UNITED STATES DISTRICT COURT 

DISTRICT OF NEW JERSEY 

DAYS INNS WORLDWIDE, INC., a 

Delaware Corporation, 

 

 Plaintiff, 

 

 v. 

MIMAR INVESTMENT CO., a Virginia 

Corporation; JAMES M. KOKOLIS, an 

individual; and PAULA KOKOLIS, an 

individual, 

 Defendants. 

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: Civ. No. 11-3219 (WHW) 

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Walls, Senior District Judge 

 Plaintiff Days Inns Worldwide Inc. (“DIW”) moves for default judgment against 

defendants Mimar Investment Co. (“Mimar”), James M. Kokolis, and Paula Kokolis. Because 

the Court finds that default judgment is appropriate under Federal Rule of Civil Procedure 

55(b)(2), DIW’s motion is granted. 

FACTUAL AND PROCEDURAL BACKGROUND 

 DIW brings this suit based on a license agreement between DIW and Mimar dated July 2, 

2008 (“License Agreement”) for the operation of a 120-room guest lodging facility in 

Williamsburg, Virginia. Compl. ¶ 9, Ex. A. James M. Kokolis and Paula Kokolis are principals 

of Mimar who provided DIW with a guaranty of Mimar’s obligations under the License 

Agreement. Id. ¶¶ 3–4, 18–20, Ex. B. Under Sections 3 and 5 of the License Agreement, Mimar 

was obligated to operate and maintain the facility as a Days Inn until April 2023 in compliance 

with standards set by DIW. Id. ¶¶ 9–10, Ex. A. During this period, Mimar was required to make 

periodic payments to DIW under Section 7 and Schedule C for certain recurring fees, including 

royalties, system assessments, taxes, and interest. Id. ¶ 11, Ex. A. Under Section 9 of the License 

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Agreement, Mimar was not permitted to lease the facility or to transfer or assign its interest in 

any way without DIW’s prior written consent. Id. ¶ 15, Ex. A. Under Section 11 of the License 

Agreement, DIW reserved the right to terminate the license with notice to Mimar for certain 

specified reasons. Id. ¶ 16, Ex. A. Grounds for termination included where Mimar (a) 

discontinued operating the facility as a Days Inn and/or (b) lost possession or the right to 

possession of the facility. Id. Under Section 17.4, Mimar also agreed to pay all costs and 

expenses, including reasonable attorneys’ fees, that DIW incurred to enforce or collect amounts 

owed under the License Agreement. Id. ¶ 17, Ex. A. 

 On or about November 4, 2010, DIW alleges that Mimar breached its obligations under 

Sections 9 and 11 of the License Agreement by relinquishing control of the facility to a third 

party without DIW’s prior consent. Id. ¶ 21. DIW further alleges that Mimar thereby unilaterally 

terminated this agreement. Id. The Complaint does not allege that DIW sent written notice to 

Mimar that DIW intended to exercise a right to terminate the agreement under Section 11.2. 

On June 3, 2011, DIW filed the present suit alleging breach of contract and unjust 

enrichment. Id. ¶¶ 27–35. After none of the defendants appeared in this action or answered the 

Complaint, DIW requested an entry of default on October 31, 2011. Request for Entry of 

Default, ECF No. 11. The Clerk entered default against all three defendants on November 1, 

2011. On November 21, 2011, DIW moved for default judgment against all three defendants 

seeking damages in the amount of $115,516.13. Aff. of Suzanne Fenimore in Supp. of Mot. for 

Default J. (“Fenimore Aff.”) ¶ 20. This amount consists of (1) $108,355.77 for recurring fees 

owed under the License Agreement, including prejudgment interest, and (2) $7,160.36 for 

attorneys’ fees and costs. Id. ¶¶ 18–19. 

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STANDARD OF REVIEW 

 Federal Rule of Civil Procedure 55 governs the entry of default and default judgment. 

The power to grant default judgment “has generally been considered an inherent power, 

governed not by rule or statute but by the control necessarily vested in courts to manage their 

own affairs so as to achieve the orderly and expeditious disposition of cases.” Hritz v. Woma 

Corp., 732 F.2d 1178, 1181 (3d Cir. 1984) (quotation omitted). Because default judgment 

prevents a plaintiff’s claims from being decided on the merits, “this court does not favor entry of 

defaults or default judgments.” United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 

(3d Cir. 1984). Accordingly, the Third Circuit has clarified that, while “the entry of a default 

judgment is left primarily to the discretion of the district court,” this “discretion is not without 

limits.” Hritz, 732 F.2d at 1181. Cases should be “disposed of on the merits whenever 

practicable.” Id. See also $55,518,05 in U.S. Currency, 728 F.2d at 194–95. 

 In deciding a motion for default judgment, “the factual allegations in a complaint, other 

than those as to damages, are treated as conceded by the defendant.” DIRECTV, Inc. v. Pepe, 

431 F.3d 162, 165 (3d Cir. 2005). The court must, however, make “an independent inquiry into 

whether the unchallenged facts constitute a legitimate cause of action” and an “independent 

determination” regarding questions of law. Days Inn Worldwide, Inc. v. Mayu & Roshan, 

L.L.C., No. 06-1581, 2007 WL 1674485, at *4 (D.N.J. June 8, 2007) (citations omitted). The 

Third Circuit has explained that three factors control whether a default judgment should 

ultimately be granted: “(1) prejudice to the plaintiff if default is denied, (2) whether the 

defendant appears to have a litigable defense, and (3) whether defendant’s delay is due to 

culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). 

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DISCUSSION 

I. Jurisdiction 

Before entering a default judgment as to a party “that has not filed responsive pleadings, 

a district court has an affirmative duty to look into its jurisdiction both over the subject matter 

and the parties.” Ramada Worldwide Inc. v. Benton Harbor Hari Ohm, L.L.C., No. 05-cv-3452, 

2008 WL 2967067, at *9 (D.N.J. July 31, 2008). 

A. Subject Matter Jurisdiction 

Subject matter jurisdiction exists pursuant to 28 U.S.C. § 1332. DIW is a Delaware 

corporation, with its principal place of business in New Jersey. Compl. ¶ 1. Defendant Mimar is 

a Virginia corporation, with its principal place of business in Virginia. Id. ¶ 2. Defendants James 

M. Kokolis and Paula Kokolis are citizens of the state of Virginia. Id. ¶¶ 3–4. The amount in 

controversy in the matter, exclusive of interests and costs, exceeds the sum of $75,000. See id. ¶¶ 

30, 35, 39. 

B. Personal Jurisdiction 

This Court possesses personal jurisdiction over defendants Mimar, James M. Kokolis, 

and Paula Kokolis. Under Section 17.6.3 of the License Agreement, defendant Mimar consented 

and waived objection “to the non-exclusive personal jurisdiction and venue in . . . the United 

States District Court for the District of New Jersey.” Compl. ¶ 6, Ex. A. Defendants James M. 

Kokolis and Paula Kokolis, as guarantors, acknowledged that this provision also applied to the 

terms of the guaranty. Id. ¶ 7, Ex. B. DIW also complied with the requirements for proper service 

of process necessary to establish personal jurisdiction. Lampe v. Xouth, Inc., 952 F.2d 697, 700-

01 (3d Cir. 1991). Individual defendants James M. Kokolis and Paula Kokolis were personally 

served on July 4, 2011. Aff. of Service, ECF. No. 7. Mimar was served on July 4, 2011 under 

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Federal Rule of Civil Procedure 4(h) by personal service on James M. Kokolis, who was 

authorized to accept service on behalf of Mimar. Id. 

II. Liability 

Because a party seeking a default judgment is not entitled to such relief as a matter of 

right, the court may enter a default judgment “only if the plaintiff’s factual allegations establish 

the right to the requested relief.” Nautilus Ins. Co. v. Triple C. Const. Inc., No. 10-2164, 2011 

WL 42889, at *4 (D.N.J. Jan. 6, 2011). DIW brings claims against Mimar, James M. Kokolis, 

and Paula Kokolis for breach of contract seeking recurring fees owed under the License 

Agreement.1

 DIW also seeks to recover attorney fees and costs from the defendants. 

Pursuant to the choice of law clause in Section 17.6.1 of the License Agreement, New 

Jersey law governs the breach of contract claim. Compl. Ex. A. To establish liability for breach 

of contract, DIW bears the burden of showing that (1) the parties entered into a valid contract, 

(2) breach of the obligations under that contract, and (3) damages resulting from the breach. 

Murphy v. Implicito, 920 A.2d 678, 689 (N.J. Super. Ct. App. Div. 2007). DIW adequately 

alleges that Mimar breached the validly executed License Agreement by failing to pay DIW the 

recurring fees owed under Sections 7, 9, and 18.1 of the License Agreement and that DIW 

suffered damages as a result. Compl. ¶¶ 28–30; Fenimore Aff. ¶¶ 12–13, 15. The joint and 

several liability of James M. Kokolis and Paula Kokolis is established based on the terms of the 

separate guaranty under which these two individual defendants agreed to guaranty Mimar’s 

obligations under the License Agreement. Compl. ¶¶ 37–39, Ex. B. 

 

1

 Although the Complaint also asserts a claim to recover the recurring fees under a theory of unjust enrichment, 

Compl. ¶¶ 31–35, the Court need not consider the sufficiency of this claim because it finds that DIW has established 

liability for these fees under its related breach of contract claim. 

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III. Propriety of Entry of Default Judgment 

The Court has already established that DIW has properly asserted this Court’s jurisdiction 

over the case and the parties, the Clerk of the Court has entered default against the defendants, 

and DIW has established legitimate causes of action for breach of contract. The Court must next 

determine whether default judgment is appropriate by evaluating the prejudice to the plaintiff if 

default is denied, whether the defendant appears to have a litigable defense, and whether the 

failure to respond was due to culpable conduct. Chamberlain, 210 F.3d at 164. These factors 

support the issuance of a default judgment against the defendants. 

If a default judgment is not entered, the plaintiff DIW will be prejudiced because it will 

not be able to recover damages for its injuries due to the defendants’ continuing refusal to 

participate in this case. See Newman v. Axiom Worldwide, No. 06-cv-5564, 2010 WL 2265227, 

at *5 (D.N.J. June 2, 2010). Furthermore, the amounts owed on the recurring fees and the 

liquidated damages are subject to interest, causing additional harm to the plaintiff as recovery is 

delayed. See Howard Johnson Int’l., Inc. v. Patel, No. 11-cv-918, 2011 WL 2148575, at *4 

(D.N.J. May 31, 2011). 

Defendants Mimar, James M. Kokolis, and Paula Kokolis have not appeared or filed 

anything before this Court despite personal service on all three defendants in July 2011. The 

Court assumes that the defendants have no litigable defense available because they have not 

appeared to offer any defense and the facts asserted in the Complaint do not contain any 

information that could provide the basis for a meritorious defense. See Rose Containerline, Inc. 

v. Omega Shipping Co., No. 10-cv-4345, 2011 WL 1564637, at *3 (D.N.J. Apr. 25, 2011). The 

Court also presumes that the defendants acted culpably because they have failed to answer, 

move, or otherwise respond. See Stonebridge Bank v. Nita Props., LLC, No. 09-cv-5145, 2011 

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WL 380759, at *6 (D.N.J. Jan. 31, 2011). The Third Circuit has defined culpable conduct as 

conduct that is “taken willfully or in bad faith.” Chamberlain, 210 F.3d at 164. “Reckless 

disregard for repeated communications from plaintiffs and the court . . . can satisfy the culpable 

conduct standard.” Hritz v. Woma Corp., 732 F.2d 1178, 1183 (3d Cir. 1984). The defendants 

have disregarded all communications from DIW related to this lawsuit and the record does not 

suggest any good faith justification for the failure to respond. There is no evidence before the 

Court that the “failure to respond to plaintiff’s complaint was caused by anything other than 

defendants’own culpability and willful negligence.” Platypus Wear, Inc. v. Bad Boy Club, Inc., 

No. 08-cv-2662, 2009 WL 2147843, at *5 (D.N.J. July 15, 2009). 

IV. Damages 

The only allegations in a plaintiff’s complaint not treated as true upon the entry of a 

default judgment are those pertaining to the amount of damages. Comdyne I, Inc. v. Corbin, 908 

F.2d 1142, 1149 (3d Cir. 1990). Under Federal Rule of Civil Procedure 55(b)(2), a district court 

“may conduct such hearing or order such references as it deems necessary and proper” in order 

“to determine the amount of damages.” If the damages are for a “sum certain or for a sum which 

can by computation be made certain,” further evidentiary inquiry is not necessary. Fed. R. Civ. 

P. 55(b)(1); Comdyne I, 908 F.2d at 1149. 

DIW now requests default judgment awarding damages in the amount $115,516.13. 

Fenimore Aff. ¶¶ 18–20. DIW’s damages asserted under the breach of contract claim do not 

require further inquiry and will be awarded by the Court. The recurring fees due can be 

computed by formulas specified under the License Agreement. See Ramada Worldwide Inc. v. 

ERS Investments Inc., No. 07-cv-1095, 2008 WL 163640, at *6 (D.N.J. Jan. 16, 2008). The 

itemized statement submitted by DWI supports its claim for recurring fees of $108,355.77. 

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Fenimore Aff. ¶ 18, Ex. C. DIW also sufficiently establishes the costs and attorney’s fees. Under 

Section 17.4 of the License Agreement, Mimar agreed to pay all costs and expenses, including 

reasonable attorneys’ fees, that DIW incurred to enforce or collect amounts owed under the 

agreement. Id. ¶ 19, Ex. A. Attorneys’ fees clauses are enforceable under New Jersey law. See 

North Bergen Rex Transport, Inc. v. Trailer Leasing Co., 730 A.2d 843, 848 (N.J. 1999). Federal 

Rule of Civil Procedure 54 further provides that “costs – other than attorney’s fees – should be 

allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1). DIW’s request for $6,043.95 in 

attorneys’ fees and $1,116.41 in costs will be granted based on the supporting documentation 

submitted. Certification of Bryan P. Couch, Esq. in Supp. of Mot. for Default J. ¶¶ 11–13, Ex. B. 

CONCLUSION 

 Because the Court finds that default judgment is appropriate in this matter and DIW has 

adequately established a claim for liability and the amount of damages, DIW’s motion for default 

judgment as to defendants Mimar, James M. Kokolis, and Paula Kokolis is granted. 

March 19, 2012 

s/ William H. Walls 

United States Senior District Judge

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