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Atlantic Broadband Finance, LLC v. Equinox Global Telecommunications, Inc.

United States District Court, W.D. North Carolina, Charlotte Division

March 4, 2019



          Robert J. Conrad, Jr., United States District Judge

         THIS MATTER is before the Court on Plaintiff Atlantic Broadband Finance, LLC's (“Plaintiff”) Second Motion for Default Judgment and supporting brief and exhibits. (Doc. No. 24).

         I. BACKGROUND

         A. Procedural Background

         Plaintiff filed suit against Defendants Equinox Global Telecommunications, Inc. and Ladonna Martin (collectively, “Defendants”) on January 15, 2016. (Doc. No. 1: Compl.). Defendants were served with the Summons and Complaint on January 26, 2016. (Doc. No. 5). On February 5, 2016, Plaintiff filed a Motion for Preliminary Relief. (Doc. No. 6). Defendants failed to respond to Plaintiff's Motion, which the Court then granted on March 29, 2016. (Doc. No. 16). Pursuant to Federal Rule of Civil Procedure 12(a)(1)(A)(i), Defendants had until February 19, 2016, to file an Answer to Plaintiff's Complaint. Defendants failed to file an answer or otherwise make an appearance in this case. Accordingly, on July 13, 2016, this Court ordered Plaintiff to file a Motion for Entry of Default. (Doc. No. 17). Default was entered on July 26, 2016. (Doc. No. 19).

         On March 9, 2017, Plaintiff filed its Motion for Default Judgment, (Doc. No. 20), but failed to attach a supporting brief, in violation of Local Rule 7.1(c). See LCvR 7.1(c). On February 22, 2018, this Court denied Plaintiff's Motion for Default Judgment without prejudice to renewal. (Doc. No. 22 at 9). The Court ordered Plaintiff to submit another motion accompanied by (1) a supporting brief connecting [its] allegations to the causes of action they are meant to support and (2) further documentary evidence illustrating the amount Plaintiff sent to Defendants pursuant to their contract. (Doc. No. 22 at 9). On February 5, 2019, the Court issued an Order to Show Cause why Plaintiff had not yet provided the Court with a renewed motion for default judgment along with a supporting brief and exhibits. (Doc. No. 23). The Court gave Plaintiff fourteen days to file a renewed motion and supporting documentation and warned that failure to do so would result in dismissal of all claims against Defendants. (Id.).

         In compliance with the Court's Show Cause Order, Plaintiff submitted a New Motion for Default Judgment accompanied with a supporting brief and exhibits on February 19, 2019. (Doc. No. 24). Accordingly, the Court now turns its attention to this Motion today. But first, the Court gives a summary of the facts giving rise to this suit.

         B. Factual Background

         Plaintiff—a limited liability company organized under the laws of Delaware with its principal place of business in Massachusetts—filed this breach-of-contract, diversity suit against Defendants on January 15, 2016. (Doc. No. 1 ¶ 1). In doing so, Plaintiff seeks to recover a money judgment in the amount of $445, 224.00, which represents the sum of two payments made by Plaintiff to Defendant Equinox, a North Carolina corporation: (1) a wire transfer of $428, 100.00 in June of 2014 and (2) a check for $17, 124.00 sent and negotiated in February 2015. (Doc. No. 1 at 1- 2). Plaintiff alleges that it made each payment at the direction of Defendant Martin, a resident of Mecklenburg County, North Carolina, who is listed on documents filed with the North Carolina Secretary of State as the president of Defendant Equinox and who has represented herself as the sole owner and director of Defendant Equinox. (Id. ¶¶ 3-4). Plaintiff alleges that these “funds were a deposit for the goods and services to be provided by Defendant Equinox for the laying over 170 miles of fiber optic cable through part of South Carolina and Georgia pursuant to a written Dark Fiber TRU Agreement executed in full on May 20, 2014 (the ‘Fiber Optic Contract').” (Id.) This contract was reviewed and executed between Plaintiff and Defendant Martin, acting on Defendant Equinox's behalf. (Id. ¶¶ 8-9; Doc. No. 1-1: Fiber Optic Contract at 18). Plaintiff contends that “[d]espite glimpses of legitimacy, Defendant Equinox was never adequately capitalized, its corporate formalities were barely established, its business operations were grossly overstated, and the most salient aspects of its business enterprise were expressly misrepresented by Defendant Martin.” (Doc. No. 1 at 1-2). Plaintiff believes that Defendant Martin converted Plaintiff's money, “directly or indirectly, for her personal benefit and to prop up the supposed enterprise of Defendant Equinox.” (Id. at 2). Plaintiff further alleges in the Complaint that “little to no work has been performed on the Fiber Optic Contract, despite a subsequent invoice from Defendant Equinox, which Plaintiff paid, seeking $17, 124 in additional funds.” (Id.). Plaintiff asserts that, at Defendant Martin's request, Plaintiff sent a check for that invoice to a new address also in Charlotte, and Defendant Martin negotiated the check in what appears to be her handwriting. (Id.). Plaintiff contends that Defendant Equinox never rendered services under the contract.

         Accordingly, Plaintiff filed this breach-of-contract action to recover the money it advanced to Defendant Equinox and to pierce the corporate veil to recover a money judgment against Defendant Martin. (Id. ¶¶ 39-46). Plaintiff believes that Defendant Martin has secreted Defendant Equinox's assets—specifically, the funds paid by Plaintiff—to circumvent the claims of Plaintiff and other creditors. (Id.). By separate motion, Plaintiff filed a Motion for Preliminary Relief for prejudgment attachment to freeze the assets of Defendant Equinox, and to the extent traceable, to Defendant Martin. (Doc. No. 6). On March 29, 2016, the Court granted Plaintiff's Motion and entitled Plaintiff to the following preliminary relief:

• A prejudgment Order of Attachment, freezing up to the amount of $445, 224.00, found in any bank account in the name of Equinox Global Telecommunications, Inc. or in any bank account using certain EIN (tax identification numbers) utilized by Defendants;
• A preliminary Order of Garnishment directed to SunTrust Bank, the bank to which Plaintiff had sent funds; and,
• The authority for Plaintiff to provide a copy of the Order along with other information "in order to discover whether and where assets of Defendants may be found so that they may be attached."

(Doc. No. 16 at 5-6). Subsequent to this Order, Plaintiff alleges that it sought information from SunTrust Bank (where Plaintiff wired funds) to discover whether there were assets warranting enforcement of the Prejudgment Order. (Doc. No. 24- 2 ¶ 12). Plaintiff further contends that no assets were located and no writ of attachment to Defendants or writ of garnishment to SunTrust was initiated, despite Plaintiff having deposited $1, 000.00 for an attachment bond into its counsel's Client Trust Account. (Doc. No. 24-1 ¶ 6). Plaintiff alleges that it was able to confirm from SunTrust's documents that Defendant Equinox received the June 2014 wire, drained Plaintiffs monies from the account through large cash withdrawals, and to payees unrelated to the Fiber Optic Project. (Id. ΒΆ 7). Plaintiff believes that Defendant Martin has instead used Plaintiffs ...

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