United States District Court, S.D. New York
MEMORANDUM OPINION & ORDER
ABRAMS, United States District Judge
Benjamin Foley, a lawyer proceeding pro se,
filed this action against Defendants Peter Wilson and KPC,
LLC for breach, of contract, unjust enrichment, and fraud
under New York state law. Although Defendant Wilson, also
proceeding pro se, eventually filed an Answer (over
fifteen months after the Complaint was filed), Defendant KPC
has not yet appeared in this action, and Defendant Wilson has
failed to comply with several Court orders or otherwise
indicate that he intends to defend this action since the
filing of his Answer. Now before the Court is Plaintiffs
motion for default judgment against both Defendants for
failure to comply with the Court's orders under Federal
Rule of Civil Procedure 37(b)(2)(A), and for failure to
defend this action under Federal Rule of Civil Procedure
55(a). For the reasons that follow, Plaintiffs motion is
granted in part and denied in part.
a resident of Florida, and Wilson, a resident of California,
entered into an agreement in February 2012, whereby Wilson
agreed to purchase stock on behalf of Plaintiff from a
company named Uniloc. Compl. ¶¶ 3, 5, 7. Since
Wilson was a "large shareholder" of Uniloc and
"purchasing more shares," he allegedly offered to
purchase shares for Plaintiff and to then transfer those
shares to him. Id. ¶ 8. According to Plaintiff,
prior to their investment agreement, Wilson and Plaintiff met
on "at least two occasions" for dinner in
Manhattan, New York, and Wilson visited Plaintiffs
"place of business" in Manhattan on "at least
one occasion." Foley Amended Aff, Dkt. 15 ¶ 5.
Plaintiff and Wilson also allegedly "discussed Uniloc
and the investment opportunity" on "several
occasions" while in New York. Id. Plaintiff
asserts that Wilson "traveled from California to New
York," where Plaintiff has a business, "to
solicit" the funds for his "fraudulent investment
also alleges that Wilson's son, Clayton, who was a New
York resident and an employee of Plaintiff s business at the
time, participated in the agreement and solicitation of funds
from Plaintiff by acting as "an agent" for his
father. See Id. ¶¶ 4, 6. Plaintiff further
asserts that he worked "daily side by side" with
Clayton during this time, and that he, Clayton, and Wilson
"discussed the potential investment over dinner, on the
phone, and via email." Id. ¶ 6.
"many of the details of the agreement were oral,"
Plaintiff alleges that "key elements" of the
agreement, such as the purchase price, were
"memorialized in email." Compl. ¶ 9.
Specifically, on February 7, 2012, Wilson emailed Plaintiff
with the "terms" of the deal, stating "400k @
$40 per share or better....confirmed. Doc tomorrow or the
next day." See Id. ¶ 10; Compl. Ex. C. In
that same email, Wilson provided Plaintiff with wire
instructions, in which he directed Plaintiff to wire the
money to a bank account titled "KPC,
lie." See Compl. ¶ 11; Compl. Ex.
C. Plaintiff alleges that he "promptly accepted said
offer" and wired $400, 000 from his New York business
account, which was "established in a New York
bank," to Wilson's "KPC, LLC" account.
Compl. ¶ 12. At the very least, it appears that
Plaintiff expected to receive a certain amount of stock in
Uniloc in exchange for the $400, 000 that he transferred to
Wilson. It is undisputed that Plaintiff never received those
or any other shares.
alleges that in the weeks following the agreement, Wilson
"represented" that "Uniloc and Microsoft had
entered into a large, confidential settlement."
Id. ¶ 15. Wilson subsequently sent Plaintiff a
text message on March 6, 2012, stating "U owe me,"
to which Plaintiff replied "Haaaaa, agreed."
See Id. ¶ 15; Compl. Ex. B.
to Plaintiff, Wilson also "made assurances" on
several occasions that "performance of his obligation
[under the agreement] had been perfected and evidence was
forthcoming." Id. ¶ 14. Plaintiff asserts,
however, that in 2017, Wilson "admitted the shares had
not been transferred due to a previously undisclosed
shareholder restriction of transfer." Id.
alleges that Defendants have failed to deliver the "full
purchase price" of the shares to him, "despite
years of assurances that said interest would be
delivered," id. ¶ 6, and that to date, he
has received "no consideration for the $400, 000 wire
sent as directed by the contract between" himself and
Wilson, id. ¶ 17. In his Answer, Wilson avers
that the shares at issue "reside in KPC lie as per the
agreement." Answer ¶ 6.
commenced this action on January 19, 2018, asserting claims
for breach of contract, unjust enrichment, and fraud under
New York state law, and seeking repayment of the $400, 000
that he wired to Wilson in February 2012, as well as interest
at the "statutory rate of 9%" under N.Y. C.P.L.R.
§ 5001. Dkt 1.
were served with a Summons and Complaint on January 23, 2018,
according to affidavits of service that Plaintiff filed on
January 30, 2018. See Dkts. 5, 6. According to those
affidavits, Defendants had been served by "sub-serv[ing]
the summons on Pat Palazuelos, owner of The UPS Store at 3334
E. Coast Hwy, Corona del Mar, CA 92925." Dkts. 5, 6. The
server told Ms, Palazuelos that she "was serving legal
papers on [each Defendant] and she said she would put them in
mailbox #412." Id. Thereafter, copies of the
documents were apparently mailed "to the same
address" for each Defendant. Id. Plaintiff also
avers that a "courtesy copy" of the Summons and
Complaint was emailed to Wilson on February 5, 2018.
See Foley Amended Aff., Dkt. 15, Ex. C.
February 27, 2018, Plaintiff filed a "Request for Entry
of Default," addressed to the Clerk of Court. Dkt. 7. On
May 11, 2018, the Clerk of Court issued Certificates of