The opinion of the court was delivered by: Honorable Ronald E. Bush U. S. Magistrate Judge
MEMORANDUM DECISION AND ORDER RE: PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST QUEST CAPITAL FINANCE (Docket No. 24)
PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST QUEST CAPITAL INVESTMENTS (Docket No. 25)
Now pending before the Court are Plaintiff's (1) Motion for Default Judgment Against Quest Capital Finance (Docket No. 24), and (2) Motion for Default Judgment Against Quest Capital Investments (Docket No. 25). Having carefully considered the record and otherwise being fully advised, the undersigned enters the following Memorandum Decision and Order:
1. In 2011, Pleasant Valley sought financing to be used for working capital. See Compl. at ¶ 7 (Docket No. 1). Pleasant Valley and Defendant Quest Capital Finance, Inc., d/b/a Quest Corporation, d/b/a Quest Capital Investments, Inc. (collectively "Quest") engaged in discussions regarding such financing. See id.
2. On September 2, 2011, Quest issued a Letter of Intent to Pleasant Valley, setting forth the details of a proposed financing package for $7,000,000.00. See id. at ¶ 8. The Letter of Intent required that, in order for the transaction to proceed, Quest had to provide Pleasant Valley with an acceptable final commitment letter and a mutually-agreed-upon escrow agreement; otherwise, the Letter of Intent could be cancelled and the parties would have no further obligations. See id. at ¶ 9.
3. As part of the loan transaction and in order to obtain a loan, Pleasant Valley was required to make a down payment of 4% of the loan -- $280,000.00 (the "Deposit"). See id. at ¶ 10. Accordingly, an escrow agent was needed to hold the Deposit to ensure that Quest fulfilled all obligations under the proposed loan transaction before receiving the Deposit. See id.
4. Pursuant to the Letter of Intent, Quest arranged for Defendant Sanchez-Medina (a Florida law firm) to serve as the escrow agent for this transaction. See id. at ¶ 11. Pleasant Valley, Quest, and Sanchez-Medina executed an escrow agreement, dated August 31, 2011. See id.*fn2
5. Pursuant to the parties' escrow agreement, Pleasant Valley agreed to transfer the Deposit to Sanchez-Medina within 48 hours after all the parties signed the escrow agreement. See id. at ¶ 12. Pleasant Valley forwarded the Deposit accordingly. See id.
6. Pursuant to the parties' escrow agreement, before Sanchez-Medina could disburse the Deposit to Quest, a number of conditions (the "preconditions") needed to be satisfied. See id. at ¶¶ 13 & 13(a)-(d). To this end, the escrow agreement also required Quest to issue a "written confirmation . . . that each of the [preconditions] . . . ha[s] been satisfied" (the "Commitment Letter"). See id. at ¶ 14. Sanchez-Medina was only authorized to release the Deposit to Quest once Sanchez-Medina received the Commitment Letter, signed by both Pleasant Valley and Quest. See id. at ¶ 15.
7. On September 13, 2011, Quest issued a purported Commitment Letter to Pleasant Valley. See id. at ¶ 16. The September 13, 2011 Commitment Letter was signed by Pleasant Valley and Quest, and a copy was provided to Sanchez-Medina. See id. The September 13, 2011 Commitment Letter, however, did not contain any of the preconditions and was not intended by Pleasant Valley to serve as an authorization to Sanchez-Medina to disburse the Deposit to Quest. See id. at ¶ 17 & 17(e)-(h). Indeed, as of September 13, 2011, none of the preconditions had been satisfied and, to date, remain unsatisfied. See id. at ¶ 18.
8. Without Pleasant Valley's knowledge or consent, and without receiving proper written confirmation that all of the preconditions were met, Sanchez-Medina disbursed the Deposit to Quest. See id. at ¶ 19. In releasing the deposit to Quest, Sanchez-Medina claims that they relied upon the September 13, 2011 Commitment Letter. See id. at ¶ 20.
9. Pursuant to the terms of the September 13, 2011 Commitment Letter, Quest was under an obligation to close on the loan no later than November 30, 2011. See id. at ¶¶ 21-22. Despite being in receipt of the Deposit, however, Quest failed to ...