UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

_________________________________________ ) MELEHY & ASSOCIATES LLC, ) ) Plaintiff, ) ) v. ) Civil Action N o. 18-2554 (ESH) ) ERMIAS SIEFE HAILE, et al. , ) ) Defendants. ) _________________________________________ )

MEMORANDUM OPINION In this breach of contract ac tion, plaintiff Melehy and Associa tes LLC (the “Melehy Law Firm”) has moved pursuant to Feder al Rule of Procedure 55(b) fo r entry of a default judgment against individual defendants E rmias Siefe Haile and Tewodage M ulugeta. (Mot. for Default Judgment, ECF No. 10.) For the re asons stated herein, the moti on is granted.
BACKGROUND The Melehy Law Firm “is a limited liability company organized u nder the laws of the State of Maryland with its principal place of business in the S tate of Maryland.” (Compl. ¶ 5.) It “provides legal services to indi vidual and corporate clients inMaryland and the District of Columbia in connection with, am ong other things, seeking relief under the United States Bankruptcy Code.” ( Id .) Vision Investment LLC (“Vision” or “Vision LLC”) is “a limited liability company organized under the laws of the D istrict of Columbia for the pu rpose of owning and managing a multi-unit rental property located in the District of Columbia. ” ( Id . ¶ 6.) Haile and Mulugeta are the only two members of Visi on LLC, and both are citizens of Vi rginia. ( Id . ¶¶ 1, 6.)2 On or about January 9, 2017, Haile a nd Mulugeta retained the Me lehy Law Firm to represent Vision LLC in connecti on with filing for Chapter 11 b ankruptcy. ( Id . ¶ 8.) The terms under which the Melehy Law Firm a greed to represent Vision LLC are set forth in a Retainer Agreement. ( Id . ¶ 9; see also Mot. for Default Judgment, E x. D (copy of signed Retainer Agreement).) The Retainer Agreement was signed by Haile and Mu lugeta in their capacity as members of Vision and also indi vidually as guarantors. ( See Compl. ¶ 9; see also Retainer Agreement at 6 (“As members of V ision Investment LLC, we have r ead, understand and agree to the above fee arrangement. We understand that we are jointly a nd severally liable for all amounts due under this retainer ag reement.”).) The Retainer Ag reement provides that “any billed balance which remains unpaid for more than 30 days conti nues to accrue interest at the rate of 18 percent per annum.” ( Compl. ¶ 14; Retainer Agreemen t ¶ 22(i).) It further provides that Vision LLC would pay any att orney’s fees and costs incurre d “in connection with any collection efforts undertaken i n order to secure payment of any sums that become due under the Retainer Agreement.” (Compl. ¶ 10; Retainer Agreement ¶ 22 (iv ) & (v).) In addition, Haile and Mulugeta “executed an Unlimited Guaranty whereby they each individually agreed to be responsible for any attorney’s fees incurred or costs advanced by [Melehy] in connection with its representation of Vision [] in its Chapter 11 bankruptcy case.” (Compl. ¶ 11.) The Melehy Law Firm’s Representation of Vision LLC in the Bankruptcy Court : On January 9, 2017, Suvita Melehy, a n attorney at the Melehy La w Firm, filed a Chapter 11 voluntary petition for bankrupt cy on behalf of Vision LLC. See Petition , In re Vision
Investment LLC , No. 17-bk-00012 (Bankr. D.D.C.) (“ Vision Bankr. ”). On February 3, 2017, Vision LLC (through Suvita Meleh y) filed an application with th e bankruptcy court to retain the Melehy Law Firm, specifically Suvi ta Melehy, to represent it in its bankruptcy proceedings. See3 Application, Vision Bankr. , ECF No. 26. On February 24, 2017, t he bankruptcy court appro ved the employment of the Melehy LawFirm and Suvita Melehy to repr esent Vision LLC in bankruptcy, with an effective date of January 9, 2017. See Order, Vision Bankr. , ECF No. 28. On February 26, 2018, Suvita Melehy a nd the Melehy Law Firm, ci ting an inability to communicate with Haile, the man aging member of Vision LLC, file d a motion to withdraw as counsel for Vision LLC. See Motion, Vision Bankr. , ECF No. 108. On March 20, 2018, the bankruptcy court granted the motion. See Order, Vision Bankr. , ECF No. 115. On April 20, 2018, the bankruptcy court converte d Vision LLC’s bankruptcy ca se from Chapter 11 to Chapter 7, designating Haile to act as the debtor. See Order, Vision Bankr. , ECF No. 121. For the entirety of the period the Melehy Law Firm represented Vision LLC in bankruptcy (from January 9, 2017 through March 19, 2018), it re ndered legal services and advanced costs totaling $ 121,061.58. (Compl. ¶¶ 12.) On April 18, 2017, while it was still acting as Vision LLC’s counsel, the Melehy Law Firm filed its “ first interim application for compensation of counsel for the de btor,” seeking to be paid forservices rendered and expenses incurred from Janua ry 9, 2017 through April 18, 2017. See Application, Vision Bankr. , ECF No. 43. On May 16, 2017, the bankruptcy cour t approved that applic ation, awarding Melehy $36,848.25 in attorneys’ fees and $2,596.12 in costs, for a to tal award of $39,444.37. See Order,
Vision Bankr ., ECF No. 47. On April 25, 2019, over a year after i ts representation of Visi on LLC had ended, the Melehy Law Firm filed a second appl ication for compensation wit h the bankruptcy court, seeking to recover its fees and c osts for the remainder of the period it had represented Vision LLC (from April 18, 20 17 through March 19, 2018). See Second Application, Vision Bankr ., ECF No. 210, at 2. The application indicated that the Melehy L aw Firm intended to “file its4 claim as an administrative priority claim” with the bankruptcy Trustee, but that it was “simultaneously filing its fee petition to obtain court approva l of the fees and costs which will be sought in [its] claim.” Id . The Trustee has filed an oppos ition to this ap plication and has also requested that the Melehy Law F irm be ordered to disgorge the c ompensation it was previously awarded. See Opposition and Request for Disgorgement, Vision Bankr ., ECF No. 212. The bankruptcy court has scheduled a combined hearing on the Melehy Law Firm’s second application for compensation and the Trustee’s request for disg orgement, which is currently set for September 17, 2019. See Minute Entry, Vision Bankr ., ECF No. 227. To date, the Melehy Law Firm has been paid a total of $39,479.3 7, 1 leaving, by its calculation, an outstandi ng debt of $81,617.21. (Compl. ¶ 13.) The Current Litigation : On November 5, 2018, the Melehy Law Firm filed a breach of cont ract action against Haile and Mulugeta (join tly referred to as “D efendants” in the complaint), seeking to recover from them the money it claims to be owed by Vision LLC for lega l services and costs for the period from April 18, 2017 through March 19, 2018. 2 The complaint alleges that Haile and Mulugeta are personally liable for Vision LLC’s breach of contr act “[b]y operation of the Unlimited Guaranty and the Retain er Agreement.” (Compl. ¶ 15; see also id. ¶ 18 (“The Retainer Agreement and the Unlimited Guaranty are written contr acts signed by [Haile and

1 For reasons that are not apparent from the record, this number is $35.00 more than the amount approved by the bankruptcy court wh en it granted the Melehy Law Firm’s first application for compensation.
2 These are the same fees and costs that are the subject of the Melehy Law Firms’s second application for compensation, whi ch was filed after the current litigation. The Melehy Law Firm did not inform this Court that it had filed its application for compensation in the bankruptcy court, and it does not appear tha t it informed the bankruptcy c ourt of this litigation. Accordingly, a copy of this Memorandum Opin ion and the accompanying Order gr anting the motion for default judgment will be provi ded to the bankruptcy court.5 Mulugeta] in their individual ca pacity. By signing the Retaine r Agreement and the Unlimited Guaranty[,] [Haile and Mulugeta] each agreed to be bound by the terms and conditions set forth therein and each assumed personal li ability for all debts incur red by Vision in connection with [the Melehy Law Firm’s] repres entation of Vision in its Chapter 11 bankruptcy [c]ase.”). The complaint further alleges that “Haile and Mulugeta have receive d notice of the amounts owed to [the Melehy Law Firm] since the commencement of Vision’s bankru ptcy case because [the Melehy Law Firm] has sent detailed invoices to them both at the ir home address on a periodic basis and made a demand for payment” ( id . ¶ 16); that the Melehy Law Firm “has attempted to contact [Haile and Mulugeta] to m ake payment arrangements by el ectronic mail and telephone for several months with no success” ( id .); that “[a]ll of the leg al services rendered by [the Melehy Law Firm] to Vision wer e reasonable and necessary” ( id . ¶ 19); that “[Haile and Mulugeta] were aware [the Mele hy Law Firm] was providing these services,” [from which they benefited “as the only two members of Vision” ( id .); that “[Haile and Mulugeta] breached the Retainer Agreement and the Personal Guaranty by failing to pay the debt owed by Vision to the [the Melehy Law Firm] after the [the Melehy Law Firm] made repe ated demand[s] upon both Haile and Mulugeta for payment due” ( id . ¶ 20); that “[Haile and Mul ugeta] refused and continue to refuse to pay the amount owe d Plaintiff and Plaintiff has su ffered damages as a result” ( id .); and that [p]ursuant to the terms of the Retainer Agreement and the Personal Guaranty [Haile and Mulugeta] are responsible for and liable to [the Melehy Law Firm] for the full amount of the unpaid debt, interest charges a t the contract rate of 18 percen t per annum and for [the Melehy Law Firm’s] attorney’s fees and c osts incurred in connection wi th collecting the debt.” ( Id . ¶ 21.) Based on these allegations, the Mel ehy Law Firm seeks an award of damages in the6 amount of the outstanding debt of $81,617.21, plus $8,001.90 in accrued interest, 3 $400.00 in court costs, post-judgment inte rest on the principal at 18% per annum, and attorneys’ fees. (Compl. ¶¶ 14, 21; id . at 1, 5 (Prayer for Relief).) Haile was personally served wit h a summons and a copy of the co mplaint on November 8, 2018. ( See Aff. of Service, Nov. 12, 2018, ECF No. 3.) Mulugeta was pers onally served on November 23, 2018. (Aff. of Service, Nov. 29, 2018, ECF No. 4. ) Haile’s answer or other response to the complaint w as due on November 29, 2018; Muluget a’s was due on December 14, 2018. ( See Affidavits of Service, ECF N os. 3-4.) To date, neither Haile nor Mulugeta has answered or otherwise r esponded to the complaint. On December 19, 2018, the Melehy La w Firm filed affidavits of default as to both Haile and Mulugeta, accompanied by the required military affidavits. ( See Affidavits, ECF Nos. 5-7.) Pursuant to Fed. R. Civ. P. 55(a) , the Clerk of Court entered d efaults against Haile and Mulugeta on January 2, 2019. ( See Clerk’s Entries of Default, ECF Nos. 8-9.) Copies of the entr ies of default were mailed by the Clerk to each defendant. On January 11, 2019, the Melehy Law Firm filed the pending mot ion for default judgment.
ANALYSIS Pursuant to Fed. R. Civ. P. 55(b), the Melehy Law Firm asks th e Court to enter a default judgment in its favor and again st defendants Haile and Mulugeta , jointly and severally, for the sum of $90,099.11 (the total of t he outstanding debt of $81,617 .21, accrued interest of $8,001.90,

3 Interest is only being sought f rom April 20, 2018 (the date th at Vision LLC’s Chapter 11 bankruptcy case was converted t o a Chapter 7 bankruptcy case) u ntil the date this lawsuit was filed. (Compl. ¶ 14.)7 and $480.00 in costs 4 ) plus post-judgment interest at the contract rate of 18% per a nnum from the date of any judgment until the entire amount is paid. ( See Proposed Default Judgment, ECF No. 11.) 5 The “entry of a default judgment is not automatic.” Mwani v. bin Laden , 417 F.3d 1, 6 (D.C. Cir. 2005). First, the proc edural posture of a default d oes not relieve a fed eral court of its “affirmative obligation” to determ ine whether it has subject-ma tter jurisdicti on over the action

. James Madison Ltd. v. Ludwig , 82 F.3d 1085, 1092 (D.C. Cir. 1996). Here, the Court has subject matter jurisdictio n pursuant to 28 U.S.C. § 1332(a)(1) because there is complete diversity of citizenship and the amount in controversy exceeds $75,000.00 . ( See Compl. ¶¶ 1-5.) Venue is proper in this district u nder 28 U.S.C. § 1391(b)(2) because the action arises in connection with legal services rendered i n a Chapter 11 bankruptcy case in the United States Bankruptcy Court for the District of Columbia. 6 Once satisfied as to its juris diction, the determination of wh ether default judgment is appropriate is committed to the discretion of the trial court. See Jackson v. Beech , 636 F.2d 831, 836 (D.C. Cir. 1980). Courts strongl y favor resolution of disp utes on their merits. Id . However,

4 The complaint only sought $400.00 in c osts, which was the fee for filing the complaint, but the motion for default judgment seeks $480.00 in costs, which cover s the filing fee and the fees for the service of the two summons.
5 There is a two-step procedure for requesting a default judgmen t. See Fanning v. Seneca One Realty LLC , 265 F. Supp. 3d 31, 33 (D.D.C. 2017) (citing Boland v. Cacper Constr. Corp. , 130 F. Supp. 3d 379, 382 (D.D.C. 2015)). First, Federal Rule of Ci vil Procedure 55(a) requires the Clerk of Court to enter default “[ w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or othe rwise defend, and that failur e is shown by affidavit or otherwise.” Fed. R. Civ. P. 55( a). Once the Clerk of Court ha s entered default, which has happened in this case, “the part y must apply to the court for a default judgment.” Fed. R. Civ. P. 55(b)(2).
6 28 U.S.C. § 1391(b)(2) pr ovides that “[a] civil action may be brought in . . . a judici al district in which a substantial part of the events or omissions giving rise to the claim occurred . . . .”8 default judgment is available “w hen the adversary process has b een halted because of an essentially unresponsive part y. . . . The diligent party must be protected lest he be faced with interminable delay and continued un certainty as to his rights.” Jackson v. Beech , 636 F.2d 831, 835-36 (D.C. Cir. 1980) (internal quotations omitted). Where, as here, there is a complete “absence of any request to set a side the default or suggestion by the defendant that it has a meritorious defense, it is clear that the standard for default judgment has been satisfied.” Int’l Painters and Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC , 531 F. Supp. 2d 56, 57 (D.D.C. 2008) (internal quotations omitted). Finally, while the ent ry of default establishes defendant's lia bility for the well-pleaded allegations of the complaint, Adkins v. Teseo , 180 F. Supp. 2d 15, 17 (D.D.C. 2001), it “does not . . . establish liability for the amount of damages claimed.” Boland v. Elite Terrazzo Flooring,
Inc ., 763 F. Supp. 2d 64, 67 (D.D.C. 2011). If necessary, a court may hold a hearing to “(A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) i nvestigate any ot her matter.” Fed. R. Civ. P. 55(b)(2). Here, though, no hearing is necessary as there are sufficient “detail ed affidavits [and] documentary evidence” to allow the Court to independently assess “the appro priate sum for the default judgment.” Flynn v. Mastro Masonry Contractors , 237 F. Supp. 2d 66, 69 (D.D.C. 2006) (citing United Artists Corp. v. Freeman , 605 F.2d 854, 857 (5th Cir. 1979)). The Melehy Law Firm’s motion i s supported by an affidavit from counsel of record, Omar Melehy; an affidavit from a certified public accountant, S andra Chiman; a bill of costs, and a signed copy of the Retainer Agreement. ( See Mot. for Default Judgment & Exs. A-D, ECF9 No. 10.) These documents adequatel y substantiate the amount of damages the Melehy Law Firm claims, including accrued inter est, costs, and entitlement to p ost-judgment interest at 18%. 7
CONCLUSION For the reasons set forth above, t he Court will grant the Meleh y Law Firm’s motion for default judgment and enter judgmen t in favor of the Melehy Law Firm and against Haile and Mulugeta in the amount of $90,099.11, with post-judgment intere st to accrue at the contract rate of 18% per annum from the date of this judgment until the entir e amount is paid. A separate Order and Default Judgment accompanies this Memorandum Opinion.

_______________________ ELLEN S. HUVELLE United States District Judge

Date: September 12, 2019

cc: Hon. S. Martin Teel, Jr. United States Bankruptcy Court fo r the District of Columbia 333 Constitution Avenu e, N.W., Room 2114 Washington, DC 20001

7 Although mentioned in the compl aint, plaintiff’s motion for de fault judgment does not seek an award of attorneys’ fees wit h respect to this litigation.