United States District Court, S.D. New York
OPINION AND ORDER
PAUL OETKEN, DISTRICT JUDGE.
September 21, 2017, Plaintiff RDW Capital, Inc.
(“RDW”) filed this action alleging breach of
contract, fraud in the inducement, fraudulent
misrepresentation, and unjust enrichment brought pursuant to
this Court's diversity jurisdiction against Defendants BE
Industries, Inc., NAC Drive Systems, Inc.
(“NACD”), Swiss Heights Engineering, S.A.
(“Swiss Heights”), BE North America, Corp.
(“BE North America”), Bellelli USA, LLC
(“Bellelli USA”), Bellelli Engineering, S.P.A.
(“Bellelli Engineering”), Antonio Monesi, and
Filippo Puglisi. (Dkt. No. 1 (“Compl.”).)
Defendants have not answered the complaint or otherwise
appeared in this action. Defendant Bellelli Engineering is in
an active bankruptcy in Italy. (Dkt. No. 75 ¶ 10.) And
Defendant Swiss Heights has been dissolved. (Dkt. No. 75
¶ 11.) A certificate of default has been issued as to
all other Defendants. (Dkt. Nos. 36-38, 45, 50, 67.)
Plaintiff now moves for default judgment under Federal Rule
of Civil Procedure 55(b) against the other six defendants.
(Dkt. No. 72.) For the reasons that follow, the motion is
purposes of deciding this motion, this Court accepts as true
all factual allegations in RDW's complaint. See
Bricklayers & Allied Craftworkers Local 2 v. Moulton
Masonry & Constr., LLC, 779 F.3d 182, 187 (2d Cir.
2015) (per curiam).
November 4, 2016, RDW entered into a Securities Purchase
Agreement with NAC Global Technologies, Inc. (“NAC
Global”) (now known as Defendant BE Industries, Inc.)
and Defendant NACD. (Compl. ¶ 17.) In the agreement, RDW
committed to the purchase of a little over 1.5 million shares
of NAC Global in exchange for $1.5 million. (Id.)
days later, on November 16, 2016, RDW entered into a Security
and Pledge Agreement with all corporate defendants whereby
RDW was provided with a secured interest in all property
owned and controlled by each corporate defendant. (Compl.
¶ 18.) On the same day, Defendants NACD, Bellelli
Engineering, Bellelli USA, and BE North America entered into
a Subsidiary Guarantee Agreement, pursuant to which each
Defendant agreed to be liable to RDW for any breach of the
Securities Purchase Agreement and related transaction
agreements. (Compl. ¶ 19.) RDW further entered into a
Validity and Performance Guarantee with Defendant Antonio
Monesi in which he agreed to be personally liable for any
breach of the Securities Purchase Agreement and related
transaction agreements up to $1.5 million. (Compl. ¶
20.) RDW also entered a similar Validity and Performance
Guarantee with Defendant Filippo Puglisi. (Compl. ¶ 21.)
also entered into two separate collateral assignment
contracts. On November 16, 2016, RDW entered into a
Collateral Assignment of Receivables with NAC Global and its
subsidiaries NACD, Bellelli USA, and BE North America (the
“U.S. Collateral Assignment”). In that agreement,
the parties assigned all rights to their receivables as
collateral for all debts, liabilities, and obligations
existing under the Securities Purchase Agreement, until all
of their payment obligations had been paid in full. (Compl.
¶ 22.) On November 16, 2017, RDW entered into a similar
Collateral Assignment of Receivables with Swiss Heights and
Bellelli Engineering (the “Foreign Collateral
on December 9, 2016, NAC Global filed a Certification of
Designations, Preferences and Rights of the Series A
Convertible Preferred Stock of NAC Global Technologies
(“Certification of Designations”) with the Nevada
Secretary of State. (Compl. ¶ 24.) The Certificate of
Designations provided, in relevant part, that NAC Global
would make monthly payments of $150, 000 to RDW beginning on
May 16, 2017, until RDW's investment was repaid in full.
alleges that Defendants breached the Securities Purchase
Agreement by (1) failing to complete an audit of Swiss
Heights and (2) failing to file a registration statement and
have it declared effected by the SEC. (Compl. ¶ 26.)
Defendants further allegedly breached the Certification of
Designations by failing to pay RDW the first mandatory
redemption installment payment of $150, 000 by May 16, 2017,
or make any required payments thereafter. (Id.) RDW
has complied with its obligations under all agreements and
has not received any return on its investment. (Compl.
Defendants made allegedly “false and misleading
statements” when contacted by RDW regarding
Defendants' nonpayment. (Compl. ¶ 29.) Defendants
have “contend[ed] they are receiving additional
financing, ” and have “tout[ed] non-existent
contracts to demonstrate they are receiving new revenue and
are a solvent company.” (Id.) RDW alleges that
these statements were “false” and “made for
the sole purpose” of delaying RDW from enforcing the
default provision of the agreements at issue here. (Compl.
September 21, 2017, RDW filed this action to recoup its
investment pursuant to the various agreements. (See
defendant “has failed to plead or otherwise
defend” a lawsuit, that defendant is in default and is
deemed, for the purposes of liability, to have admitted all
well-pleaded allegations in the complaint. Belizaire v.
RAV Investigative & Sec. Servs. Ltd., 61 F.Supp.3d
336, 344 (S.D.N.Y. 2014) (quoting Fed.R.Civ.P. 55(a)). At
that point, the plaintiff is entitled to default judgment if
the complaint's allegations “establish [the
defendant's] liability as a matter of law.”
Id. (alteration in original) (quoting Finkel v.
Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009)).
contrast to the facts supporting liability, however,
“the amount of damages” alleged in the complaint
is “not deemed true” in the event of a default.
Tiffany (NJ) Inc. v. Luban, 282 F.Supp.2d 123, 124
(S.D.N.Y. 2003) (quoting Credit Lyonnais Sec. (USA) v.
Alcantara, 183 F.3d 151, 152 (2d Cir. 1999)). Rather,
after a court has determined that entry of default judgment
against a defendant on a particular claim is appropriate, the
court must “conduct an inquiry in order to ascertain
the amount of damages with reasonable certainty” by
“determining the proper rule for calculating damages on