OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AGAINST NEDC AND AWARDING DAMAGES (Doc. 170) Plaintiff Busrel Inc. (“Plaintiff”) brings this action against Julie Dotton (“Ms. Dotton”), KRP Holdings, LLC (“KRP”), SBM Holdings, LLC (“SBM”), Jonathan Cannon (“Mr. Cannon”), Sean Gauthier (“Mr. Gauthier”), New England Development Corp. (“NEDC”), and Montrose Capital, LLC (“Montrose Capital”) (collectively, “Defendants”), alleging that Defendants improperly retained $7,950,000 of Plaintiff’s payment after Plaintiff and KRP agreed to cancel a contract whereby KRP would supply Plaintiff with personal protective equipment (“PPE”). Plaintiff is represented by Judith A. Archer, Abigail Fay Schwarz, and Victoria Vance Corder. Mr. Cannon and SBM are represented by David Bolton. Mr. Gauthier is self-represented. Montrose Capital and NEDC are not represented. See Kaplan v. Bank Saderat PLC, 77 F.4th 110, 116 n.8 (2d Cir. 2023) (“A corporation may not appear in federal court pro se, and default may enter against a corporate defendant that fails to defend itself in the action by retaining counsel.”). I. Procedural History. Plaintiff filed a Complaint against Ms. Dotton, KRP, and SBM on December 2, 2020. (Doc. 1.) On May 4, 2022, the court entered partial judgment in favor of Plaintiff against SBM in the amount of $2,750,000. (Doc. 78.) Plaintiff filed an Amended Complaint on June 9, 2022, against Mr. Cannon, Ms. Dotton, Mr. Gauthier, KRP, Montrose Capital, NEDC, and SBM. (Doc. 87.) He alleged claims against NEDC for unjust enrichment (Count IV) and conversion (Count VI). On November 1, 2022, the court granted in part and denied in part Plaintiff’s motion for default judgment, awarding Plaintiff damages against Ms. Dotton and KRP jointly and severally on its breach of contract and fraudulent inducement claims, (Doc. 115), and entered partial final judgment in favor of Plaintiff against these Defendants on December 16, 2022, in the amount of $7,950,000 plus $1,811,293.15 in prejudgment and postjudgment interest. (Doc. 127.) On November 4, 2022, Mr. Gauthier and Montrose Capital filed an answer to the Amended Complaint and asserted crossclaims against Mr. Cannon, Ms. Dotton, KRP, NEDC, and SBM. (Doc. 118.) NEDC answered the crossclaims, but not the Amended Complaint, on November 17, 2022. (Doc. 122.) The court granted in part and denied in part Mr. Cannon’s and NEDC’s motions to dismiss the claims asserted against them on January 13, 2023. (Doc. 130.) Thereafter, NEDC did not participate in discovery nor secure substitute counsel after its previous counsel withdrew. On June 16, 2023, Plaintiff applied for an Entry of Default against NEDC, (Doc. 148), and the Clerk of Court filed an Entry of Default on July 11, 2023, pursuant to Fed. R. Civ. P. 55(a). (Doc. 151.) Pending before the court is Plaintiff’s motion for default judgment against NEDC under Fed. R. Civ. P. 55(b)(2) filed on November 22, 2023, on its conversion and unjust enrichment claims for $7,950,000 or, alternatively, $2,750,000. (Doc. 170.) On February 23, 2024, the court issued a text order to show cause as to why default judgment should not be entered against NEDC, requested NEDC to submit briefing within fourteen days, and advised that the court would issue an entry of default judgment against NEDC absent compelling circumstances if it failed to comply. (Doc. 181.) No further filings have been received from NEDC as of the date of this Opinion and Order. II. Findings of Fact. The following findings of fact are derived from the Amended Complaint’s allegations, which are taken as true.1 Plaintiff is a Canadian company and was an official provider of PPE during the COVID-19 pandemic to the provinces of Quebec and Alberta. SBM is a limited liability company that is incorporated under the laws of Wyoming and has a mailing address in New York. NEDC is a business incorporated under the laws of Vermont with its principal place of business at Mr. Cannon’s home address in New York. At all relevant times, Mr. Cannon was the managing director and sole owner of SBM and the president, vice-president, secretary, and sole owner of NEDC. Mr. Cannon controls these entities’ bank accounts. On April 14, 2020, Plaintiff entered into a contract with Ms. Dotton and KRP to purchase two million NIOSH N95 masks and ten million SMS 3, 3-ply masks in exchange for payment of $8,200,000 USD (the “Bill of Sale”). On April 15, 2020, in connection with the Bill of Sale, the parties entered into an escrow agreement (the “Escrow Agreement”) whereby Plaintiff would send $8,200,000 to SBM’s counsel David Bolton2 (the “Escrow Agent”). Plaintiff wired $8,200,000 to the Escrow Agent on April 15, 2020. On April 17, 2020, the Escrow Agent released the $8,200,000 payment to a Citibank account owned by SBM pursuant to Ms. Dotton’s instructions. SBM and NEDC were not parties to the Bill of Sale. Ms. Dotton did not inform Plaintiff that its money was released to SBM. Mr. Cannon transferred $2,750,000 from SBM’s account to NEDC on April 20, 2020. After the money reached NEDC’s account, Mr. Cannon “used the money as if it were his own” by transferring it to his family members, other NEDC bank accounts, and other companies, rather than procuring PPE for Plaintiff. (Doc. 87 at 9, 39.) On April 21, 2020, Ms. Dotton represented to Plaintiff, “We can refund your money and part ways…I’m working out the refund with them now[,]” and “ [w]e are refunding you. We can’t meet your timeframe[.]” Id. at 10, 41 (internal quotation marks omitted). The parties agreed to cancel the Bill of Sale, and KRP agreed to refund Plaintiff’s money. One day later, Mr. Cannon disbursed Plaintiff’s funds in the following manner: $50,000 to “VWA Advisors”; $42,924 to “Woods Oviatt”; and $88.89 to “Optimal Health[.]” Id.
