United States District Court, D. New Hampshire
Sushi Avenue, Inc.
Philbrick's Fresh Market, LLC
REPORT AND RECOMMENDATION
K. Johnstone United States Magistrate Judge
plaintiff, Sushi Avenue, Inc. (“Sushi Avenue”),
brought suit against Philbrick's Fresh Market, LLC
(“Philbrick's”) alleging claims arising from
an unpaid debt. The debt relates to an agreement under which
Sushi Avenue operated a sushi kiosk in a Philbrick's
grocery store. On August 12, 2019, the Chief Deputy Clerk of
Court entered default against Philbrick's for failure to
retain new counsel within 21 days of its previous
counsel's withdrawal from the case. See doc. no. 12.
Before the court for Report and Recommendation is the
plaintiff's motion for default judgment (doc. no. 14).
See Fed.R.Civ.P. 55(b)(2). For the reasons that follow, the
court recommends that the plaintiff's motion be granted
in part and denied in part.
default is entered and when the amount at issue is not a sum
certain, “the party must apply to the court for a
default judgment.” Fed.R.Civ.P. 55(b)(2); see also
KPS & Assocs., Inc. v. Designs by FMC, Inc., 318
F.3d 1, 19 (1st Cir. 2003). Before entering a default
judgment, the court “may examine a plaintiff's
complaint, taking all well-pleaded factual allegations as
true, to determine whether it alleges a cause of
action.” Ramos-Falcón v. Autoridad de
Energía Electríca, 301 F.3d 1, 2 (1st Cir.
2002) (citing Quirindongo Pacheco v. Rolon Morales,
953 F.2d 15, 16 (1st Cir. 1992)). The defaulted party is
“taken to have conceded the truth of the factual
allegations in the complaint . . . .”
Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59, 62-63 (1st
Cir. 2002) (quoting Franco v. Selective Ins. Co.,
184 F.3d 4, 9 n.3 (1st Cir. 1999)). The defaulted party does
not, however, “admit the legal sufficiency of those
claims.” 10 James Wm. Moore, Moore's Federal
Practice § 55.32[b] (3d ed. 2013). In short,
“before entering default judgment, the court must
determine whether the admitted facts state actionable
claims.” United States v. Sullender, No.
16-cv-523-LM, 2018 WL 1368040, at *1 (D.N.H. Mar. 16, 2018).
virtue of its default, Philbrick's concedes the following
facts alleged in the plaintiff's complaint. Sushi Avenue,
a Minnesota corporation with its principal place of business
in Minnesota, operates sushi kiosks out of grocery stores
across the United States. See doc. no. 1 ¶¶ 1, 6.
On or about August 2, 2017, Sushi Avenue entered into an
agreement (the “Agreement”) with Philbrick's
to operate a sushi kiosk in its Portsmouth, New Hampshire
retail store. See doc. no. 1 ¶ 7; doc. no. 1-1. Under
the Agreement, Sushi Avenue would provide sushi products and
related services at the kiosk and Philbrick's would pay
Sushi Avenue 75% of the actual retail sales of sushi products
sold. See doc. no. 1 ¶ 8; doc. no. 1-1. These payments
would be due on a weekly basis. See doc. no. 1-1. The
Agreement required Philbrick's to provide Sushi Avenue a
regular and accurate accounting of all sushi sales. See id.
January 1, 2018 and March 11, 2018,  Philbrick's made only
some of its required payments to Sushi Avenue. See doc. no. 1
¶ 9. Between March 11, 2018 and August 19, 2018,
Philbrick's failed to make any payments to Sushi Avenue,
while Sushi Avenue continued to provide products and services
to Philbrick's. See doc. no. 1 ¶¶ 9, 17. On
September 4, 2018, Sushi Avenue sent a letter to
Philbrick's demanding payment, pursuant to the Agreement,
by September 10, 2018. See doc. no. 1 ¶ 11. It is
undisputed that the outstanding balance was $80, 939.90. See
doc. no. 1 ¶ 22. On September 6, 2018, Philbrick's
sent a “good faith” payment of $5, 000 toward the
$80, 939.90 balance but stated it could not make further
payments. See doc. no. 1 ¶ 12. On September 13, 2018,
Sushi Avenue indicated that the $5, 000 payment was
insufficient and demanded payment in full or agreement to a
payment plan. See doc. no. 1 ¶ 13. Sushi Avenue has not
presented the “good faith” check for payment. See
Avenue brings three claims against Philbrick's: (1)
Breach of contract (Count I); (2) Account stated (Count II);
and (3) Unjust enrichment (Count III). Sushi Avenue seeks
$80, 939.90 in damages for the amount owed under the
Agreement, plus interest. Sushi Avenue also seeks
attorneys' fees and costs.
Breach of Contract (Count I)
New Hampshire law,  “a breach of contract occurs when
there is a failure without legal excuse to perform any
promise which forms the whole or part of a contract.”
BAE Sys. Info. & Elecs. Sys. Integration, Inc. v.
SpaceKey Components, Inc., 941 F.Supp.2d 197,
213 (D.N.H. 2013), aff'd, 752 F.3d 72 (1st Cir. 2014)
(quoting Axenics, Inc. v. Turner Constr.
Co., 164 N.H. 659, 668 (2013)) (brackets and internal
quotation marks omitted).
the Agreement, Philbrick's was required to pay Sushi
Avenue 75% of the actual retail sales for sushi products
sold. See doc. no. 1 ¶ 8. In its complaint, Sushi Avenue
alleges that Philbrick's breached the Agreement by making
sporadic payments between January 1, 2018 and March 11, 2018,
and no payments between March 11, 2018 and August 19, 2018,
while Sushi Avenue continued to perform its contractual
duties. See doc. no. 1 at ¶¶ 9, 16-17. Sushi
Avenue's complaint asserts that these missed payments