 258 (4th Cir. 2006)
(per curiam). Moreover, "[a] plaintiffs
assertion of a sum in a complaint does not make the sum
'certain' unless the plaintiff claims liquidated
damages; otherwise, the complaint must be supported by
affidavit or documentary evidence." Monge v.
Portofino Ristorante, 751 F.Supp.2d 789, 793-94 (D. Md.
2010). The Court may also hold a hearing on the request for
default judgment. Fed.R.Civ.P. 55(b)(2) (if sum not certain
or ascertainable through computation, court may hold hearing
to "conduct an accounting, determine the amount of
damages, establish the truth of any allegation by evidence,
or investigate any other matter").
factual allegations in the amended complaint, taken as true
and deemed admitted, indicate various Defendants solicited
money from Plaintiff on repeated occasions for the purpose of
investing in high-value jewelry, to be resold at a profit to
third parties. Plaintiff paid large sums of money for this
purpose, but has not received that for which he bargained.
What jewelry was sent to him was appraised for much less than
the value purportedly assigned to the jewelry by Defendants.
Other jewelry has never been sent to him, and Defendants did
not respond to his requests for refunds. The complaint names
three individuals, Rosenberg, Gagliardini, and Michael Shumak
as principals of Paragon, and alleges that all transactions
occurred through Paragon. While the complaint provides
specific allegations from which one can infer wrongdoing by
Rosenberg and Shumak, it refers only tangentially to
Gagliardini and merely alleges he conspired with the others.
Plaintiffs prayers for relief ask for $1 million in
compensatory damages and an undetermined amount of punitive
damages on the fraud count; "three times the damages
described in [Count I]" on the civil RICO count; $1
million in damages plus costs and attorney's fees on the
MCPA count as well as the trover and conversion count; and
$1, 700, 000 plus interest, costs, and attorney's fees on
the securities law violations.
factual allegations deemed admitted establish common law
fraud by Rosenberg and Paragon. They do not provide a
sufficient basis for assessing liability against Gagliardini,
at least without explanation on how the Court should infer
him to be liable. Additionally, Plaintiff has not provided
briefing that adequately elucidates for the Court the bases
for the other causes of action. Finally, Plaintiffs single
affidavit listing the payments he made to Paragon is
insufficient to permit the Court to calculate an appropriate
award. See, e.g., Paniagua Grp., Inc. v. Hosp.
Specialists, LLC, 183 F.Supp.3d 591, 606 (D.N.J. 2016)
(finding evidence insufficient to sustain Plaintiffs default
judgment motion as to damages where evidence listed
withdrawals from a bank account but failed to cite "any
invoices or other documentary evidence").
properly assess the worth of Plaintiffs requests for default
judgment, it will be necessary for the Court to hold an
evidentiary hearing at which Plaintiff has the opportunity to
present his evidence establishing an entitlement to the
damages he claims. Prior to the hearing, Plaintiff will be
required to brief the Court on the elements of the various
causes of action and the evidence to support each element.
it is hereby ORDERED:
matter is set in for a hearing on August 22, 2019, at 10:00
a.m. in Courtroom 3D, United States Courthouse, 101 West
Lombard Street, Baltimore, Maryland 21201, to receive
evidence pertaining to Plaintiffs motions for default
or before thirty days prior to the hearing, Plaintiff shall
file his prehearing brief, as explained above. Plaintiff
shall serve by mail a copy of his prehearing brief on each
Defendant against whom judgment is sought and shall file
proof of same.
Within seven days of this order's date, Plaintiff shall
serve by mail his motions for default judgment on those
against whom he seeks judgment and shall file proof of same.
Clerk shall send a copy of this memorandum and order to
Paragon, Gagliardini, and Rosenberg.
 The Court presumes the Plaintiff
refers to Rule 10b-5, promulgated pursuant to Section 10(b)
of the ...