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Functional Products Trading, Sa v. Jitc, LLC

United States District Court, N.D. Georgia, Atlanta Division

July 29, 2014

FUNCTIONAL PRODUCTS TRADING, S.A., Plaintiff and Counterclaim Defendant,
v.
JITC, LLC and ROBERT JANITZEK, Defendants, Counterclaim Plaintiffs Third-Party Plaintiffs,
v.
I-GRAIN, LLC and LORIN A. TARR, Third-Party Defendants.

OPINION AND ORDER

WILLIAM S. DUFFEY, Jr., District Judge.

This matter is before the Court on Magistrate Judge Alan J. Baverman's Final Report and Recommendation ("R&R") [168] which recommends granting Plaintiff's Motion for Default Judgment ("Motion") [159] against Defendants JITC, LLC ("JITC") and Robert Janitzek ("Janitzek") (collectively, "Defendants"). The Magistrate Judge also recommended that default judgment be entered against Defendants on Counts I, II, III, IV, VI, VII, X, XI, and XIII of Plaintiff's Second Amended Complaint [99] (the "Amended Complaint") and that Defendants be held jointly and severely liable. The Magistrate Judge further recommended that Plaintiff be awarded compensatory damages (but not including lost profits), punitive damages, costs, and attorney's fees.

I. BACKGROUND

On February 2, 2012, Plaintiff Functional Products ("Plaintiff") filed a complaint seeking damages, replevin and specific performance against I-Grain, LLC ("I-Grain") and Lorin Tarr ("Tarr") for breach of an agricultural sales contract.[1]

On February 24, 2012, Plaintiff filed its first amended complaint to add JITC and Janitzek as defendants. (See [32].)

On July 31, 2012, I-Grain, LLC and Lorin Tarr settled with Plaintiff and were dismissed from the action. (See [93].)

On September 7, 2012, Plaintiff filed its Second Amended Complaint [99] which included claims for fraud, violations of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), and violations of the Georgia Racketeer Influenced and Corrupt Organizations Act ("Georgia RICO"). Plaintiff seeks compensatory damages, attorney's fees, punitive damages and declaratory relief. (See [99].)[2]

On September 21, 2012, Defendants filed their Answer, Counterclaim, Impleader, and Crossclaim (the "Answer"). (See [107].) Defendants included in their Answer counterclaims against Plaintiff, and made crossclaims against I-Grain and Tarr.

On November 11, 2012, Plaintiff filed an Expedited Motion to Compel Deposition of Defendants and for an Award of Sanctions (the "Motion to Compel").[3](See [117].) On December 21, 2012, the Magistrate Judge held a hearing on the Motion to Compel. The Magistrate Judge ordered Janitzek to appear for a deposition at his attorneys' Atlanta office on a date between February 4, 2013, and February 8, 2013. (See [131] at 2.) Finding that sanctions were not yet warranted, the Magistrate Judge warned that if Janitzek failed to appear for a deposition in February 2013, he would recommend that the Court strike Defendants' Answer and enter a default judgment against them. (See [142] at 5; see also [144] at 4.)

On February 6, 2013, Janitzek again failed to appear to be deposed. (See [142] at 5-6.)[4] On February 21, 2013, Plaintiff filed its Motion for Sanctions. (See [142].)

On June 7, 2013, the Magistrate Judge issued his R&R [154] recommending that the Court grant Plaintiff's Motion for Sanctions. On August 20, 2013, the Court adopted the Magistrate Judge's R&R. (See [158].) The Court also directed the Clerk to strike Defendants' Answers, dismiss Defendants' counterclaims, and enter default against Defendants.

On September 16, 2013, Plaintiff moved for default judgment against Defendants. Plaintiff requests that the Court:

1. Enter judgment on Counts I, II, III, IV, VI, VII, X, XI, and XIII of the Amended Complaint;
2. Declare that the following agreements are invalid and rescinded on account of Defendants' fraud: (i) the November 14, 2011, Sales Contract; (ii) the December 15, 2011, White Seed Contract; and (iii) the January 27, 2012, Release;
3. Award compensatory damages in the amount of $5, 401, 243.05.00;
4. Award punitive damages in the amount of at least $1, 000, 000.00;
5. Award reasonable attorneys' fees in the amount of $432, 760.00;
6. Award taxable costs in the amount of $9, 601.62;
7. Award [Plaintiff] post-judgment interest as provided by Georgia law;
8. Hold Defendants jointly and severally liable for the Court's judgment; and
9. Award [Plaintiff] such other and further relief as the Court deems

just, equitable and proper."[5]

(See Mot. at 14-15.)

On January 9, 2014, the Magistrate Judge reviewed Plaintiff's Motion and ordered a hearing pursuant to Rule 55(b)(2)(C) of the Federal Rules of Civil Procedure.[6] The hearing was conducted on February 18, 2014. At the hearing, Plaintiff presented affidavit testimony and documents to support its requested damages, attorneys' fees, and costs. Defendants and Defendants' counsel did not attend the hearing.

On May 8, 2014, the Magistrate Judge issued his R&R recommending that Plaintiff's Motion be granted. The Magistrate Judge also recommended that default judgment be entered against Defendants on Counts I, II, III, IV, VI, VII, X, XI, and XIII of the Amended Complaint and that Defendants be held jointly and severely liable. The Magistrate Judge further recommended that Plaintiff be awarded compensatory damages (not ...


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