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Medline Industries, Inc. v. Fiesta Park Healthcare, LLC

United States District Court, D. New Mexico

January 16, 2020

FIESTA PARK HEALTHCARE, LLC, d/b/a The Medical Resort at Fiesta Park; WW HEALTHCARE, LLC, d/b/a Princeton Place; & REHAB SUITES AT LAS ESTANCIAS, LLC, d/b/a The Rio at Las Estancias, Defendants.



         THIS MATTER comes before me pursuant to the Court's Order of Reference (doc. 15), referring Plaintiff's Motion for Entry of Default Judgment (doc. 13) to me for analysis, proposed findings, and recommended disposition. Having reviewed the motion and Plaintiff's Complaint (doc. 1), I recommend that the Court DENY Plaintiff's Motion and DISMISS Plaintiff's Complaint WITHOUT PREJUDICE.

         I. Background

         On October 15, 2019, Plaintiff filed a Complaint for Money Owed against all Defendants. Doc. 1. Plaintiff alleges that it “provided goods and medical supplies to Defendants.” Id. at 2. Plaintiff alleges that Defendant Fiesta Park Healthcare, LLC owes Plaintiff $81, 317.97; that Defendant WW Healthcare, LLC owes Plaintiff $138, 063.23; and that Defendant Rehab Suites at Las Estancias, LLC owes Plaintiff $91, 009.88. Id.

         All Defendants were served by October 30, 2019. Docs. 7-9. Under Federal Rule of Civil Procedure 12(a)(1)(A)(i), Defendants were required to answer Plaintiff's complaint by November 20, 2019. On December 3, 2019, having received no answer from any Defendant, Plaintiff requested the clerk's entry of default. Doc. 10. The clerk of court entered default on December 23, 2019. Doc. 11. Plaintiff then filed this motion for default judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). Doc. 13.

         II. Legal Standards

         Entry of default judgment “is committed to the sound discretion of the district court.” Tripodi v. Welch, 810 F.3d 761, 764 (10th Cir. 2016). However, a default judgment may be vacated if the pleadings are insufficient to support it. Bixler v. Foster, 596 F.3d 751, 762 (10th Cir. 2010). Before entering default judgment, the Court must make a threshold determination that it has jurisdiction over Defendants. Dennis Garberg & Assocs., Inc. v. Pack-Tech Int'l Corp., 115 F.3d 767, 771 (10th Cir. 1997).

         “After a default judgment is handed down, a defendant admits to a complaint's well-pleaded facts and forfeits his or her ability to contest those facts.” Tripodi, 810 F.3d at 764 (citation omitted). However, “a party in default does not admit mere conclusions of law.” Bixler, 596 F.3d at 762 (citation omitted). The Court must consider whether the well-pleaded facts constitute a legitimate cause of action. Id. The Court may not enter default judgment on claims that are subject to dismissal under Federal Rule of Civil Procedure 12(b)(6). Bixler, 596 F.3d at 762.

         Additionally, the Court may not enter default judgment for the amount of damages claimed without a hearing, unless the damages are liquidated or capable of mathematical calculation. Venable v. Haislip, 721 F.2d 297, 300 (10th Cir. 1983).

         III. Analysis

         As a threshold matter, I note that the Court has jurisdiction over Defendants. The Court has personal jurisdiction, as all the Defendants are entities incorporated in New Mexico. See Daimler AG v. Bauman, 571 U.S. 117, 137 (2014). The Court has subject matter jurisdiction under 28 U.S.C. § 1332, which requires complete diversity and an amount in controversy exceeding $75, 000. Symes v. Harris, 472 F.3d 754, 758 (10th Cir. 2006). Plaintiff has its place of incorporation and principal place of business in Illinois. All Defendants have their place of incorporation and principal place of business in New Mexico. Doc. 1 at 2. Thus, complete diversity of citizenship exists between the parties. Plaintiff claims it is owed an amount over $75, 000 by each Defendant, thus the requisite amount in controversy is met.

         Plaintiff's complaint sounds in contract. The basic elements of a breach of contract claim are (1) a valid contract, (2) breach of the contract, and (3) damages. Alderete v. City of Albuquerque, 2015 WL 1143085, at *1 (N.M. Ct. App. Feb. 23, 2015) (unpublished) (citing Constr. Contracting & Mgmt., Inc. v. McConnell, 815 P.2d 1161 (N.M. 1991)). A valid contract exists where there is offer, acceptance, consideration, and mutual assent. Heye v. Am. Golf Corp., Inc., 80 P.3d 495, 498 (N.M. Ct. App. 2003) (citations omitted). Acceptance requires a “manifestation of unconditional agreement to all of the terms of the offer and an intention to be bound thereby.” Stevenson v. Louis Dreyfus Corp., 811 P.2d 1308, 1310 (N.M. 1991) (citation omitted). Under New Mexico's Statute of Frauds, a contract for the sale of goods of $500 or more is not enforceable “unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought….” NMSA 1978, § 55-2-201(1). Additionally, a contract for the sale of goods must specify a quantity term. Elephant Butte Resort Marina, Inc. v. Wooldridge, 694 P.2d 1351, 1354 (N.M. 1985) (citing NMSA 1978, § 55-2-201(1)).

         Plaintiff does not attach a contract to its complaint or otherwise allege the existence of a written contract. See generally doc. 1. None of the documents attached by Plaintiff are signed by any Defendant. According to the invoices attached by Plaintiff, many of the goods delivered to Defendants were above $500, thus writings signed by Defendants are required. A contract that fails to meet the requirement of a signed writing may nonetheless be enforceable “with respect to goods … which have been received and accepted.” Id. § 55-2-201(3)(c). However, Plaintiff fails to identify what goods were received by Defendants and in what quantity, as the invoices provide only internal reference numbers. Plaintiff also fails to allege whether the goods were accepted by Defendants. Thus, Plaintiff has failed to adequately allege a valid contract.

         As to breach, Plaintiff merely asserts that Defendants owe Plaintiff certain sums of money. Even assuming that Plaintiff's provision of “goods and medical supplies” to Defendants constitutes a valid contract, Plaintiff has failed to establish that Defendants breached any specific term of the contract. Plaintiff has not provided any indication of the terms of payment agreed between the parties, including the due date for any payment. In short, neither ...

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