Summary
The United States District Court for the Eastern District of Michigan granted Powers Paper, LLC’s motion for default judgment against Kooka USA, LLC, John Koussa, and Northstar Sourcing, LLC. The court found that substituted service was properly effectuated and that defendants failed to respond to the complaint. Judgment was granted on the breach of contract claims for unpaid invoices, with prejudgment and post-judgment interest, while the unjust enrichment and statutory conversion claims were denied.
Topics
Practice areas
Questions Presented
- Whether Defendants were properly served through the substituted-service methods authorized by the court.
- Whether default judgment was appropriate after Defendants failed to respond and the Clerk entered default.
- Whether the well-pleaded allegations established liability for breach of contract, unjust enrichment, and statutory conversion.
- Whether Plaintiff was entitled to damages and prejudgment and post-judgment interest.
Holdings
- Defendants were properly served because Plaintiff complied with the court's April 11, 2025 order authorizing substituted service.
- Default judgment was proper against Kooka USA, LLC, John Koussa, and Northstar Sourcing, LLC on Plaintiff's breach-of-contract claims.
- Plaintiff was entitled to a money award for the unpaid invoices and to prejudgment and post-judgment interest calculated from the date the Complaint was filed.
- Plaintiff was not entitled to default judgment on unjust enrichment because an express written contract governed the subject matter of the dispute.
- Plaintiff was not entitled to default judgment on statutory conversion because the consensual sale and delivery of goods did not constitute intentional dispossession under Michigan law.
Key quotations
“Once default is entered, Defendants are treated as having admitted to the complaint’s well-pleaded allegations.” (¶ 5)
“The Court must “conduct an inquiry” to “ascertain the amount of damages with reasonable certainty.”” (¶ 5)
“Because unjust enrichment is a quasi-contractual remedy, a plaintiff cannot recover for unjust enrichment when an express contract governs the subject matter of the litigation.” (¶ 7 n.1)
Factual background
Powers Paper entered into six purchase orders with Defendants between September and December 2023 to ship paper products to third-party companies on Defendants' behalf. Powers Paper shipped the products and sent seven invoices totaling $213,883.24, but Defendants did not pay. The third-party companies paid Defendants for the delivered products, and Defendants failed to appear or respond after being properly served.
Procedural history
Powers Paper initiated the action on March 21, 2024, seeking payment for seven unpaid invoices arising from six purchase orders. After multiple unsuccessful service attempts, the court authorized substituted service on April 11, 2025. Plaintiff represented that it complied with the authorized methods, and the Clerk entered default against Defendants on May 30, 2025. Following a hearing on October 15, 2025, the court granted Plaintiff's motion for default judgment in part.
Remand instructions
Plaintiff was directed to submit a proposed judgment reflecting the order within seven days. The court retained jurisdiction to resolve disputes concerning enforcement of the default judgment.