UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

NGENA FOUNDATION, Plaintiff, v. Civil Action No. 20-793 (CKK) F&R CROUS FOUNDATION, Defendant.

MEMORANDUM OPINION (April 20, 2021)

Plaintiff Ngena Foundation filed a Complaint against Defendant F&R Crous Foundation

on March 23, 2020, alleging that Defendant breached its contract with Plaintiff by failing to

perform on its guarantee for a loan repayment agreement. Compl. ¶¶ 19–20, ECF No. 1. Although

properly served with the Complaint and Summons, Defendant failed to respond to the Complaint,

and the Clerk of the Court entered default against Defendant on September 18, 2020. See Clerk’s

Entry of Default, ECF No. 13. Pending before the Court is Plaintiff’s [15] Motion for Default

Judgment (“Pl.’s Mot.”). Upon consideration of Plaintiff’s submissions, the attachments thereto,

the relevant legal authorities, and the record as a whole, the Court GRANTS Plaintiff’s Motion

for Default Judgment.

I. BACKGROUND

Plaintiff Ngena Foundation, a non-profit organization, entered into a Loan Agreement with

Ocean Security International (“OSI”) in November 2014, in which Plaintiff agreed to loan OSI

$500,000 and OSI agreed to repay the loan, with an annual interest rate of 9% for the first year and

12% for subsequent default years, by November 2015. Compl. ¶¶ 7–8; see Compl. Ex. B, Loan

Agreement by and between OSI and the Ngena Foundation (“Loan Agreement”), ECF No. 1-2.

The Loan Agreement also included a guarantee by Defendant to ensure repayment of the loan.

1 Compl. ¶ 9; Compl. Ex. C, Memorandum of Undertaking passed on October 29, 2014

(“Memorandum of Undertaking”), ECF No. 1-3 (“[Defendant] guarantees that if in such a case

that [OSI], for whatever reason, cannot fulfill its obligations with regards to the repayment of the

loan . . . [Defendant] will repay the outstanding capital and interested balance owed by [OSI] to

[Plaintiff].”). On July 20, 2016, Defendant again provided a guarantee to Plaintiff. Compl. ¶ 12;

Compl. Ex. A, Mutual Cooperation and Release Agreement (“MCR Agreement”) § 2, ECF No.

1-1 (“[Defendant] shall be liable for the remaining portion of the Loan Amount not satisfied by

[OSI].”). According to the Complaint, however, OSI repaid only $1,904 of the amount owed to

Plaintiff, with an outstanding balance of $498,096, plus interest, still due. Compl. ¶ 13.

On June 18, 2019, the parties entered into a Tolling Agreement, in which Defendant was

given additional time to “raise funds to pay the Loan Amount” and both parties agreed to toll all

statute of limitations and other time-related defenses. Id. ¶ 14; Compl. Ex. D, Tolling and

Standstill Agreement (“Tolling Agreement”) at 1, ECF No. 1-4. However, in November 2019,

after repeatedly requesting Defendant to pay the outstanding loan amount without success, Plaintiff

provided Defendant with the required 30-day notice of its intent to terminate the Tolling Agreement

and initiate legal proceedings against Defendant. See Compl. ¶¶ 15–17.

Plaintiff commenced the present action on March 23, 2020, claiming that it is entitled to

damages of $498,096 for the outstanding loan amount, as well as pre-judgment and post-judgment

interest and reasonable attorneys’ fees and costs. Id. ¶ 21. Defendant was properly served with

the Complaint and Summons on May 29, 2020, and therefore was obligated to respond by June

19, 2020. See Aff. of Return Serv., ECF No. 8. The parties then engaged in settlement negotiations

and filed a joint motion for an extension of time for Defendant to file an answer to the Complaint,

see ECF No. 9, which the Court granted and ordered Defendant to file its response by July 20,

2 2020, see July 1, 2020 Minute Order. When Defendant did not file an answer by July 28, 2020,

the Court ordered Defendant to file a response to the Complaint by August 14, 2020, or “risk

possible default actions.” July 28, 2020 Order, ECF No. 10. Defendant nonetheless failed to file

an answer or otherwise respond to the Complaint. On September 9, 2020, the Court ordered

Plaintiff to “file for default or take other appropriate action to prosecute these claims or the Court

will dismiss the case without prejudice for want of prosecution.” Sept. 9, 2020 Order, ECF

No. 11. 1 On September 18, 2020, the Clerk of the Court, upon receiving Plaintiff’s request for

entry of default, see ECF No. 12, entered default against Defendant, see Clerk’s Entry of Default.

On September 30, 2020, Plaintiff filed the pending Motion for Default Judgment. As of the date

of this Memorandum Opinion, Defendant has not entered an appearance in this case.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(a) provides that the clerk of the court “must enter [a]

party’s default” when a “party against whom a judgment for affirmative relief is sought has failed

to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” Fed. R. Civ.

P. 55(a). Once a default has been entered by the clerk, a court may enter a default judgment against

that party pursuant to Rule 55(b). See Fed. R. Civ. P. 55(b). The “determination of whether default

judgment is appropriate is committed to the discretion of the trial court.” Int’l Painters & Allied

Trade Indus. Pension Fund v. Auxier Drywall, LLC,

(D.D.C. 2008) (citing

Jackson v. Beech,

(D.C. Cir. 1980)).

Upon entry of default by the clerk of the court, the “defaulting defendant is deemed to

admit every well-pleaded allegation in the complaint.” Int’l Painters & Allied Trade Indus.

1 The Court mailed a copy of this order to Defendant, but it was returned as “undeliverable.” See ECF No. 14. Plaintiff emailed a copy of the Order to Defendant on September 30, 2020. See Pl.’s Mot. at 3 n.1.

3 Pension Fund v. R.W. Armine Drywall Co.,

(D.D.C. 2002) (citation

omitted). “Although the default establishes a defendant’s liability, the court is required to make

an independent determination of the sum to be awarded unless the amount of damages is certain.”

(citing Adkins v. Teseo,

(D.D.C. 2001)). In ruling on such a motion,

“the court may rely on detailed affidavits or documentary evidence to determine the appropriate

sum for the default judgment.”

(citing United Artists Corp. v. Freeman,

(5th

Cir. 1979)). The moving party is “entitled to all reasonable inferences from the evidence offered.”

(citation omitted).

III. DISCUSSION

Defendant has failed to answer the Complaint or otherwise defend this action.

Consequently, the Clerk of the Court entered default pursuant to Rule 55(a). Plaintiff now moves

the Court to grant a default judgment against Defendant pursuant to Rule 55(b). Specifically,

Plaintiff seeks a monetary award for the outstanding loan amount, pre-judgment and post-judgment

interest, and reasonable attorneys’ fees and costs. The Court concludes that the standard for default

judgment has been satisfied and that Plaintiff is entitled to damages and reasonable attorneys’ fees

and costs.

A. Default Judgment

To warrant default judgment, the defendant “must be considered a ‘totally unresponsive’

party, and its default plainly willful, reflected by its failure to respond to the summons and

complaint, the entry of default, or the motion for default judgment.” Auxier Drywall,

(quoting Gutierrez v. Berg Contracting Inc., No. 99-3044,

, at *1

(D.D.C. Mar. 20, 2000)). Where, as here, there is a complete “absence of any request to set aside

the default or suggestion by the defendant that it has a meritorious defense, it is clear that the

4 standard for default judgment has been satisfied.”

(internal quotation marks and citation

omitted); see United States v. Bentley,

(D.D.C. 2010) (same).

In the present case, the Clerk of the Court entered default against Defendant, and therefore

the factual allegations in the Complaint are taken as true. See R.W. Amrine Drywall,

. The Court finds that Plaintiff’s Complaint sufficiently alleges facts to support its breach

of contract claim against Defendant. Under D.C. law, a claim of breach of contract includes four

elements: (1) a valid contract between the parties; (2) an obligation or duty arising out of the

contract; (3) a breach of that duty; and (4) damages caused by the breach. Henok v. Chase Home

Fin., LLC,

(D.D.C. 2013) (citation omitted); see MCR Agreement § 11

(“This Agreement shall be governed by the laws of the District of Columbia.”). Here, the

Complaint alleges that the parties entered into an agreement in which Defendant guaranteed to

repay Plaintiff the outstanding loan amount not paid by OSI. Compl. ¶ 12; MCR Agreement § 2

(“[Defendant] shall be liable for the remaining portion of the Loan Amount not satisfied by

[OSI].”). Defendant was therefore obligated to pay Plaintiff when OSI defaulted and repaid only

$1,904 of the $500,000 loan amount. Compl. ¶¶ 8, 13. Defendant then breached this obligation

when it failed to perform on its guarantee to Plaintiff, resulting in damages suffered by Plaintiff as

it remains unpaid for the outstanding loan amount of $498,096. Id. ¶¶ 20, 21. Accordingly, the

Court concludes that Defendant is liable to Plaintiff for the outstanding loan amount plus interest

at the rates specified in the parties’ agreement. See Loan Agreement §§ 8.2, 8.4.

B. Damages & Interest

Although the default establishes Defendant’s liability, the Court must make an independent

determination of the sum to be awarded unless the amount of damages is certain. See Adkins,

. In making such a determination, the Court may conduct a hearing, see Fed.

5 R. Civ. P. 55(b)(2), but it is not required to do so if the Court “ensure[s] that there [is] a basis for

the damages specified in the default judgment,” Boland v. Elite Terrazzo Flooring, Inc.,

(D.D.C. 2011) (alterations in original) (citation omitted); see also Adkins,

(stating court may instead “rely on detailed affidavits or documentary evidence to

determine the appropriate sum”). The district court has “considerable latitude” in deciding the

amount of damages. Boland,

(citation omitted).

The Court concludes that Plaintiff has produced competent evidence—in its Complaint and

the exhibits attached thereto—that Defendant is liable to Plaintiff for the outstanding loan amount,

plus the 9% interest rate provided prior to default and the 12% interest rate after default, as agreed

upon in the underlying agreements. See Loan Agreement §§ 8.2, 8.4 (“The parties agree that OSI

will repay the loan and all the [9%] interest in full within twelve (12) months. . . . [I]f the loan and

all interest is not repaid within the year . . . then OSI will be liable to pay a default interest of 3%

above the interest rate . . . on any outstanding amount of the loan.”); Memorandum of Undertaking

at 1 (“[Defendant] guarantees that if in such a case that [OSI], for whatever reason, cannot fulfill

its obligation with regards to the repayment of the loan . . . [Defendant] will repay the outstanding

capital and interest balanced owed by [OSI] to [Plaintiff].”). The operative agreement between

the parties provides “sums certain” because it requires Defendant to ensure repayment of the

outstanding loan amount, with the specified interest rates. See Combs v. Coal & Mineral Mgmt.

Servs., Inc.,

(D.D.C. 1984) (awarding monetary damages when plaintiff’s

affidavit set forth a calculation of the requested damages that the court was able to ascertain as

accurate); Boland,

(concluding that a declaration submitted by plaintiffs from

someone with “personal knowledge of the facts” was sufficient to establish damages with

reasonable certainty). Accordingly, the Court shall award Plaintiff damages in the amount of

6 $498,096 for the outstanding loan amount and $369,064.62 for the pre-judgment interest amount. 2

See Loan Agreement §§ 8.2, 8.4 (providing the applicable interest rates); Rebecca L. D. Gordon

Aff. (“Gordon Aff.”) ¶ 9, ECF No. 15-1.

Plaintiff also seeks post-judgment interest, to be determined at the time of payment. See

Pl.’s Mot. at 2, 6; Compl. ¶ 21. Under federal law, “[i]nterest shall be allowed on any money

judgment in a civil case recovered in a district court[,]” and that “[s]uch interest shall be calculated

from the date of the entry of judgment[.]”

(a). Application of § 1961(a) is

mandatory, not discretionary. See, e.g., Cont’l Transfert Technique Ltd. v. Fed. Gov't of Nigeria,

(D.D.C. 2012). Although parties may contract around § 1961(a), “to do

so, they must specifically contract around the general rule that a cause of action reduced to

judgment merges into the judgment and the contractual interest rate therefore disappears for post-

judgment purposes.” Qatar Nat’l Bank v. Winmar,

(D.D.C.), vacated in

part on other grounds,

(D.D.C. 2011) (quoting In re Riebesell,

(10th Cir. 2009) (internal citations and quotation marks omitted)). To satisfy this standard,

the parties’ contract must expressly state that the chosen interest rate specifically applies to

judgments or judgment debts. See FCS Advisors, Inc. v. Fair Fin. Co.,

(2d Cir.

2010) (holding that § 1961 applied where the parties’ agreement failed to specify that the selected

interest rate applied to either judgements or judgment debts).

2 Plaintiff’s counsel provided an estimate of the pre-judgment interest amount in Plaintiff’s Motion filed on September 30, 2020, which calculated the amount of interest through that date. See Gordon Aff. ¶ 9. The Court calculated the figure provided here by applying (1) a 9% interest rate to the outstanding loan amount for the first year after default; (2) a 12% interest rate to that same amount until OSI paid $1,904 to Plaintiff on July 20, 2016; and (3) a 12% interest rate to $498,096 (the principal minus the amount repaid by OSI) through the date of the Court’s Order granting Plaintiff’s Motion for Default Judgment, April 20, 2021.

7 Here, the Court finds that the parties’ agreement does not meet this standard. The Loan

Agreement states that “if the loan and all interest is not repaid within the year . . . then OSI will be

liable to pay a default interest rate of 3% above the [annual] interest rate [of 9%] on any outstanding

amount of the loan.” Loan Agreement §§ 8.2, 8.4. It further specifies that the agreement shall

“endure from the effective date until the loan and cost of capital is repaid to [Plaintiff] in full.” Id.

§ 9.2. These provisions, however, do not explicitly state that the specified interest rates apply to

“judgments” or “judgment debts.” Qatar Nat’l Bank,

. Accordingly, the

Court shall set the post-judgment interest rate in accordance with § 1961(a), which directs that the

rate be “equal to the weekly average 1-year constant maturity Treasure yield, as published by the

Board of Governors of the Federal Reserve System, for the calendar week preceding the date of

the judgment.” § 1961(a). For the calendar week preceding the date of this Memorandum Opinion

and accompanying Order, that rate is 0.06 percent. See H.15 Selected Interest Rates, Federal

Reserve, https://www.federalreserve.gov/releases/h15/ (last accessed Apr. 20, 2021). The Court

shall therefore award Plaintiff post-judgment interest at that rate, with the amount to be determined

at the date of payment.

C. Attorneys’ Fees

Next, the Court considers Plaintiff’s argument that it is entitled to attorneys’ fees and costs

for both the court-related litigation and the settlement negotiations related to this matter. Pl.’s Mot.

at 7. Plaintiff filed in support of its Motion an affidavit of Rebecca Gordon, counsel with the law

firm Arnold & Porter Kay Scholer LLP, which represented Plaintiff in this action. See generally

Gordon Aff. According to Ms. Gordon’s affidavit, the total sum for attorneys’ fees and costs is

$72,564.07. See id. ¶ 15 (accompanying table with breakdown of costs). Specifically, Plaintiff

requests a monetary award that includes $34,796.49 for litigation and default-related expenses and

8 $37,767.58 for the fees and costs incurred from engaging in settlement negotiations with

Defendant. Id. ¶¶ 15–16.

As an initial matter, the Court finds that Plaintiff is entitled to attorneys’ fees and costs

based on the underlying agreement. The MCR Agreement explicitly states that “[i]n the event of

any dispute arising from [] this Agreement . . . the prevailing Party shall be entitled . . . to recover

from [the] non-prevailing Party the reasonable attorneys’ fees and costs.” MCR Agreement § 4

(emphasis added). By obtaining a default judgment against Defendant, Plaintiff qualifies as a

“prevailing party” entitled to such an award. See Hensley v. Eckerhart,

(1983)

(internal quotation marks and citation omitted) (stating plaintiffs are “prevailing parties for

attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some

of the benefit the parties sought in bringing suit”). Accordingly, the Court finds Plaintiff has

established that it is entitled to $34,796.49 for litigation and default-related attorneys’ fees and

costs.

Plaintiff also seeks to recover the costs associated with “attempting to settle the dispute

outside of court,” and Ms. Gordon’s affidavit represents that the costs and fees related to settlement

negotiations amount to approximately $37,767.58. Pl.’s Mot. at 7; Gordon Aff. ¶ 15. First, the

Court notes that it is not unusual for courts to include settlement negotiation expenses as part of

the monetary award for attorneys’ fees and costs. See, e.g., Mich. v. E.P.A.,

(D.C. Cir. 2001) (finding travel fees incurred during settlement negotiations “reasonable” and

declining to deduce the award for attorneys’ fees for such items); Weisberg v. U.S. Dep’t of Just.,

No. CV 75-1996,

, at *11 (D.D.C. May 28, 1987) (permitting plaintiff’s counsel

to include hours spent on settlement negotiations in its motion for attorney’s fees). Moreover, the

operative agreement between the parties indicates that Plaintiff is entitled to expenses incurred

9 outside of litigation. See MCR Agreement § 12 (“In the event of any dispute arising from or related

to this Agreement, whether such dispute involves litigation or not, the prevailing Party shall be

entitled . . . to recover from [the] non-prevailing Party the reasonable attorneys’ fees and costs.”).

Accordingly, the Court shall award Plaintiff $72,564.07 in attorneys’ fees and costs, which

includes the costs and fees incurred by Plaintiff in this litigation, as well as those incurred while

attempting to reach a settlement agreement with Defendant.

IV. CONCLUSION

For the reasons provided herein, the Court finds that Plaintiff has met all necessary

preconditions to obtain a default judgment against Defendant and that a default judgment is

appropriate on this record. The Court therefore GRANTS Plaintiff’s [15] Motion for Default

Judgment. An appropriate Order accompanies this Memorandum Opinion.

Date: April 20, 2021 /s/ COLLEEN KOLLAR-KOTELLY United States District Judge

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