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Case 1:10-cv-01411-JHR-AMD Document 33 Filed 07/11/13 Page 1 of 11 PageID: 209

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW JERSEY

KATHLEEN BASARA and CHESTER
BASARA, h/w,

Plaintiffs,

v.

:

:

:

Hon. Joseph H. Rodriguez

Civil Action No. 10-1411



:

CBRL GROUP, INC. d/b/a CRACKER
BARREL OLD COUNTRY STORE, INC., ABC
CORPORATION (1-100) (a fictitious name for :
a presently unknown and unidentified
corporation), JOHN DOES (S), DEF
CORPORATION (1-100) (a fictitious name for
a presently unknown and unidentified
individual/corporation)
Defendants


:

:

: MEMORANDUM OPINION

AND ORDER

CBRL GROUP, INC. doing business as
CRACKER BARREL OLD COUNTRY STORE,
INC.

Defendant/Third-Party Plaintiff

v.

SCHOOR DEPALMA, INC. doing business
as CMX, INC., JOHN DOE (1-10),

Third-Party Defendants.

:

:

:

:

:

This matter comes before the Court on Defendant/Third-Party Plaintiff CBOCS,

Inc., i/s/a CBRL Group, Inc.’s motion for default judgment [Dkt. Entry No.31] against

Third-Party Defendant Schoor Depalma, Inc. d/b/a CMX, Inc. For the reasons discussed

below, the motion will be granted as to liability.

I. Background

According to Plaintiffs’ complaint, on or about July 27, 2008, Plaintiff tripped and

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fell on uneven pavement at a Cracker Barrel store in Mt. Laurel, New Jersey. Plaintiffs

filed a complaint against Defendant/Third-Party Plaintiff CBOCS, Inc., naming CBOCS as

“CBRL Group, Inc.” (hereinafter “Cracker Barrel”), in the Superior Court of New Jersey,

Camden County, on March 9, 2010. Cracker Barrel removed to this court on diversity

grounds on March 18, 2010. On September 13, 2010, Cracker Barrel filed an Amended

Answer and Third-Party Complaint against Third-Party Defendant Schoor Depalma, Inc.

d/b/a CMX, Inc. (“Schoor”) [9]. Plaintiffs and Cracker Barrel settled their dispute and a

Stipulation and Order of Dismissal as to Cracker Barrel was entered by the Court on

January 20, 2011.

The procedural history detailing Cracker Barrel’s attempts to prosecute the Third

Party Complaint must be recounted here to explain the reasons underscoring the age of

this case; the Court recounts the following excerpt from its July 2, 2012 Opinion denying

Cracker Barrel’s Motion for Default Judgment. In its Third-Party Complaint against

Schoor, Cracker Barrel alleges that Schoor provided to Cracker Barrel engineering and/or

surveying services for the Cracker Barrel Restaurant Store #484 property located in Mt.

Laurel, New Jersey (the “Mt. Laurel Cracker Barrel Store”). (Third-Party Compl. ¶ 1a.)

Schoor failed to provide proper engineering and/or surveying services for the Mt. Laurel

Cracker Barrel Store and failed and refused to correct its deficient work. (Id. at ¶ 1g.)

Cracker Barrel incurred engineering costs for the redesign of the ramps at the premises

and for construction costs to remediate the ramps designed by Schoor. (Id. at ¶ 1h.)

Cracker Barrel asserts that its rights against Schoor arise from a breach of contract and

under the New Jersey Tortfeasors Contribution Act, N.J.S.A. 2A:53A-1, et. seq.

On February 22, 2011, the Court entered a Notice of Call for dismissal as to

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Cracker Barrel’s Third-Party Complaint pursuant to Local Rule 41.1(a) and Fed. R. Civ. P.

4(m) due to 120 days of inactivity and failure to prosecute [14]. Counsel for Cracker

Barrel filed an Affidavit of Good Faith on February 24, 2011, asserting that Cracker Barrel

was preparing to request default as against Schoor should Schoor fail to answer [15]. In

that affidavit, Counsel for Cracker Barrel indicated that Counsel had learned that CMX,

Inc. was in bankruptcy. (Aff. of Scott A. Lazar ¶ 2.) On June 30, 2011, the Court entered

an Order to Show Cause why this case should not be dismissed for lack of prosecution,

noting that despite Counsel’s previously expressed intention to request default, an

additional 120 days had passed with no proceedings having been taken [16]. Cracker

Barrel then requested default on July 13, 2011; the Clerk, however, denied Cracker

Barrel’s request because a summons was never issued for Cracker Barrel’s Third-Party

Complaint against Schoor.

Cracker Barrel requested a summons on July 14, 2011 and the summons was

issued on the following day [19, 20]. On July 21, 2011, Cracker Barrel submitted an

Affidavit of Service, indicating that service was made on Plaintiff attorney David S.

Rochman [21]. Following another Notice of Call for dismissal on November 16, 2011 [22],

Cracker Barrel requested default on November 23, 2011, and the Clerk entered default on

that date. Cracker Barrel then moved for Default Judgment on December 14, 2011 [25].

On June 6, 2012, this Court entered an Order denying the Motion for Default Judgment

due to a question of proper service upon Schoor and vacated default [26]. Proper proof of

service having been filed, indicating service upon Schoor on September 23, 2010 , with

1

1

Schoor was also served on July 15, 2011. [22, 31-4]

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Cracker Barrel’s November 23, 2011 Request for Default, the Court vacated its June 6,

2012 Order on June 19, 2012 and reopened the present pending motion for default

judgment.

On July 2, 2012, the Court again denied Cracker Barrel’s Motion for Default

Judgment because of the suggestion that Schoor was in bankruptcy. [28]. Cracker Barrel

avers that the Schoor is not in bankruptcy; rather it has been acquired by Birdsall

Services Group and/or Berwind Property Group, Inc (“Birdsall”). See Aff. Of Good Faith

of Marc Schuley, Esq., ¶ 5. As a result, the Court may now consider the Motion for

Default Judgment.

A. Standard of Review for Default Judgment

II. Discussion

Plaintiffs move for Default Judgment pursuant to Rule 55 of the Federal Rules of

Civil Procedure. Rule 55 provides, in relevant part:

(a) Entry. When a party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend as provided by these rules
and that fact is made to appear by affidavit or otherwise, the clerk shall enter
the party’s default.

(b) Judgment. Judgment by default may be entered as follows:

(1) By the Clerk. When the plaintiff’s claim against a defendant is for a
sum certain or for a sum which can by computation be made certain, the
clerk upon request of the plaintiff and upon affidavit of the amount due shall
enter judgment for that amount and costs against the defendant, if the
defendant has been defaulted for failure to appear and is not an infant or
incompetent person.

(2) By the Court. In all other cases the party entitled to a judgment by default
shall apply to the court therefor . . . .

Fed. R. Civ. P. 55. Under Rule 55, “the entry of default is an essential predicate to any

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default judgment.” DeTore v. Local No. 245 of the Jersey City Pub. Employees Union,

511 F. Supp. 171, 176 (D.N.J. 1981).

Prior to the court's issuance of a default judgment against a defendant, the Clerk

of the Court must make an entry of the defendant's default. Fed. R. Civ. P. 55(a); See also

Heard v. Caruso, 351 Fed. Appx. 1, 15-16 (6th Cir. 2009). The entry of a default is

primarily a matter of judicial discretion, and the Third Circuit has "repeatedly state[d]

[its] preference that cases be disposed of on the merits whenever practicable." Hritz v.

Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984) (citations omitted); see also Super 8

Motels, Inc. v. Kumar, No. 06-5231, 2008 WL 878426 (D.N.J. Apr. 1, 2008). Federal

Rule of Civil Procedure 55(b)(2) authorizes courts to enter a default judgment against "a

properly served defendant who fails to plead or otherwise defend an action." La.

Counseling and Family Servs. v. Makrygialos, LLC., 543 F. Supp. 2d 359, 364 (D.N.J.

2008) (citing Anchorage Assoc. v. Virgin Is. Bd. of Tax Rev., 922 F.2d 168, 177 n. 9 (3d

Cir. 1990) ("When a defendant fails to appear . . . the district court or its clerk is

authorized to enter a default judgment based solely on the fact that the default has

occurred").

A party is not entitled to the entry of a judgment of default as of right, because the

entry of such a judgment is left primarily to the discretion of the district court. Hritz, 732

F.2d at 1180. Furthermore, defendants are deemed to have admitted the factual

allegations of the Complaint by virtue of their default, except those factual allegations

related to the amount of damages. See 10A Charles A. Wright, Arthur R. Miller & Mary

Kay Kane, Federal Practice and Procedure § 2688, at 58-59 (3d ed. 1998 and Supp.

2013). The Court need not accept Plaintiff's legal conclusions, because "[e]ven after

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default . . . it remains for the court to consider whether the unchallenged facts constitute

a legitimate cause of action, since a party in default does not admit mere conclusions of

law." Id. § 2688, at 63. See also DirecTV v. Decroce, 332 F. Supp. 2d 715, 717 (D.N.J.

2004).

Before entering a judgment of default, a court must consider: (1) whether there

would be prejudice to the plaintiff if no default judgment was entered; and (2) whether a

meritorious defense has been asserted by the defendant, and (3) whether the defendant's

own culpable conduct caused his delay in responding to the Complaint. Chamberlain v.

Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). In considering these factors, a court must

apply a standard of liberality so that any doubt is resolved in favor of hearing claims on

their merits. Medunic v. Lederer, 533 F.2d 891, 894 (3d Cir. 1976).

In the absence of sufficient evidentiary support, the Court may order or permit the

plaintiff to provide additional evidence to support his or her allegations, See, e.g., Rose

Containerline, Inc. v. Omega Shipping Co., Inc., Civil No. 10-4345, 2011 WL 1564637, at

*3 (D.N.J. Apr. 25, 2011) (ordering the plaintiff to "provide the Court with additional

clarifying information to justify the damages sought"); Bridges Fin. Group, Inc. v. Beech

Hill Co., Inc., Civil No. 09-2686, 2011 WL 1485435, at *5 (D.N.J. Apr. 18, 2011)

(permitting the plaintiff to "file supplemental documentation regarding its claim for

interest and reasonable attorneys' fees and costs"). The Court may also conduct hearings

to ascertain the amount of damages owed to the plaintiff. Fed. R. Civ. P. 55(b)(2).

However, the Court is not required to conduct such hearings "as long as it ensures

that there is a basis for the damages specified in the default judgment." Trucking

Employees of North Jersey Welfare Fund, Inc.-Pension Fund v. Caliber Auto Transfer,

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Inc., Civil No. 08-2782, 2009 WL 3584358, at *3 (D.N.J. Oct. 27, 2009) (quoting

Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d

Cir. 1997)). For example, courts have held that hearings are unnecessary where "detailed

affidavits and documentary evidence" have been submitted to support the plaintiff's

claim for damages. See Tamarin v. Adam Caterers, 13 F.3d 51, 54 (2d Cir. 1993).

Additionally, if the damages are for a "sum certain or for a sum which can by

computation be made certain, a further evidentiary inquiry is not necessary and a district

court may enter final judgment." Bds. of Trs. Of the Operating Eng'rs Local 825 Welfare

Fund v. Robert Silagy Landscaping, Inc., Civil No. 06-1795, 2006 U.S. Dist. LEXIS

82475, at *9 (D.N.J. Nov. 9, 2006).

B. Analysis

1. Propriety of Default Judgment in This Case

The Court finds that the entry of a judgment of default is merited here because

Cracker Barrel will be prejudiced if no default judgment is entered, as it has no other

means of vindicating its claim against Schoor. Cracker Barrel has demonstrated that

Schoor was properly served, has not responded to Cracker Barrel’s Third-Party

Complaint, and that the Clerk entered default as required under Rule 55(b)(1). In

addition, Schoor has not asserted any meritorious defense to Cracker Barrel’s claims, nor

have they offered any excusable reason for default. Moreover, given that Schoor appears

to have been acquired by Birdsall, a judgment against Schoor may be the only way for

Cracker Barrel to seek relief. See Nieves v. Bruno Sherman Corp., 86 N.J. 361 (1981)

(where a successor corporation represents itself as in effect a continuation of the original

enterprise, a plaintiff would not be estopped from pursing liability).

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Accordingly, default judgment is appropriate in this case. The Court next looks to

the legal sufficiency of Cracker Barrel’s claims.

2. Whether Plaintiff States a Cause of Action

Cracker Barrel’s Third-Party Complaint states claims arising out of a breach of

contract. “Conclusions drawn with respect to the legal effect of any agreement . . . are

questions of law.” ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659,

665 (3d Cir. 1998); See also, Chemtech Intern., Inc. v. Chemical Injection Technologies,

Inc., 170 Fed. Appx. 805, 808 (3d Cir. 2006) (“Stating that a contract was breached is

stating a legal conclusion”). Thus, before granting default judgment, the Court must

consider whether Cracker Barrel’s factual allegations make out a claim for breach of

contract, which is a legal conclusion.

In its Third-Party Complaint, Cracker Barrel alleges few facts regarding the

alleged contract with Schoor. Aside from the factual allegations discussed above, Cracker

Barrel’s allegations against Schoor include the following:

b. Any obligation imposed upon [Cracker Barrel] to respond in damages
could only be as a result of operation of law . . . whereas the actual fault or
negligence was against [Schoor] . . . .

e. [Cracker Barrel] is entitled to a determination of the percentage of shares
of responsibility of [Schoor], whose fault contributed to the claimed injuries
and damages . . . .

f. Arising out of the relationship between the parties is a contractual
obligation entitling [Cracker Barrel] to indemnification from [Schoor] . . . .

i. [Schoor] was required to name [Cracker Barrel] as an additional insured on
its policy of insurance, and breached their agreement by failing to do so.

(Third-Party Compl. ¶ 1.) These contentions are not mere factual allegations; rather,

they are conclusions of law and determinations as to the legal obligations and

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entitlements of the parties under an agreement. As such, these allegations are neither

admitted to by Schoor nor presumptively accepted by the Court.2

Cracker Barrel has provided the agreement in question as part of its motion. The

agreement states that:

Schoor DePalma agrees subject to the provisions herein, to indemnify and
hold Client harmless from any damage, liability or costs including
reasonable attorneys’ fees and cost of defense to the extent caused by
Schoor DePalma’s negligent acts, errors or omissions and those of his or
her contractors, subcontractors or consultants or anyone for whom Schoor
DePalma is legally liable in the performance of professional services under
this agreement. Cracker Barrel (Client) is not obligated to indemnify
Schoor DePalma for Schoor DePalma’s own negligence. The Client agrees
to indemnify and hold Schoor DePalma harmless from any damage,
liability or cost including reasonable attorneys’ fees and cost of defense to
the extent caused by the Client’s negligent acts, errors or omissions and
those of his or her contractors, subcontractors or consultants or anyone for
whom the Client is legally liable. Schoor DePalma is not obligated to
indemnify the Client for the Client’s own negligence.”

Def. Ex. A, General Conditions of Service, ¶ 7.

In addition the agreement sets out damages provisions, with a Limitation of

Liability for $100,000.00. Id. at ¶ 8. The Court finds that Cracker Barrel is entitled to a

default judgment because the Court accepts, as true, Cracker Barrel’s factual allegations,

that Schoor provided to Cracker Barrel engineering and/or surveying services for the

Cracker Barrel Restaurant Store #484 property located in Mt. Laurel, New Jersey (the

“Mt. Laurel Cracker Barrel Store”). Schoor failed to provide proper engineering and/or

surveying services for the Mt. Laurel Cracker Barrel Store and failed and refused to

2

Cracker Barrel also alleges that “[Schoor] . . . is obligated . . . under the New

Jersey Tortfeasors Contribution Act . . . for their pro rata share of any judgment.” This,
too, is a legal conclusion, as are conclusions regarding Schoor’s negligence or fault.

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correct its deficient work, causing Cracker Barrel to incur engineering costs for the

redesign of the ramps at the premises and for construction costs to remediate the ramps

designed by Schoor. Schoor was required to name Cracker Barrel as an additional

insured on its policy of insurance and failed to do so. Accepting Cracker Barrel’s factual

allegations as true, under the terms of this agreement, Cracker Barrel makes out a claim

of indemnification and or breach of contract against Schoor and default judgment on

liability is appropriate.

3. Damages

The Court reserves decision on damages, reasonable attorneys’ fees, and costs,

because Cracker Barrel lacks sufficient evidentiary support to justify the damages and

requests a hearing on the matter.

III. Conclusion

The Court having considered Defendant/Third-Party Plaintiff’s written

submission, and for the reasons discussed above,

IT IS on this 11th day of July 2013 hereby ORDERED that the motion for default

judgment [31] is GRANTED as to liability only; and it is further

ORDERED that Defendant/Third-Party Plaintiff Cracker Barrel shall submit to

the Court any additional information justifying damages, including, but not limited to, a

list of witnesses, witness affidavits, the medical bills and records, a calculation of

damages, and any other documentation or proof for consideration no later than July 19,

2013. Upon review of the submission, the Court will schedule a damages hearing.

S/ Joseph H. Rodriguez
Hon. Joseph H. Rodriguez,
United States District Judge

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