United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
M. YANDLE United States District Judge.
the Court are Plaintiff Air Energy Global, Inc.'s motions
for default judgment as to Defendants Napoleon Grier
(“Grier”) and Napoleon Grier Enterprises, Inc.
(“NGE”) (Doc. 212), Susette McDaniel Harris a/k/a
Jade Harris (“Harris”) (Doc. 251), Benjamin
Privett (“Privett”) (Doc. 252), and Petrash
Capital, LLC (“Petrash”) (Doc. 253). A hearing
was held on January 28, 2015 to determine damages. For the
following reasons, Plaintiff's motions are GRANTED.
filed this action alleging that Defendants breached a
contract whereby the defendants were to obtain financing for
a business opportunity on behalf of AEG (see Doc.
57). AEG alleges that, pursuant to the contract, AEG
wire-transferred a $1, 000, 000.00 funding fee to a specified
bank account. A “Closing Agreement” was to be
created within two to five days following the transfer and
funds in the amount of $10, 000, 000.00 were to be made
available to AEG. However, the funds were never made
available to AEG. AEG alleges that it was unable to pursue a
business deal because it did not receive the funding it had
contracted for. AEG further alleges that it never received a
refund of the $1, 000, 000.00 funding fee. AEG later learned
from bank records that the funding fee was divvied up among
the defendants or paid out on their behalf and at their
seeks to recover the $1, 000, 000.00 funding fee
(“Funding Fee”); compensation for the loss of its
business opportunity which was to have been funded by the
financing to be made available by the defendants; and a
refund of and interest on the Funding Fee. Regarding the RICO
claim, AEG also seeks to recover treble damages and the costs
of suit, including reasonable attorneys' fees.
served with process, the defendants failed to plead or
otherwise defend this action (Docs. 78, 80, 81, 96). As a
result, on July 22, 2013 and September 12, 2013, the Clerk of
Court entered default against Defendants pursuant to Rule
55(a) of the Federal Rules of Civil Procedure (see
Docs. 91, 101). Following the Clerk's Entry of Default,
AEG moved for default judgment against the defendants.
Pursuant to Rule 55.1(b), copies of AEG's Motions for
Entry of Default Judgment were mailed to each named defendant
at his or her last known address.
January 28, 2015, the Court held a hearing to determine the
amount of damages pursuant to Rule 55(b)(2) of the Federal
Rules of Civil Procedure. Following the hearing, the Court
permitted AEG to supplement its motions with a computation of
damages and/or any further legal authority (Doc. 271). AEG
provided a supplemental memorandum in support on February 11,
2015 (Doc. 278). In the supplemental memorandum, AEG seeks
the following damages: (1) return of the $1, 000, 000.00
Funding Fee plus prejudgment interest at the rate of seven
percent (7%) per year; (2) the $10, 000, 000.00 in loan
funding sought from Defendants Grier and NGE plus an award of
prejudgment interest on the $10, 000, 000.00 at the rate of
five percent (5%) per year pursuant to the Illinois Interest
Act, 815 Ill. Comp. Stat. 205/2; (3) unspecified damages for
loss of business opportunity; and (4) treble damages and
attorneys' fees pursuant to 18 U.S.C. § 1964(c)
the Federal Rules of Civil Procedure, a defendant must file
its answer “within 21 days after being served with
summons and complaint.” Fed.R.Civ.P. 8(a)(1)(A)(i). A
defendant who fails to do may be found in default under
Federal Rule of Civil Procedure 55(a). It is in the district
court's discretion whether to enter default judgment.
O'Brien v. R.J. O'Brien & Assocs., Inc.,
998 F.2d 1394, 1398 (7th Cir. 1993). Default judgment
establishes, as a matter of law, that a defendant is liable
to the plaintiff on each cause of action alleged in the
complaint. United States v. Di Mucci, 879 F.2d 1488,
1497 (7th Cir. 1989).
defendant is found to be in default, all factual allegations
in the complaint are deemed admitted and not subject to
challenge. Black v. Lane, 22 F.3d 1395, 1399 (7th
Cir. 1994). However, allegations in the complaint relating to
the amount of damages are not deemed admitted. Dundee
Cement Co. v. Howard Pipe & Concrete Prods., 722
F.2d 1319, 1323 (7th Cir. 1983); see also
Fed.R.Civ.P. 8(b)(6). The court may conduct hearings when it
is necessary to perform an accounting, ascertain damages,
“establish the truth of any allegation by evidence,
” or investigate any other matter. Fed.R.Civ.P.
55(b)(2)(A)-(D). The plaintiff's complaint provides a
ceiling for available remedies and “a default judgment
must not differ in kind from, or exceed in amount, what is
demanded in the pleadings.” Fed. R. Civ.P. 54(c).
during the hearing on Plaintiff's motions for default
judgment, AEG President, Virgil Straeter, testified that AEG
had a business plan with projected earnings based on the $10,
000, 000 financing negotiated with the defendants.
Specifically, AEG offered into evidence exhibits along with
an affidavit from Robert A.H. Brunet, President of Biro Air
Energy Inc., stating that the estimated revenue and growth of
(projected earnings) would amount to $127, 381, 000.00.
Streater further testified that AEG was unable to proceed
with its business plan because it never received the funding.
AEG also proffered evidence that it obtained a loan from
Robert Schwarze in the amount of $1, 000, 000.00 with an
interest rate of seven percent (75) per annum in order to pay
the Funding Fee.
Complaint allegations are sufficient to support AEG's
entitlement, on default, to judgment for the $1, 000, 000
funding fee. Additionally, the purpose of prejudgment
interest is to put a party in the position it would have been
in had it been paid immediately. Am. Nat. Fire Ins. Co.
ex rel. Tabacalera Contreras Cigar Co. v. Yellow Freight
Sys., Inc., 325 F.3d 924, 935 (7th Cir. 2003). It is
designed to ensure that a party is fully compensated for its
loss. See City of Milwaukee v. Cement Div. Nat'l
Gypsum Co., 515 U.S. 189, 195, 115 S.Ct. 2091, 132
L.Ed.2d 148 (1995). Consequently, prejudgment interest
typically accrues from the date of the loss or from the date
on which the claim accrued. See West Virginia v. United
States, 479 U.S. 305, 311, 107 S.Ct. 702, 93 L.Ed.2d 639
n. 2 (1987).
there are no countervailing considerations that would make an
award of prejudgment interest inequitable or unjust. AEG
provided evidence that it took out a $1, 000, 000 loan from
Robert Schwarze with an interest rate of 7% per annum. Thus,
an award of prejudgment interest at 7% is necessary to fully
compensate AEG for its injuries. Accordingly, Plaintiff is
awarded damages in the amount of $1, 000, 000.00 with