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`Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 1 of 15 PageID 159Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 1 of 15 PageID 159
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
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`§§§
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`§§
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`§ CIVIL ACTION NO. 3:21-CV-1052-B
`§
`§
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`§§
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`§
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`CROWN DISTRIBUTING LLC,
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` Plaintiff,
`
`v.
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`ICE SUPPZ, LLC, NALPDOG LLC, and
`JOSH BECKER,
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` Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is Plaintiff Crown Distributing LLC (“Plaintiff” or “Crown”)’s Motion for
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`Entry of Default Judgment (Doc. 26). For the reasons discussed below, the Court GRANTS IN
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`PART and DENIES IN PART the motion.
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`I.
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`BACKGROUND1
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`This case arises from a contract for the purchase of hemp biomass. “Crown is a Dallas-based
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`manufacturer and distributor of hemp-derivative goods.” Doc. 1, Compl., ¶ 32. Defendant Josh
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`Becker (“Becker”) “brokers transactions for sourcing and purchasing of raw hemp plant material.”
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`Id. ¶ 33. Defendant Ice Suppz, LLC (“Ice Suppz”) “is a brokerage firm/supplier that offers and
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`provides services for sourcing raw hemp plant material.” Id. ¶ 34. Defendant Nalpdog, LLC,
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`(“Nalpdog”) “is an entity that offers and provides services for sourcing and providing raw hemp plant
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`
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`1 This factual statement is derived from Plaintiff’s Complaint (Doc. 1) unless otherwise noted.
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`material.” Id. ¶ 35. Becker is the sole member of Ice Suppz and Ice Suppz is the sole member of
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`Nalpdog. Id. ¶¶ 17, 19, 36.
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`In 2020, Crown hired Becker to broker a purchase of “38,000 pounds of hemp biomass with
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`a [cannabidiol (‘CBD’)] content of 8.5% and 12,000 pounds of hemp biomass with a CBD content
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`of 4.5%.” Id. ¶¶ 36, 40. Becker told Crown that Ice Suppz could supply the material and invoiced
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`Crown through Nalpdog, indicating payment should be made directly to Ice Suppz. Id. ¶¶ 39–40, 42.
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`Crown was unaware at the time of the relationship between Becker, Ice Suppz, and Nalpdog
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`(collectively, “Defendants”). Id. ¶ 36. In May 2020, Crown wired “$200,000.00 . . . directly to Ice
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`Suppz.” Id. ¶ 43. About a week later, Ice Suppz delivered some of the material, but upon inspection,
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`“[the goods received] did not meet the [contract’s] quality parameters.” Id. ¶ 44. “Crown
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`immediately rejected acceptance, requested that Ice Suppz pick up the nonconforming goods, and
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`notified Ice Suppz that the material was unacceptable and that it had rejected the goods.” Id. ¶ 45.
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`“In response to Crown’s rejection of the biomass[] material, . . . Becker admitted via text message,
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`‘[i]t’s wrong. My people f****ed [sic] up.’” but “assured Crown [he and Ice Suppz] would rectify the
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`issue.” Id. ¶¶ 46–47 (second alteration in original).
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`“Relying on representations . . . that acceptable substitute material would be provided,”
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`Crown waited for Ice Suppz to cure but eventually began demanding “the return of its $200,000.00
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`and pickup of the . . . nonconforming goods.” Id. ¶¶ 48–49. About six months later, Becker and Ice
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`Suppz delivered approximately 15,000 pounds of again nonconforming hemp material to Crown,
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`which Crown “again immediately rejected . . . , informed . . . Becker and Ice Suppz of the rejection
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`. . . and requested [that] Ice Suppz . . . pick up the approximate [sic] 40,000 total pounds of
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`nonconforming goods from [Crown’s] facility.” Id. ¶ 51. “Crown was never provided with acceptable
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`substitute material” and “its $200,000.00 was never returned.” Id. ¶ 54.
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`On May 10, 2021, Crown filed its complaint against Defendants. Doc. 1, Compl. The
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`complaint was served on Ice Suppz and Nalpdog on May 13, 2021. Doc. 5, Ice Suppz Return of
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`Summons, 2; Doc. 6, Nalpdog Return of Summons, 2. The Clerk made entry of default against Ice
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`Suppz and Nalpdog on August 3, 2021. Doc. 13, Entry of Default. After multiple attempts, Becker
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`was finally served on September 29, 2021. Doc. 23, Return of Service, 1. Default was entered against
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`Becker on October 26, 2021. Doc. 25, Entry of Default. On November 19, 2021, Crown moved for
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`default judgment against all Defendants. Doc. 26, Mot. for Default J. Defendants failed to respond
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`to Crown’s motion and the time to do so has passed. Accordingly, the motion is ripe for
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`determination and the Court considers it below.
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`II.
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`LEGAL STANDARD
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`Federal Rule of Civil Procedure 55 provides for the entry of default judgments in federal
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`court. According to Rule 55, “[w]hen a party against whom a judgment for affirmative relief is sought
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`has failed to plead or otherwise defend, . . . the clerk must enter the party’s default.” Fed. R. Civ. P.
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`55(a). Once default has been entered, the court may enter a default judgment against the defaulting
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`defendant upon motion of the plaintiff. Fed. R. Civ. P. 55(b).
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`“Default judgments are a drastic remedy, not favored by the Federal Rules and resorted to
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`by courts only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass’n, 874 F.2d
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`274, 276 (5th Cir. 1989) (footnote omitted). “A party is not entitled to a default judgment” merely
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`because “the defendant is technically in default.” Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996).
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`“Rather, a default judgment is generally committed to the discretion of the district court.” United
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`States v. 1998 Freightliner Vin #: 1FUYCZYB3WP886986, 548 F. Supp. 2d 381, 384 (W.D. Tex.
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`2008) (citing Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977)).
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`In determining whether a default judgment should be entered against a defendant, courts
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`have developed a three-part analysis. See, e.g., id. First, courts consider whether the entry of default
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`judgment is procedurally warranted. See Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).
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`The factors relevant to this inquiry include:
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`[1] whether material issues of fact are at issue; [2] whether there has been substantial
`prejudice; [3] whether the grounds for default are clearly established; [4] whether the
`default was caused by a good faith mistake or excusable neglect; [5] the harshness of
`a default judgment; and [6] whether the court would think itself obliged to set aside
`the default on the defendant’s motion.
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`Id.
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`Second, courts assess the substantive merits of the plaintiff’s claims and determine whether
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`there is a sufficient basis in the pleadings for the judgment. See Nishimatsu Constr. Co., Ltd. v. Hous.
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`Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (noting that “default is not treated as an absolute
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`confession by the defendant of his liability and of the plaintiff’s right to recover”). In doing so, the
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`Court is to assume that the defendant admits all well-pleaded facts in the plaintiff’s complaint. Id.
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`However, “[t]he defendant is not held to admit facts that are not-well pleaded or to admit
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`conclusions of law.” Id.
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`Third, courts determine what form of relief, if any, the plaintiff should receive. Ins. Co. of the
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`W. v. H & G Contractors, Inc., 2011 WL 4738197, at *4 (S.D. Tex. Oct. 5, 2011) (“A defendant’s
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`default concedes the truth of the allegations of the Complaint concerning the defendant’s liability,
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`but not damages.”) (citing Jackson v. FIE Corp., 302 F.3d 515, 524–25 (5th Cir. 2002)). Normally,
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`damages are not to be awarded without a hearing or a demonstration by detailed affidavits
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`establishing the necessary facts. See United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir.
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`1979). However, if the amount of damages can be determined with mathematical calculation by
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`reference to the pleadings and supporting documents, a hearing is unnecessary. James v. Frame,
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`6 F.3d 307, 310 (5th Cir. 1993).
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`III.
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`ANALYSIS
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`First, the Court finds that entry of a default judgment is procedurally warranted. Next,
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`considering the substance of the claims, the Court finds a sufficient basis in the pleadings for entry
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`of default judgment on Crown’s breach-of-contract claim against Becker and Ice Suppz. However,
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`the Court finds that: the fraud, negligent misrepresentation, and negligence claims against
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`Defendants are likely barred by Texas’s economic loss rule; Crown may not receive judgment for both
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`unjust enrichment and breach of contract from Becker and Ice Suppz; and Crown has not stated a
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`claim for unjust enrichment against Nalpdog. The Court therefore denies entry of default judgment
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`on all but the breach-of-contract claim. Finally, because Crown has prevailed on only its breach-of-
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`contract claim against Becker and Ice Suppz, and has not segregated its fees, the Court declines to
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`award attorneys’ fees at this time and instructs Crown to file a supplemental motion for attorneys’
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`fees, costs, and prejudgment interest in light of this Order. But, the Court enters an award of actual
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`damages for breach of contract and postjudgment interest against Becker and Ice Suppz.
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`A.
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`Whether an Entry of Default Judgment is Procedurally Warranted
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`The court finds that default judgment is procedurally warranted after considering the Lindsey
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`factors. See Lindsey, 161 F.3d at 893. First, there are no disputed material facts because Defendants
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`did not file any responsive pleadings. See Nishimatsu Constr. Co., 515 F.2d at 1206. Second,
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`Defendants’ “failure to respond threatens to bring the adversary process to a halt, effectively
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`prejudicing [Crown’s] interests.” See H & G Contractors, Inc., 2011 WL 4738197, at *3. Third, there
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`is no evidence before the Court that indicates that Defendants’ silence results from a “good faith
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`mistake or excusable neglect.” See Lindsey, 161 F.3d at 893. Fourth, Crown’s complaint was served
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`on Ice Suppz and Nalpdog almost one year ago, Doc. 5, Ice Suppz Return of Summons, 2; Doc. 6,
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`Nalpdog Return of Summons, 2, while Becker was served over six months ago. Doc. 23, Return of
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`Service, 1. Defendants’ complete failure to respond “mitigate[s] the harshness of a default judgment.”
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`See John Perez Graphics & Design, LLC v. Green Tree Inv. Grp., Inc., 2013 WL 1828671, at *3 (N.D.
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`Tex. May 1, 2013). Finally, the Court is unaware of any circumstances that would require it to set
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`aside the default judgment if challenged by Defendants. See Lindsey, 161 F.3d at 893. Therefore, the
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`procedural requirements for granting default judgment are met.
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`B.
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`Whether There is a Sufficient Basis for Judgment in the Pleadings
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`Defendants are deemed to have admitted the well-pleaded allegations set forth in Crown’s
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`complaint. See Nishimatsu Constr. Co., 515 F.2d at 1206. Nonetheless, the Court must review the
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`pleadings to determine whether they present a sufficient basis for Crown’s claims for relief. See id. In
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`conducting this analysis, the Fifth Circuit has looked to the Rule 8 case law2 for guidance:
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`Rule 8(a)(2) requires a pleading to contain “a short and plain statement of the claim
`showing that the pleader is entitled to relief.” The purpose of this requirement is “to
`‘give the defendant fair notice of what the . . . claim is and the grounds upon which
`it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v.
`Gibson, 355 U.S. 41, 47(1957)). The factual allegations in the complaint need only
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`2 The heightened pleading standard of Rule 9(b) would apply to Crown’s fraud claim. Cf. Thomas v.
`Cadwalander, 2022 WL 1158261, at *4 (N.D. Tex. Mar. 17, 2022), report & recommendation adopted sub nom.
`Thomas v. Terry, 2022 WL 1158011 (N.D. Tex. Apr. 19, 2022) (applying the Rule 9(b) pleading standard
`to a fraud claim in a motion for default judgment). However, the Court need not address the sufficiency of
`Crown’s fraud claim’s pleading because it is barred by Texas’s economic loss rule. See infra Section III(B)(2).
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`“be enough to raise a right to relief above the speculative level, on the assumption
`that all the allegations in the complaint are true (even if doubtful in fact).” Id.
`(footnote and citations omitted). “[D]etailed factual allegations” are not required,
`but
`the pleading must present
`“more
`than an unadorned,
`the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
`678 (2009).
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`Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (alterations in original).
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`Although the Court assumes that Defendants admit the well-pleaded facts in the Amended
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`Complaint, Defendants “[are] not held to admit facts that are not well-pleaded or to admit
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`conclusions of law.” See Nishimatsu Constr. Co., 515 F.2d at 1206.
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`As a threshold matter, Texas law applies to Crown’s claims. See Erie R. Co. v. Tompkins, 304
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`U.S. 64, 78 (1938). Crown asserts five claims: (1) breach of oral contract against Ice Suppz and
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`Becker; and (2) fraud, (3) negligence, (4) negligent misrepresentation, and (5) unjust enrichment
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`against all Defendants. Doc. 1, Compl., ¶¶ 57–84. Crown seeks actual damages of $200,000.00,
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`prejudgment and postjudgment interest, and attorneys’ fees and costs pursuant to Tex. Civ. Prac. &
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`Rem. Code § 38.001. Id. ¶¶ 85–86; Doc. 26, Mot. Default J., ¶ 21.
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`1.
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`Breach of Oral Contract Against Becker and Ice Suppz
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`Crown pleads facts sufficient to support its claim for breach of contract. Under Texas law,
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`the elements of a breach of contract claim are: “(1) the existence of a valid contract; (2) performance
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`or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and
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`(4) damages sustained by the plaintiff as a result of the breach.” Smith Int’l, Inc. v. Egle Grp., LLC,
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`490 F.3d 380, 387 (5th Cir. 2007) (citing Valero Mktg. & Supply Co. v. Kalama Int’l L.L.C., 51
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`S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.] 2001, no pet.)).
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`Recovery under contracts relating to the sale of goods is governed by chapter two of the
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`Texas Business and Commerce Code. Tex. Bus. & Com. Code Ann. § 2.102; see Selectouch Corp. v.
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`Perfect Starch, Inc., 111 S.W.3d 830, 834 (Tex. App.—Dallas 2003, no pet.). A breach-of-contract
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`claim under this chapter exists when “a party fails to deliver the goods as promised.” Baker Hughes
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`Process & Pipeline Servs., L.L.C. v. UE Compression, L.L.C., 938 F.3d 661, 666 (5th Cir. 2019)
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`(quoting Omni USA, Inc. v. Parker-Hannifin Corp., 964 F. Supp. 2d 805, 812 (S.D. Tex. 2013)).
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`“[D]amages are only permitted . . . when the seller has failed to deliver the goods, the buyer has
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`rejected the goods, or the buyer has revoked his acceptance.” Luig v. N. Bay Enters., Inc., 817 F.3d
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`901, 906 (5th Cir. 2016) (quoting A.O. Smith Corp. v. Elbi S.P.A., 123 F. App’x 617, 619 (5th Cir.
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`2005)). Upon receipt of nonconforming goods, a buyer may reject the goods within a reasonable time
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`after their delivery but must also notify the seller of their rejection. Tex. Bus. & Com. Code Ann.
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`§§ 2.601, 2.602.
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`There is sufficient evidence in the pleadings to find that Crown entered into an oral contract
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`with Ice Suppz and Becker and that Crown performed. Crown pleads that it agreed with Becker that
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`Becker was to source for Crown 38,000 pounds of hemp biomass with a CBD content of 8.5 percent,
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`and another 12,000 pounds of hemp biomass with a CBD content of 4.5 percent. Doc. 1, Compl.,
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`¶ 38. Crown further pleads that Becker was acting in the transaction as an agent for Ice Suppz, an
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`undisclosed principal, so both Becker and Ice Suppz are parties to the contract.3 Id. ¶ 57. Crown
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`3 “Under Texas law, an undisclosed principal is liable for contracts made by his agent as long as the
`agent is acting within the scope of his authority . . . [and] may be liable, even when the agent acts without
`authority, when the principal retains the benefits of the transaction” N.K. Parrish, Inc. v. Sw. Beef Indus.
`Corp., 638 F.2d 1366, 1370–71 (5th Cir. 1981) (footnote omitted) (first citing Med. Pers. Pool of Dall., Inc.
`v. Seale, 554 S.W.2d 211, 213 (Tex. App.—Dallas, 1977, writ ref’d n.r.e.); and then citing Owen v. King, 84
`S.W.2d 743, 749–50 (Tex. App.—Amarillo, 1935), rev’d on other grounds, 111 S.W.2d 695 (1938)). The
`undisclosed principal’s agent is also liable for the breach of contract. See Latch v. Gratty, Inc., 107 S.W.3d 543,
`546 (Tex. 2003) (citing Heinrichs v. Evins Pers. Consultants, Inc., No. One, 486 S.W.2d 935, 937 (Tex. 1972)).
`Here, Crown pleads that Becker is the sole member of Ice Suppz, and, although he posed as a broker
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`alleges it sent $200,000.00 by wire payment directly to Ice Suppz, which subsequently provided hemp
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`biomass. Id. ¶¶ 43–44. These facts, which Defendants are deemed to admit, are sufficient evidence
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`of a contract and of Plaintiff’s performance.
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`The pleadings also sufficiently establish that Ice Suppz and Becker breached the contract.
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`Plaintiff asserts that Ice Suppz sent nonconforming goods, as Becker admitted via text. Id. ¶¶ 44, 46.
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`Crown immediately notified Ice Suppz that the material was nonconforming and that it was rejecting
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`the goods, constituting a proper rejection of the delivery. Id. ¶ 45. Ice Suppz’s attempt to cure the
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`defect months later was unsuccessful. Id. ¶ 51.
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`Finally, Crown adequately pleads that it was injured by the breach. Crown paid Ice Suppz
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`$200,000.00, which has not been returned. Id. ¶ 54. This establishes an injury caused by Ice Suppz’s
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`and Becker’s breach of the contract.
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`Therefore, the motion for default judgment against Defendants Becker and Ice Suppz for
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`breach of contract is GRANTED.
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`2.
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`Fraud, Negligent Misrepresentation, and Negligence Against All Defendants
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`Under Texas law, a “contractual relationship . . . may create duties under both contract and
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`tort law.” Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986) (citing Montgomery Ward
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`& Co. v. Scharrenbeck, 204 S.W.2d 508 (Tex. 1947)). “The nature of the injury most often
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`determines which duty or duties are breached.” Id. When the only claimed injury is “economic loss
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`for this transaction, Becker never informed Crown of his agency relationship with Ice Suppz. Doc. 1, Compl.,
`¶¶ 17, 36. Becker agreed to the sale and asked that the payment be submitted to Ice Suppz. Id. ¶ 40. Because
`Becker allegedly agreed to the deal on behalf of Ice Suppz and because Crown did not know of Becker’s
`relationship with Ice Suppz, the Court finds Becker was an agent with an undisclosed principal—Ice Suppz.
`So, both Ice Suppz and Becker are parties to the contract and both are liable for the breach of contract. See
`Latch, 107 S.W.3d at 546; N.K. Parrish, Inc., 638 F.2d at 1370.
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`to the subject of a contract itself, the action sounds in contract alone[,]” and the economic loss rule
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`applies to bar damages from tort claims. Id. (citing Mid-Continent Aircraft Corp. v. Curry Cnty.
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`Spraying Serv., 572 S.W.2d 308, 312 (Tex. 1978)); Formosa Plastics Corp. USA v. Presidio Eng’rs. &
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`Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998) (explaining that where an independent duty exists
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`the economic loss rule may not apply).
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`Here, Crown has not alleged that Defendants owed Crown any independent duty beyond
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`performance under the contract. See Doc. 1, Compl., ¶¶ 62, 64–67, 69, 72, 74–79. Instead, the fraud,
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`negligence, and negligent-misrepresentation claims “appear to merely recast [Crown's]
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`breach-of-contract claims as a tort.” See Blackhawk Paving, Inc. v. CPCM, LLC, 2021 WL 1152836,
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`at *2 (E.D. Tex. March 26, 2021) (“As described in [plaintiff]’s Original Complaint, its fraud and
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`negligent-misrepresentation claims are premised entirely on [defendant’s] failure to meet its
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`contractual promise and obligation to make complete payment to [plaintiff] for the work performed
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`under the parties’ agreement.”); Peco Const. Co. v. Guajardo, 919 S.W.2d 736, 739 (Tex. App.—San
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`Antonio 1996, writ denied) (stating that plaintiff’s fraud recovery can be sustained only if the
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`evidence supports the jury’s finding of fraud independent of the contract action). Therefore, the
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`Court finds that Crown’s pleadings do not provide a sufficient basis to conclude that the fraud,
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`negligent-misrepresentation, and negligence claims survive Texas’s economic loss rule. For this
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`reason, Plaintiff’s motion for default judgment on the fraud, negligence, and negligent-
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`misrepresentation claims is DENIED.
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`3.
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`Unjust Enrichment Against All Defendants
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`Because the Court has found that Ice Suppz and Becker breached the oral contract with
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`Crown, Crown may not recover from these parties under the quasi-contract theory of unjust
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`enrichment. See Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000) (“Generally
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`speaking, when a valid, express contract covers the subject matter of the parties' dispute, there can
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`be no recovery under a quasi-contract theory.” (citing TransAmerican Nat. Gas Corp. v. Finkelstein,
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`933 S.W.2d 591, 600 (Tex. App.—San Antonio 1996, writ denied)); see also Doc. 1, Compl., ¶ 81
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`(implying that the unjust enrichment claim is an alternative to the breach-of-contract claim).
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`As to Nalpdog, the Court finds that Crown has not adequately pled that Nalpdog received
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`the payment or has refused to return it. See Doc. 1, Compl., ¶¶ 40, 42–43, 84. Crown pleads that the
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`invoice Becker provided to Crown for the hemp biomass was issued by Nalpdog but required payment
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`to Ice Suppz. Id. ¶ 40. Crown has not pleaded that Nalpdog is Becker’s and/or Ice Suppz’s alter ego
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`or that Nalpdog received or retained Crown’s payment. See Doc. 1, Compl.; Clapper v. Am. Realty
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`Invs., Inc., 2015 WL 3504856, at *8–11 (N.D. Tex. June 3, 2015) (dismissing unjust enrichment
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`claims against defendants where the plaintiffs did not plausibly allege that the assets were in those
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`defendants’ possession and the elements of alter ego liability were not proven). Absent such facts,
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`the Court finds no sufficient basis in the pleadings to grant default judgment on the unjust
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`enrichment claim against Nalpdog.
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`Therefore, the Court DENIES the motion for default judgment on the unjust-enrichment
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`claim.
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`C.
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`Damages
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`Finally, the Court turns to the issue of damages. Plaintiff requests actual damages,
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`prejudgment and postjudgment interest, attorneys’ fees, and costs. The Court considers each in turn.
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`1.
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`Actual Damages
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`Courts routinely find that copies of contracts, invoices, purchase orders, emails with payment
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`details, and statements of anticipated costs, together with computations and affidavits, are a
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`sufficient evidentiary basis for a damages award. See, e.g., Can Cap. Asset Servicing, Inc. v. Azket
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`E-Intel. LLC, 2021 WL 2474159, at *4 (N.D. Tex. June 17, 2021). Here, Crown requests
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`$200,000.00 in actual damages based on the amount it paid pursuant to the contract. Doc. 1,
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`Compl., ¶¶ 55, 60. In support of its request, Plaintiff submitted a copy of the invoice and wire transfer
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`showing the amount paid under the contract for the material that should have been delivered.
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`Doc. 26-1, Mot. Default J., 5–6. The Court accepts the invoice and wire transfer amount and finds
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`that the amount of damages owed to Plaintiff by Defendants Becker and Ice Suppz is capable of
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`mathematical calculation based on these supporting documents. See James, 6 F.3d at 310. Therefore,
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`the Court GRANTS Plaintiff’s request for damages in the amount of $200,000.00.
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`2.
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`Prejudgment and Postjudgment Interest
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`Plaintiff also requests prejudgment and postjudgment interest. Doc. 14, Mot. Default J., 5.
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`Plaintiff has not provided any authority for why it is entitled to prejudgment interest or how the
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`Court should calculate such interest. See id.; see also Paisano Cap. SA de CV v. 23 Tex. Produce, Inc.,
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`2019 WL 3239152, at *5 (N.D. Tex. July 18, 2019) (applying the statutory rate set out in Texas
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`Finance Code § 302.002 to a common-law claim); but see Aguacates Seleccionados JBR USA, LLC v.
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`Bucks Fresh Produce, LLC, 2020 WL 2193501, at *12 (S.D. Tex. May 6, 2020), on reconsideration,
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`2020 WL 4883898 (S.D. Tex. Aug. 20, 2020) (applying the postjudgment interest rate rather than
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`the statutory rate). Accordingly, the Court finds it lacks a sufficient basis on which to award
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`prejudgment interest at this time. The Court therefore DENIES the request for an award of
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`prejudgment interest but will allow Plaintiff to renew its request in a supplemental motion as
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`described at the conclusion of this Order.
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`-12-
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`Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 13 of 15 PageID 171Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 13 of 15 PageID 171
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`“[Postjudgment] [i]nterest shall be allowed on any money judgment in a civil case recovered
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`in district court.” 28 U.S.C. § 1961(a). Postjudgment interest “shall be calculated from the date of
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`the entry of judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield,
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`as published by the Board of Governors of the Federal Reserve system, for the calendar week
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`preceding the date of the judgment.” Id. Therefore, the Court GRANTS Plaintiff’s request for
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`postjudgment interest on all damages awarded herein, at the statutory rate, from the entry of this
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`Default Judgment until paid.
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`3.
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`Attorneys’ Fees and Costs
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`i.
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`Attorneys’ fees
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`Plaintiff requests an award of reasonable attorneys’ fees. Doc. 1, Compl., ¶ 86. A prevailing
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`party in a civil action may recover attorneys’ fees in a claim for an oral or written contract. Tex. Civ.
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`Prac. & Rem. Code Ann. § 38.001(8); see also Fed. R. Civ. P. 54(d)(2). While “§ 38.001(8) uses the
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`term ‘may,’ the Texas Supreme Court has declared that attorneys’ fees under section 38.001 are not
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`discretionary.” Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 603 n.2 (5th Cir. 2000) (citing
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`Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998)). This is true even in the default judgment
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`context. See McLeod, Alexander, Powel & Apffel, P.C. v. Quarles, 894 F.2d 1482, 1488 (5th Cir. 1990)
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`(upholding an award of attorneys’ fees granted as part of a default judgment). However, the Texas
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`Supreme Court has also held that when a party bringing multiple claims does not prevail on all
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`claims, attorneys’ fees must be segregated to the extent feasible. Tony Gullo Motors I, L.P. v. Chapa,
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`212 S.W.3d 299, 314 (Tex. 2006). Therefore, the Court DENIES an award of attorneys’ fees at this
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`time. Plaintiff may file a supplemental motion for attorneys’ fees as stated at the conclusion of this
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`Order.
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`-13-
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`Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 14 of 15 PageID 172Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 14 of 15 PageID 172
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`ii.
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`Costs
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`A prevailing party in a civil action is entitled to recover its costs unless a federal statute, the
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`federal rules, or the court provides otherwise. See Fed. R. Civ. P. 54(d)(1). Taxable court costs
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`include: (1) fees paid to the clerk and marshal; (2) court reporter fees for all or part of the deposition
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`transcript; (3) witness fees and related expenses; (4) printing costs; and (5) fees for copies of papers
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`necessarily obtained for use in the case. 28 U.S.C. § 1920. Here, Plaintiff seeks $2,075.85 in costs,
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`including $1,314.50 incurred by Plaintiff’s counsel’s prior law firm and $761.35 incurred by Plaintiff’s
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`counsel’s current law firm. Doc. 26-1, Ritter Aff., ¶ 15. The costs sought include employing private
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`process servers and a private investigator. Doc. 26-1, Ritter Aff., ¶ 15; Doc. 26-1, Ex. 1, 20; Doc. 26-
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`1, Ex. 2, 24–25; Doc. 26-1, Ex. 3, 32.
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`The Court finds that the requested fees for filing, service of process, postage, and online
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`research generally appear reasonable and taxable under the law. See Blake Box v. Dall. Mex. Consulate
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`Gen., 2014 WL 3952932, at *6 (N.D. Tex. Aug. 8, 2014), aff’d sub nom. Box v. Dall. Mex. Consulate
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`Gen., 623 F. App’x 649 (5th Cir. 2015). However, private investigator fees are not recoverable costs.
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`See San Jacinto Sav. v. Kacal, 1993 WL 455886 at *1 (5th Cir. Oct. 27, 1993) (per curiam) (stating
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`private investigator fees are “not recoverable costs under 28 U.S.C. § 1920”). Further, private process
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`server fees are not recoverable costs in the Fifth Circuit unless there is a showing of exceptional
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`circumstances warranting them. BITX Transp. Servs., LLC v. Forward Transp. Servs., LLC, 2021 WL
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`4990805, at *7 & n.6 (N.D. Tex. Oct. 27, 2021); see Marmillion v. Am. Int’l Ins. Co., 381 F. App’x
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`421, 431 (5th Cir. 2010) (citing Cypress-Fairbanks Indep. Sch. Dist. v. Michael, 118 F.3d 245, 257 (5th
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`Cir. 1997)). Crown does not allege that there are exceptional circumstances warranting costs for
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`private process server fees. See Doc. 1, Compl.; Doc. 26, Mot. Default J. Therefore, the Court
`
`-14-
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`Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 15 of 15 PageID 173Case 3:21-cv-01052-B Document 27 Filed 05/13/22 Page 15 of 15 PageID 173
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`DENIES Plaintiff’s request for costs at this time but will allow Plaintiff to submit a revised request
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`for costs in its supplemental motion, as permitted below.
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`IV.
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`CONCLUSION
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`For the above stated reasons, the Court ORDERS the following:
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`The Court GRANTS Default Judgment against Defendants Becker and Ice Suppz on the
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`breach-of-contract claim.
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`The Court DENIES the motion as to the fraud, negligence, negligent-misrepresentation, and
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`unjust-enrichment claims against Defendants.
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`The Court AWARDS damages against Becker and Ice Suppz in the following amounts:
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` •
`
` •
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`actual damages in the amount of $200,000.00, and
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`postjudgment interest on all sums awarded herein, at the statutory rate, from
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`the date of this Order until paid.
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`The Court DENIES WITHOUT PREJUDICE an award of prejudgment interest, costs, and
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`attorneys’ fees and allows Plaintiff to file a supplemental motion seeking prejudgment interest, costs,
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`and attorneys’ fees recoverable on the breach-of-contract claim against Becker and Ice Suppz. Any
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`such motion shall be filed within THIRTY (30) DAYS of this Order.
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`SO ORDERED.
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`SIGNED: May 13, 2022.
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`________________________________
`JANE J. BOYLE
`UNITED STATES DISTRICT JUDGE
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`-15-
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`