United States District Court, D. Maryland
NURSE NEXT DOOR HOME HEALTHCARE SERVICES (USA), INC., Plaintiff,
FOUR GLOVES, INC., et al., Defendants.
Xinis United States District Judge.
before the Court are Plaintiff Nurse Next Door Home
Healthcare Services (USA), Inc.'s two Motions for Default
Judgment. ECF Nos. 10, 18. For the following reasons,
Plaintiff's first Motion for Default Judgment (ECF No.
10) is DENIED as moot, and the second Motion for Default
Judgment (ECF No. 18) is GRANTED IN PART and DENIED IN PART.
Nurse Next Door Home Healthcare Services (USA), Inc.
(“Nurse Next Door”) is a Washington corporation,
offering “franchise agreements to qualified franchisees
who in turn provide comprehensive home medical services and
supplemental healthcare staff to home care and institutional
clients.” ECF No. 1 ¶ 8. Nurse Next Door entered
into a Franchise Agreement with Defendant Four Gloves, Inc.
(“Four Gloves”) on April 28, 2016, obligating
Four Gloves “to operate a Nurse Next Door-branded home
nursing and health care business . . . in and adjacent to
Prince George's County.” Id. ¶ 15.
Defendant Kenneth Stokes signed the Agreement as the
“authorized agent” for Four Gloves. Id.
On the same day, Stokes also executed a guaranty agreement
with Nurse Next Door for Four Gloves in which he insured
performance under the Franchise Agreement. Id.
¶ 17; see also ECF No.1-1 at Schedule C.
Franchise Agreement provided Four Gloves with Nurse Next
Door's training, planning, and technology resources in
exchange for an Initial Franchise fee (“initial
fee”), a Technology Start-Up fee (“start-up
fee”), and royalties. ECF No. 1 ¶¶ 18-19, 23.
Shortly after Four Gloves paid the initial and start-up fees
totaling $55, 000, Nurse Next Door refunded the same amount
as per a supplemental Franchise Disclosure Document. ECF No.
1 ¶ 21-22; ECF No. 1-2 at 9. The parties agreed that
once Four Gloves opened its doors for business, Four Gloves
would repay the same franchise fees to Nurse Next Door. ECF
No. 1 ¶ 22.
fees in question became due on September 30, 2016.
Id. ¶ 25. However, Four Gloves never repaid the
fees, and in November 2017, Nurse Next Door provided Four
Gloves and Stokes written notice of the failure to pay.
Id. ¶ 26. Four Gloves also missed scheduled
royalty fee payments required under the Agreement.
Id. ¶ 26; ECF No. 1-1 § 6(a)(i-ii). To the
best of Plaintiff's knowledge, Four Gloves has yet to
open and operate the Prince George's Franchise. ECF No. 1
Next Door initially filed suit in Washington State pursuant
to the Franchise Agreement's forum selection clause.
However, Defendants evaded service of process in Washington
state,  leaving Nurse Next Door little option but
to bring this case in this Court where the Defendants are
domiciled. The Complaint asserts claims against Four Gloves
for breach of contract and against Stokes for breach of his
guaranty agreement. ECF No. 1. After a protracted service
history in this Court, Defendants have failed to answer or
otherwise respond to the Complaint.
Standard of Review
governs default judgments entered “[w]hen a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend, and that failure is
shown by affidavit or otherwise.” Fed.R.Civ.P. 55(a).
The Court may enter default judgment at the plaintiff's
request and with notice to the defaulting party. Fed.R.Civ.P.
55(b)(2). Although courts maintain “a strong policy
that cases be decided on the merits, ” United
States v. Schaffer Equip. Co., 11 F.3d 450, 453 (4th
Cir. 1993), default judgment is appropriate when the
“adversary process has been halted because of an
essentially unresponsive party.” S.E.C. v.
Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005).
deciding whether to grant default judgment, the Court takes
as true the well-pleaded factual allegations of the
complaint, other than those pertaining to damages. Ryan
v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.
2001); see Fed. R. Civ. P. 8(b)(6) (“An
allegation - other than one relating to the amount of damages
- is admitted if a responsive pleading is required and the
allegation is not denied.”). The Court applies the
pleading standards announced in Ashcroft v. Iqbal,
556 U.S. 662 (2009), and Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007), in this context. See
Balt. Line Handling Co. v. Brophy, 771 F.Supp.2d 531,
544 (D. Md. 2011). Accordingly, where a complaint avers bare
legal conclusions or “naked assertion[s] devoid of
further factual enhancement, ” the Court will not enter
default judgment. Russell v. Railey, No. DKC
08-2468, 2012 WL 1190972, at *3 (D. Md. Apr. 9, 2012)
(quoting Iqbal, 556 U.S. at 678); see, e.g.,
Balt. Line Handling Co., 771 F.Supp.2d at 545
(“The record lacks any specific allegations of fact
that ‘show' why those conclusions are
complaint pleads sufficient facts from which the court may
find liability, the Court next turns to damages. See
Ryan, 253 F.3d at 780-81. Damages are circumscribed by
that which is requested in the complaint. See Fed.
R. Civ. P. 54(c) (“A default judgment must not differ
in kind from, or exceed in amount, what is demanded in the
pleadings.”). The damages request must be supported by
evidence introduced either at a hearing or by affidavit or
other records. See id.; Lawbaugh, 359
F.Supp.2d at 422.
Next Door moves for default judgment against Four Gloves for
breach of contract and against Stokes for breach of guaranty.
ECF No. 18. “Federal courts sitting in diversity apply
the law of the state in which the court is located, including
the forum state's choice of law rules.” H &
M Co. v. Tech. Heat Transfer Servs., Inc., No.
TDC-14-1518, 2015 WL 1472000, at *2 (D. Md. Mar. 30, 2015)
(citing Colgan Air, Inc. v. Raytheon Aircraft Co.,
507 F.3d 270, 275 (4th Cir. 2007)). In Maryland, courts
typically respect contractual choice of law provisions.
See Cunningham v. Feinberg, 107 A.3d 1194, 1204 (Md.
2015) (internal citations omitted). Pursuant to the choice of
law provision in the parties' Franchise Agreement (ECF
No. 1-1 § 19(h)), this Court applies the substantive law
of Washington state.