A United States court has ruled against controversial US-based Nigerian lawyer, Emeka Ugwuonye, in a civil case filed by the Embassy of Nigeria in Washington, DC. The embassy’s lawsuit sought the recovery of a tax refund of $1.55 million it claimed Mr. Ugwuonye stole from real estate transactions he handled for the embassy.
A United States court has ruled against controversial US-based Nigerian lawyer, Emeka Ugwuonye, in a civil case filed by the Embassy of Nigeria in Washington, DC. The embassy’s lawsuit sought the recovery of a tax refund of $1.55 million it claimed Mr. Ugwuonye stole from real estate transactions he handled for the embassy.
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In a default judgement rendered Tuesday, April 23, 2013, Judge Barbara J. Rothstein stated that the judgment against Mr. Ugwuonye’s law firm, ECU Associates, was appropriate because the firm had not responded to court orders to provide an attorney to separately defend the case against it.
SaharaReporters also learned that Mr. Ugwuonye failed to appear at the offices of the law firm retained by the embassy to honor a scheduled deposition. The lawyers for the embassy had written to notify the court that Mr. Ugwuonye did not show up at the deposition despite the fact that he was fully informed about it through court-approved modes of communication.
SaharaReporters learnt that the embassy’s attorneys were seeking, among other things, to find out how Mr. Ugwuonye disbursed the tax refund he received on behalf of the embassy – but which he confiscated.
Mr. Ugwuonye had claimed repeatedly that he was entitled to the tax refund because the Nigerian authorities were “owing” him fees for prior “legal services” he had provided for the government of Nigeria. Nigerian officials in Abuja, including former Attorney General Michael Aondoakaa, maintained that the government did not owe any outstanding fees to Mr. Ugwuonye.
Mr. Ugwuonye failed to substantiate the claim of being owed even when the trial judge gave him an opportunity to authenticate that claim. He simply provided no credible proof.
In addition to Mr. Ugwuonye, former US deputy attorney general
, Bruce Fein, who reportedly took part in sharing the tax refunds that were illegally diverted by Mr. Ugwuonye, faces civil charges related to the funds.
Earlier yesterday, the court also ordered Mr. Fein to answer all interrogatories satisfactorily by tomorrow. It also instructed him to attend a mandatory phone conference with the judge at 1:00 p.m. New York time.
For a couple of years, the Maryland-based Ugwuonye blatantly used a series of lawsuits to harass and intimidate SaharaReporters and other Nigerians for exposing or questioning the tax refund fraud. He sued Saharareporters and its publisher for libel and slander before a US District Court. The case was dismissed late December, 2012 ruling, with Judge Messitte ruling that that Saharareporters had reported accurately and credibly on Mr. Ugwuonye’s dealings.
Mr. Ugwuonye appealed Judge Messitte’s ruling, but suffered another legal defeat when the appellate court dismissed his appeal owing to his failure to meet court orders to file grounds for his appeal. His appeal was tossed out on April 11, this year.
Mr. Ugwuonye, who has had a checkered professional career, also faces investigations by the State of Maryland Attorney Grievances Commission regarding the tax refund. The Nigerian embassy has filed a complaint seeking his disbarment for embezzling funds he collected on behalf of the embassy. In Lagos, Mr. Ugwuonye faces a separate trial in which he is accused of stealing $94,000 belonging to a Nigerian client, Sola Adeeyo. Mr. Adeeyo has complained to the Economic and Financial Crimes Commission (EFCC) that Mr. Ugwuonye defrauded him of the funds after representing him to recover the funds from an American bank.
In Abuja, Mr. Ugwuonye is also two facing criminal charges filed by the EFCC for breach of trust and failure to disclose his assets. The charges are linked to the attorney’s embezzlement of tax refunds collected on behalf of the Nigerian embassy in Washington, DC.
See default judgement by Judge Barbara J Rothstein
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
EMBASSY OF THE FEDERAL REPUBLIC OF NIGERIA,
Plaintiff, v.
EPHRAIM EMEKA UGWUONYE, et al.,
Defendants.
Civil Action No. 10-cv-1929 (BJR)
ORDER ENTERING DEFAULT AGAINST ECU ASSOCIATES, P.C.
This matter is before the Court on a motion by Plaintiff, the Embassy of the Federal Republic of Nigeria (“the Embassy”), to enter a default against Defendant ECU Associates, P.C., for failure to defend in this action. See Pltf.’s Cross-Motion (Dkt. #77). In light of ECU Associates’ failure to obtain appropriate counsel and appear in this case, despite multiple opportunities to do so, the Embassy’s motion to enter default is granted.
I. LEGAL STANDARD
Obtaining a default judgment under Federal Rule of Civil Procedure 55 is a two-step process. First, a plaintiff must request that the Clerk of the Court enter a default against the party who has “failed to plead or otherwise defend” against an action. Fed. R. Civ. P. 55(a).1 Once default has been entered, the plaintiff may move for default judgment. Fed. R. Civ. P. 55(b).
While default establishes the defaulting party’s liability for the well-pleaded allegations of the complaint, it does not establish the amount of damage for which a defendant is liable. Flynn v. Old World Plaster, LLC, 741 F. Supp. 2d 268, 269-70 (D.D.C. 2010). Unless a
plaintiff’s claim can be made certain by computation, as evidenced by an affidavit showing the
1 While Rule 55(a) gives the Clerk authority to enter a default, it is not a limitation on the power of the court to do so. See Fisher v. Taylor, 1 F.R.D. 448 (D.C. Tenn. 1940); see also 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2682 (3d ed. 1998).
amount due, the plaintiff seeking a default judgment must apply to the Court. Fed. R. Civ. P.
55(b). If a default judgment is sought against a defendant who has appeared personally or by a representative, that defendant or its representative must be served with written notice of the application at least seven days before the hearing on damages. Fed. R. Civ. P. 55(b)(2). The Court may conduct hearings in order to determine damages, establish the truth of any allegation, or pursue any other matter that would assist in effectuating judgment.
II. DISCUSSION
A. Entry of default against ECU Associates, P.C. is appropriate
Despite numerous opportunities provided by the Court, ECU Associates has failed to obtain appropriate counsel and appear in this case. ECU Associates did not appear in this case following withdrawal of its original counsel on October 8, 2011, missing both hearings and Joint Status Reports ordered by this Court. Mem. Op. of Nov. 2, 2012 (Dkt. #96) at 12. The Court chose to defer the entry of default, however, to provide ECU Associates the opportunity to obtain counsel, after clarifying that ECU Associates was an entity capable of being sued, and that it could not appear pro se. Id. See Order (Dkt. #95) at 1; Mem. Op. at 12. On December 10, 2012, Defendant Ugwuonye entered an appearance on behalf of ECU Associates. See Dkt. #108. The Embassy filed a motion to disqualify Ugwuonye as counsel, which this Court granted on
February 22, 2013. See Dkt. #115. The Court ordered ECU Associates to obtain counsel by
March 8, 2013. Id. at 2. As indicated above, ECU Associates has not obtained counsel.
While modern courts “do not favor default judgments,” when a party is unresponsive and brings the adversary process to a halt, “the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights.” Flynn, 741 F. Supp. 2d at 270 (internal citations omitted). It would appear that ECU Associates has abandoned this case, and it
is unfair to the Embassy, as the diligent party, to prolong the process any further. Therefore, entry of default against ECU Associates is appropriate.
B. The Embassy must file a separate motion for default judgment
The Embassy filed its motion for default judgment jointly with its motion for default against ECU Associates. See Pltf.’s Cross-Mot. at 4. The Embassy requested “an award of damages and other relief, as set forth in the Prayer for Relief in the Embassy’s Amended Complaint,” or, alternatively, that a hearing be set to fix the precise amount of damages. Id. at
11. In addition to the tax refund at the center of this case, which amounts to $1.55 million, the Embassy’s Prayer for Relief requests pre- and post-judgment interest, punitive damages, and costs and reasonable attorneys’ fees. First Am. Cmplt. (Dkt. #33) at 23-24.
An entry of default establishes a defendant’s liability, as “[a] defaulting defendant is deemed to admit every well-pleaded allegation in the complaint.” Adkins v. Teseo, 180 F. Supp.
2d 15, 17 (D.D.C. 2001). However, “unless the amount of damages is certain, the court is required to make an independent determination of the sum to be awarded.” Id. A court may conduct a hearing, but is not required to do so if it ensures that there is a basis for the damages specified in the default judgment. Flynn, 741 F. Supp. 2d at 270 (quoting Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997)).
The Embassy’s motion for default judgment and Complaint do not provide sufficient information for the Court to determine an appropriate damages amount, or even whether a hearing would be appropriate. Therefore, the Court will provide the Embassy with the opportunity to file a renewed motion for default judgment, which should be accompanied by sufficient supporting documentation for the Court to determine a sum certain or, in the alternative, to provide the Court with sufficient materials to convene a hearing on the matter at a future date.
THEREFORE, it is, hereby,
ORDERED that the Clerk of Court enter a default against ECU Associates, P.C. It is further, hereby,
ORDERED that the Embassy shall file its motion for default judgment against ECU Associates, P.C., with supporting documentation, no later than May 7, 2013.
SO ORDERED.
April 23, 2013
BARBARA J. ROTHSTEIN
UNITED STATES DISTRICT JUDGE
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