United States District Court, E.D. Michigan, Northern Division
OPINION AND ORDER GRANTING MOTION FOR DEFAULT
L. LUDINGTON, United States District Judge
Hemlock Semiconductor Corporation filed this suit on July 14,
2015, alleging that Defendant Jinglong Industry and Commerce
Group Co., LTD, breached a contract for the purchase of solar
panel components. ECF No. 1. Traditional methods of service
were ineffectual, and, on June 26, 2017, the Court granted
leave for Hemlock to use alternative means of service. ECF
No. 15. Accordingly, Hemlock served Jinglong's domestic
counsel. No answer has been filed. On July 28, 2017, Hemlock
asked for and received the Clerk of Court's entry of
default. ECF Nos. 17, 18. Now, Hemlock has filed a motion for
default judgment. ECF No. 20.
well-pleaded factual allegations in the complaint will be
summarized. Compl., ECF No. 1. The Hemlock Semiconductor
Corporation is “a leading manufacturer of
polycrystalline silicon that is used, inter alia, in
the manufacturing of photovoltaic wafers, ingots, solar
cells, and solar modules.” Id. at 2 (emphasis
in original). Jinglong Industry and Commerce Group Co., LTD,
is “principally engaged in the manufacturing and
distribution of solar grade solar cell and semiconductor
device grade silicon products.” Id. The two
companies entered into two “Long Term Supply
Agreements” on July 3, 2006, and June 18, 2007.
Id. at 1. Pursuant to the Supply Agreements,
“Hemlock was obligated to manufacture solar grade
polycrystalline silicon that Jinglong was obligated to
Supply Agreements obligated Jinglong “to purchase
specified quantities of Product for a period of years,
pursuant to an annual schedule, at specific prices.”
Id. at 3. “Jinglong also agreed in Supply
Agreements II and III that it would ‘take or pay'
for the Product, such that Jinglong was ‘absolutely and
irrevocably required' to pay the full purchase price of
the Product scheduled for each year (the ‘Contract
Quantity of Product, ') regardless of whether Jinglong
opted to order or take delivery of the Product.”
alleges that it has “fully performed and complied with
all of its obligations under” the Supply Agreements.
Id. Despite that, Jinglong “did not order or
take delivery of the full Contract Quantity of Product”
for calendar years 2012, 2013, or 2014. Id. at 3-4.
Throughout 2013, 2014, and 2015, Hemlock sent Jinglong
notices of default and invoices requesting payment for the
product that Jinglong did not take. Jinglong never made any
of the requested payments.
Supply Agreements include a provision permitting Hemlock to
terminate the Supply Agreements if Jinglong failed to pay or
otherwise committed a material breach of the agreement and
the breach was not cured within 180 days. Id. at 5.
On March 31, 2015, Hemlock terminated the Supply Agreements
pursuant to that provision.
Hemlock brings claims against Jinglong for breach of contract
and account stated. In the complaint, Hemlock asserts that
Jinglong has failed to pay $448, 075, 008. Id. at 6.
Hemlock thus requests damages in that amount, plus $134, 024,
064 in interest that has accrued. Mot. Default at 8, ECF No.
judgment by default may be entered against a defendant who
has not pleaded or otherwise defended against an action.
Fed.R.Civ.P. 55(b). Before a default judgment may be enterd,
a party first must obtain a default. Fed.R.Civ.P. 55(a). Once
a default is entered, the defendants are considered to have
admitted the well pleaded allegations in the complaint,
including jurisdiction. Ford Motor Company v. Cross,
441 F.Supp.2d 837, 845 (E. D. Mich. 2006) (citing
Visioneering Construction v. U.S. Fidelity and
Guaranty, 661 F.2d 119, 124 (6th Cir. 1981)). Here,
Plaintiff properly obtained a default against Defendant, and
the clerk certified that a notice of default was served on
Defendants. ECF Nos. 17, 18, 19.
party secures the entry of default, the party may apply for a
default judgment. Fed.R.Civ.P. 55(b). In reviewing an
application for a default judgment, “[t]he court may
conduct hearings or make referrals … when, to enter or
effectuate judgment, it needs to: (A) conduct an accounting;
(B) determine the amount of damages; (C) establish the truth
of any allegation by evidence; or (D) investigate any other
matter.” Fed.R.Civ.P. 55(b)(2). While the well-pleaded
factual allegations in the complaint are taken as true when a
defendant is in default, damages are not. Ford Motor
Company, 441 F.Supp.2d at 848 (citing Thomson v.
Wooster, 114 U.S. 104 (1885)). The Court must determine
the propriety and amount of the default judgment where the
damages sought are not for a sum certain. See Fed.
R. Civ. P. 55(b). “Ordinarily, the District Court must
hold an evidentiary proceeding in which the defendant has the
opportunity to contest the amount [of damages].”
Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th
Cir. 1995) (internal quotation and citation omitted).
However, Rule 55 gives the court the discretion to determine
whether an evidentiary hearing is necessary, or whether to
rely on detailed affidavits or documentary evidence to
determine damages. Stephenson v. El Batrawi, 524
F.3d 907, 916 (8th Cir. 2008).
Court has previously found that materially identical Supply
Agreements were valid and enforceable. See, e.g,
Hemlock Semiconductor Corp. v. Glob. Sun Ltd., No.
13-11881, 2014 WL 3440119, at *1 (E.D. Mich. July 15, 2014)
(entering default judgment); Hemlock
Semiconductor Corp. v. Deutsche Solar GmbH, No.
13-CV-11037, 2016 WL 3743130, at *1 (E.D. Mich. July 13,
2016), aff'd sub nom. Hemlock Semiconductor
Operations, LLC v. SolarWorld Indus. Sachsen
GmbH, 867 F.3d 692 (6th Cir. 2017) (granting summary
judgment). The Supply Agreements provide for 12% annual
interest on “payment past due from the payment due date
to the date payment is received.” See, e.g.,
2006 Supp. Agr. at 2, Sec. 6, ECF No. 23, Ex. 1. Michigan
Compiled Law 600.6013(7), specifies that
if a judgment is rendered on a written instrument evidencing
indebtedness with a specified interest rate, interest is
calculated from the date of the filing of the complaint to
the date of satisfaction of the judgment at the rate
specified in the instrument if the rate was legal at the time
the instrument was executed. . . . ...