If you sue an entity in a commercial litigation matter and that entity fails to respond to your properly served complaint, that failure can be a massive benefit to you, as it may entitle you to obtain something called a “default judgment” in your favor. Even if you are entitled to a default judgment, there are still hurdles you have to clear to get everything out of your case. To make sure you’re getting the outcome and the total compensation you deserve, make sure your business has an experienced South Florida commercial litigation attorney on your side, ensuring that all your “t’s are crossed,” and your “i’s are dotted.”
As a recent breach of contract case from the federal court here in South Florida shows, falling short in any of the essential areas of proof can be very harmful.
In the case, a provider of medical billing and “revenue cycle management” services sued its client, a drug and alcohol rehab facility. According to the complaint, the rehab center stopping paying its bills, including at least six invoices that went unpaid.
After considerable effort, the vendor managed to serve notice of the lawsuit on the rehab facility. The federal rules give a defendant 21 days to file a response. The rehab facility never filed any response at all, either timely or belated.
That failure to file a timely response allows you, as the plaintiff, to seek an entry of a default judgment. One of the important things to remember about this process is that the defendant’s failure to participate in the litigation doesn’t automatically entitle you to everything you seek. You still have to give the court proof of jurisdiction, proof of your claims of liability and proof of the amount of damages.
In this vendor’s case, it sufficiently pled that it suffered more than $109,000 in damages, that it was a Delaware LLC with members who were Florida residents and that the rehab facility was a California LLC whose members were not Florida residents. These pleadings were enough to establish that the court had subject matter jurisdiction, the requirements for which are more than $75,000 in dispute and diversity of citizenship between the plaintiff and the defendant.
The vendor also had proof of personal jurisdiction, including the alleged fact that the parties signed their contract in Delray Beach.
The vendor, in support of its damages claim, gave the court several of the invoices that it alleged the rehab facility improperly failed to pay. The vendor also submitted affidavits in relation to termination fees that it alleged the rehab facility owed, as well as attorneys’ fees.
Proof of some damages, but not all the damages claimed
The vendor had a problem, though. Its supporting documentation made it abundantly clear that the rehab facility breached the contract by failing to pay the invoices it owed and that those invoices totaled more than $33,000. The vendor’s paperwork did not, however, clearly establish how it was entitled to $59,000 in early termination fees.
Similarly, although the vendor had sufficient proof in its papers to demonstrate that it was entitled to attorneys’ fees, that documentation was not enough to establish the amount of attorneys’ fees owed. For those reasons, the court demanded that the vendor provide additional supporting documentation, or else face receiving a default judgment that awarded only the much smaller sum of damages ($33,000) that was based on the unpaid invoices.
In the law, sometimes things that may sound like a “slam dunk” can still not be automatic. You still have to have someone on your side that knows how to properly dot all those i’s and cross those t’s. To make sure you’re getting everything to which you’re entitled in your breach of contract case, you need a diligent and detail-oriented advocate working for you. You can count on that kind of powerful and thorough representation when you retain the skilled South Florida commercial litigation attorneys at Stok Kon + Braverman to advocate for your business.
Contact us online or by calling (954) 237-1777 to schedule your consultation.