Magistrate judge recommends that ARC obtain default judgment against agency and owner

Airlines Reporting Corporation v. PVO Travel Corp. and Pete Victor Obuljen (E.D. Va. Sept. 27, 2007).  As previously reported, ARC filed a lawsuit against PVO and Obuljen, the agency’s sole owner, for unreported sales and dishonored drafts.  The defendants failed to respond to the complaint, so ARC moved for a default judgment.

The magistrate judge issued a report recommending entry of a default judgment for $296,947, the amount of damages ARC had demanded plus attorneys’ fees, against the defendants.  However, before issuing his recommendation, the magistrate judge engaged in a lengthy analysis as to whether the Virginia court had personal jurisdiction over the defendants, a California corporation and an individual residing in California.

The magistrate judge concluded that the court did have jurisdiction over the defendants under Virginia’s long-arm statute because they transacted business in Virginia by negotiating and entering into the Agent Reporting Agreement in Virginia, and because the ARA called for the defendants to perform certain obligations in Virginia.  The same court had engaged in a similar personal jurisdiction analysis, and had reached the same result, in Airlines Reporting Corporation v. Cisne Corp., Claudio Menicocci and Olga Menicocci (E.D. Va. Mar. 23, 2000).

Note:  On October 22, 2007, the court adopted the magistrate’s report and entered a default judgment against the defendants.

Airline obtains default judgment against leasing company and its CEO

PT (Persero) Merpati Nusantara Airlines v. Thirdstone Aircraft Leasing Group, Inc. and Alan Messner (D.D.C. July 9, 2007).  Merpati entered into an agreement to lease two Boeing 737 aircraft from Thirdstone.  In conjunction with that agreement, the airline wired a security deposit of $1 million to the attorney for Thirdstone, who then transferred the funds to Alan Messner, the company’s CEO.

The airline filed a lawsuit after the defendants failed to deliver the aircraft or return the deposit, alleging breach of contract and conversion causes of action.  When the defendants failed to respond to the complaint, the airline moved the court for, and was granted, a default judgment for $1 million plus postjudgment interest.

Update:  On September 24, 2007, Merpati filed a new lawsuit in the same court based on the same basic facts, but against Hume & Associates, P.C., Robert Hume and Jon C. Cooper.  According to the complaint, the defendants acted as legal counsel “for Thirdstone and/or Merpati” during the lease negotiations and wrongfully transferred Merpati’s security deposit to themselves and to Messner.

Airline gets default judgment vacated on appeal

Bird v. United Airlines, Inc. (N.J. App. Oct. 12, 2006).  The plaintiff had sued the airline for failure to honor certain companion passes.  The airline had requested that the trial be adjourned so that its counsel could appear.  Without notifying the airline, the court denied the adjournment request.  The court then entered a default judgment against the airline and later denied the airline’s motion to vacate the default judgment.

On appeal, the court reversed the trial court’s refusal to vacate the default judgment.  The appeals court reasoned that the airline had paid attention to the case by promptly requesting the adjournment and, later, by promptly moving to vacate the default judgment.  The court also noted that the airline appeared to have meritorious defenses and that cases should be decided “on the merits rather than by procedural snafu.”