Hall et al v. Chiriac et al

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IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
§
DARREN HALL, 	§
MICHAEL HENNESSY, and
And MARK CARTWRIGHT.
§
§
Plaintiffs,
§
§
§
V. 	§ 	No. 3:24-cv-3273-K
§
THE TONE KNOWS, INC., 	§
TONE MULTI-MEDIA LLC, 	§
VLAD CHIRIAC, individually, and 	§
VALI CHIRIAC, individually, 	§
§
Defendants. 	§
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
Plaintiffs Darren Hall, Michael Hennessy, and Mark Cartwright have filed a
Motion for Default Judgment against Defendant The TONE Knows, Inc. (“TK”) and
Defendant TONE Multi-Media LLC (“TMM”) (collectively, “TONE” or “Tone”). See
Dkt. No. 52.
United States District Judge Ed Kinkeade has referred this motion to the
undersigned 	United 	States 	Magistrate 	Judge 	for 	hearing, 	if 	necessary, 	and
determination under 28 U.S.C. § 636(b). See Dkt. No. 53.
For the following reasons, the Court should deny Plaintiffs’ Motion [Dkt. No.
52].
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Background
This 	case 	concerns 	allegations 	of 	breach 	of 	contract, 	fraudulent
misrepresentation, 	negligent 	misrepresentation, 	securities 	fraud 	under 	Texas
Government Code § 4008.052, and parental negligence.
On the basis of diversity jurisdiction, Plaintiffs filed a complaint in this court
on December 31, 2024 against TONE; Defendant Vlad Chiriac, individually; and
Defendant Vali Chiriac, individually. See Dkt. No. 1. On January 16, 2025, they
amended their complaint. See Dkt. No. 10. And on March 11, 2025, they filed a Second
Amended Complaint. See Dkt. No. 33.
Plaintiffs allege that Vlad, who was 17 years old at the time, “with TONE’s
backing, 	solicited 	Plaintiffs 	while 	pretending 	to 	be 	an 	adult 	with 	enough
cryptocurrency expertise to create and bring a cryptocurrency coin [$TONE] to the
market.” Id. at 1. “Believing in Vlad’s and Tone’s vision, Plaintiffs invested $80,000.”
Id. Plaintiffs claim that, “six months after being solicited by Vlad and TONE, $TONE
coin does not exist,” and Vlad and TONE “refuse to return Plaintiffs’ investment.” Id.
at 2. And Plaintiffs allege that Vali “failed to prevent Vlad from holding himself out
falsely as an adult and cryptocurrency expert … [and] making other false material
representations with the intent that Plaintiffs would invest their money.” Id. at 11.
Plaintiffs’ 	claims 	against 	Vlad 	(securities 	fraud 	under 	Section 	4008.052,
fraudulent misrepresentation, negligent misrepresentation, and civil conspiracy to
commit fraud and securities fraud) and Vali (parental negligence), see generally id.,
were dismissed with prejudice on April 25, 2025, see Dkt. No. 49.
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Their remaining claims against TONE are for breach of contract (or, in the
alternative, quantum meruit), fraudulent misrepresentation, and securities fraud
under Section 4008.052. See Dkt. No. 10.
Summonses were issued as to all Defendants on January 2, 2025. See Dkt. No.
5. Plaintiffs properly served process on TK on January 7, 2025. See Dkt. No. 7.
On March 13, 2025, summonses were issued again as to TK and TMM. See Dkt.
No. 40. TK was properly served with Plaintiffs’ Amended Complaint and Second
Amended Complaint on March 14, 2025. See Dkt. No. 41.
The Court granted Plaintiffs leave to effectuate substituted service on TMM
through its registered agent, Ryan Carter. See Dkt. No. 45. The Court ordered
Plaintiffs to file proof of service within 3 days of serving TMM.
On April 8, 2025, Plaintiffs served TMM by posting a copy of the Amended
Complaint and Second Amended Complaint on the front door of Ryan Carter’s last
known abode. See Dkt. Nos. 46 & 47. They filed proof of service on April 16, 2025 – 6
business days after serving TMM.
Despite being properly served, TONE failed to file answers or otherwise appear
in this case. Plaintiffs then filed a request for entry of default against them. See Dkt
No. 50.
The Clerk of Court entered default as to TONE on May 5, 2025. See Dkt. No. 9.
Plaintiffs then filed this motion for default judgment against TONE. See Dkt.
No. 52. They seek damages of at least $500,000 for Cartwright; damages of at least
$100,000 to each of Hall and Hennessy; pre- and post-judgment interest at the highest
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permitted rates; attorneys’ fees and court costs; and all other and further relief to
which they may be entitled. See id. at 1-2.
Legal Standards
Federal Rule of Civil Procedure 55(b)(2) governs applications to the Court for
default judgment. See F ED. R. C IV. P. 55(b)(2). A plaintiff seeking a default judgment
must establish: (1) that the defendant has been served with the summons and
complaint and that default was entered for its failure to appear; (2) that the defendant
is neither a minor nor an incompetent person; (3) that the defendant is not in military
service or not otherwise subject to the Soldiers and Sailors Relief Act of 1940; and (4)
that, if the defendant has appeared in the action, the defendant was provided with
notice of the application for default judgment at least three days prior to the hearing.
See Arch Ins. Co. v. WM Masters & Assocs., Inc., No. 3:12-cv-2092-M, 2013 WL 145502,
at *2-*3 (N.D. Tex. Jan. 14, 2013). The plaintiff must also make a prima facie showing
there is “jurisdiction both over the subject matter and the parties.” Sys. Pipe & Supply,
Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001).
In the Fifth Circuit, three steps are required to obtain a default judgment: (1)
default by the defendant; (2) entry of default by the Clerk’s office; and (3) entry of a
default judgment by the district court. See New York Life Ins. Co. v. Brown, 84 F.3d
137, 141 (5th Cir. 1996). A default occurs when a defendant has failed to plead or
otherwise respond to the complaint within the time required by the Federal Rules of
Civil Procedure. See id. The clerk will enter default when default is established by an
affidavit or otherwise. See id. After the clerk’s entry of default, a plaintiff may apply
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to the district court for a judgment based on such default. See id.
The Fifth Circuit favors resolving cases on their merits and generally disfavors
default judgments. See Rogers v. Hartford Life & Accident Ins. Co., 167 F.3d 933, 936
(5th Cir. 1999); see also Sun Bank of Ocala v. Pelican Homestead & Sav. Ass’n, 874
F.2d 274, 276 (5th Cir. 1989) (“Default judgments are a drastic remedy, not favored
by the federal rules and resorted to by the courts only in extreme situations.”). But
this 	policy 	is 	“counterbalanced 	by 	considerations 	of 	social 	goals, 	justice, 	and
expediency, a weighing process [that] lies largely within the domain of the trial judge’s
discretion.” Rogers, 167 F.3d at 936 (quoting Pelican Prod. Corp. v. Marino, 893 F.2d
1143, 1146 (10th Cir. 1990) (internal quotations omitted)); see also Merrill Lynch
Mortg. Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990) (noting that default
judgments allow courts to manage their dockets “efficiently and effectively”).
Before entering a default judgment, a court should consider any relevant
factors. Those factors may include “(1) whether material issues of fact are at issue; (2)
whether there has been substantial prejudice; (3) whether grounds for default are
clearly established; (4) whether default was caused by good faith mistake or excusable
neglect; (5) harshness of default judgment; and (6) whether the court would feel
obligated to set aside a default on the defendant’s motion.” Arch, 2013 WL 145502, at
*3 (citing Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998)). The Court should
also consider whether the defendant has a meritorious defense to the complaint. See
id.
An entry of default “does not establish the amount of damages. After a default
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judgment, the plaintiff’s well-pleaded factual allegations are taken as true, except
regarding damages.” United States of Am. for Use of M-Co Constr., Inc. v. Shipco Gen.,
Inc., 814 F.2d 1011, 1014 (5th Cir. 1987) (cleaned up); cf. Jackson v. FIE Corp., 302
F.3d 515, 524-31 (5th Cir. 2002) (holding that jurisdictional allegations and findings
supporting a default judgment are not entitled to preclusive effect in the personal-
jurisdiction context of Federal Rule of Civil Procedure 60(b)(4)). A court may enter
default judgment against a party and determine damages without the benefit of an
evidentiary hearing “where the amount claimed is a liquidated sum or one capable of
mathematical calculation.” Leedo Cabinetry v. James Sales & Distrib., Inc., 157 F.3d
410, 414 (5th Cir. 1998) (cleaned up).
Analysis
I. 	The procedural requirements for default judgment have been met.
Plaintiffs have satisfied the prerequisites for entry of default judgment against
TONE.
“[A] plaintiff seeking default judgment on an amended complaint must first
demonstrate proper service of the operative complaint; a party may not avail itself of
the more relaxed standard under Rules 5(a)(1)(B) and 5(b) to effect proper service of
an amended complaint unless the defendant has appeared in the first instance.” U.S.
Bank Nat'l Ass'n v. Harris, No. 4:16-CV-00498-ALM-CAN, 2018 WL 4677809, at *1
(E.D. Tex. Mar. 14, 2018) (cleaned up).
Plaintiffs served TK with their Second Amended Complaint – the operative
complaint – on March 14, 2025 by personally serving its registered agent, Mr.
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Webster. See Dkt. No. 42.
And they served TMM with their Second Amended Complaint on April 8, 2025
by posting the summons on the front door of its registered agent, Mr. Carter, in
compliance with the Court’s order allowing substituted service [Dkt. No. 45]. See Dkt.
No. 47. Although Plaintiffs filed proof of substituted service with the Court 3 days
after the deadline, see Dkt. No. 45, the undersigned finds that Plaintiffs effectuated
“reasonably effective” service using methods that complied with the Court’s order.
T EX . R. CIV. P. 106(b).
The Clerk of Court entered default against TONE on May 5, 2025. See Dkt. No.
9.
TONE are not natural persons, and, so, cannot be minors, incompetent, or in
the military service.
And, so, Plaintiffs meet the procedural requirements for entry of default against
TONE.
II. 	The 	Court 	has 	subject 	matter 	jurisdiction 	but 	not 	personal
jurisdiction.
A. Subject Matter Jurisdiction
Plaintiffs have shown the Court has subject matter jurisdiction.
Under Section 1332, each plaintiff's citizenship must be diverse from each
defendant's citizenship, and the amount in controversy must exceed $75,000. See 28
U.S.C. § 1332(a), (b).
Plaintiffs allege that they are each citizens of Texas. See Dkt. No. 33 at 2. And
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they allege that Vlad and Vali are citizens of California. See id.
For diversity jurisdiction purposes, “a corporation shall be deemed to be a
citizen of every State and foreign state by which it has been incorporated and of the
State or foreign state where it has its principal place of business.” 28 U.S.C. §
1332(c)(1).
And the citizenship of a limited liability company (“LLC”) is determined by the
citizenship of each of its members. See SXSW v. Fed. Ins. Co., 83 F.4th 405, 407-08
(5th Cir. 2023).
Plaintiffs allege that TK is incorporated in Nevada and has its principal place
of business in Nevada. See Dkt. No. 33 at 2. And they allege that TMM is an LLC
whose sole member, Ryan Carter, is a citizen of California. See id.
And, so, Plaintiffs have alleged complete diversity among the parties.
As to the amount in controversy, the general rule is that each plaintiff invoking
diversity jurisdiction must allege damages that exceed $75,000. See Allen v. R & H Oil
& Gas Co., 63 F.3d 1326, 1330 (5th Cir. 1995).
Here, Cartwright alleges damages of at least $500,000, and Hall and Hennessy
each allege damages of at least $100,000. See Dkt. No. 33 at 13. Each plaintiff has
satisfied the required amount in controversy.
And, so, the Court has subject matter jurisdiction over this case.
B. Personal Jurisdiction
A judgment “without personal jurisdiction is void,” and a “district court has the
duty to ensure it has the power to enter a valid default judgment.” Sys. Pipe & Supply,
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242 F.3d at 324.
“[T]he Texas long-arm statute extends to the limits of federal due process.”
Bulkley & Associates, L.L.C. v. Dep’t of Indus. Relations, Div. of Occupational Safety
& Health of the State of California, 1 F.4th 346, 351 (5th Cir. 2021). Federal due
process requires that “the suit aris[es] out of or relate[s] to the defendant[s’] contacts
with” Texas. Daimler AG v. Bauman, 571 U.S. 117, 127 (2014).
Two 	types 	of 	personal 	jurisdiction 	may 	be 	exercised 	over 	a 	nonresident
defendant: general and specific.
“General jurisdiction ‘requires continuous and systematic forum contacts and
allows 	for 	jurisdiction 	over 	all 	claims 	against 	the 	defendant, 	no 	matter 	their
connection to the forum.’” Zoch v. Magna Seating (Germany) GmbH, 810 F. App'x 285,
288 (5th Cir. 2020) (quoting In re Depuy Orthopaedics, Inc., Pinnacle Hip Implant
Prod. Liab. Litig., 888 F.3d 753, 778 (5th Cir. 2018)).
In 	evaluating 	whether 	due 	process 	permits 	the 	exercise
of specific jurisdiction, [courts in this circuit] consider
(1) whether the defendant has minimum contacts with the forum
state, i.e., whether it purposely directed its activities toward the
forum 	state 	or 	purposefully 	availed 	itself 	of 	the 	privileges 	of
conducting activities there; (2) whether the plaintiff's cause of action
arises out of or results from the defendant's forum-related contacts;
and (3) whether the exercise of personal jurisdiction is fair and
reasonable.
If the plaintiff establishes the first two prongs, the burden shifts to the
defendant to make a “compelling case” that the assertion of jurisdiction
is not fair or reasonable.
Carmona v. Leo Ship Mgmt., Inc., 924 F.3d 190, 193 (5th Cir. 2019) (quoting Seiferth
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v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006); footnote omitted).
“For there to be minimum contacts, a defendant must have ‘purposefully availed
himself of the benefits and protections of the forum state’ ‘such that he should
reasonably anticipate being haled into court there.’” Id. (quoting Moncrief Oil Int'l
Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007), then Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474 (1985) (quoting, in turn, World-Wide Volkswagen Corp.
v. Woodson, 444 U.S. 286, 297 (1980))).
“In other words, for specific personal jurisdiction to exist over [a nonresident
defendant], there must be an affiliation between the forum and the underlying
controversy.” Conti 11. Container Schiffarts-GMBH & Co. KG M.S., MSC Flaminia v.
MSC Mediterranean Shipping Co. S.A., 91 F.4th 789, 794 (5th Cir. 2024) (cleaned up;
quoting Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. 351, 359 (2021)).
This “constitutional touchstone” “ensures that a defendant will not be haled into
a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the
unilateral activity of another party or a third person.” Burger King, 471 U.S. at 474,
475 (cleaned up).
“That is, the plaintiff cannot supply ‘the only link between the defendant and
the forum.’” Carmona, 924 F.3d at 924 (quoting Walden v. Fiore, 571 U.S. 277, 285
(2014)). “Rather, jurisdiction is proper only where the ‘defendant himself’ made
deliberate contact with the forum.” Id. (quoting Walden, 571 U.S. at 284 (quoting, in
turn, Burger King, 471 U.S. at 475)).
Specific jurisdiction is 	a 	“claim-specific 	inquiry,” 	so 	a 	plaintiff 	must
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establish specific jurisdiction for each claim asserted. Dontos v. Vendomation NZ Ltd.,
582 F. App'x 338, 343 (5th Cir. 2014) (quoting Seiferth, 472 F.3d at 274).
Plaintiffs do not allege any continuous and systematic contact with Texas by
TONE that would place TONE within the general jurisdiction of this Court.
They instead rely on an agency theory to establish specific jurisdiction over
TONE. See Alliantgroup, L.P. v. Feingold, CIV. A. H-09-0479, 2009 WL 2498551, at
*6 (S.D. Tex. Aug. 12, 2009) (citing cases holding that an agent's jurisdiction contacts
may be imputed to the principal).
“The actions of an agent may establish minimum contacts over a
principal.” McFadin v. Gerber, 587 F.3d 753, 761 (5th Cir. 2009). “As
such, a corporation can purposefully avail itself of a forum by directing
its agents or distributors to take action there.” Daimler AG, 571 U.S. at
135 n.13 (citing Asahi Metal Industry Co. v. Superior Court, 480 U.S.
102, 112 (1987)). Under Texas law, in order to prove agency, “evidence
must establish that the principal has both the right: (1) to assign the
agent's task; and (2) to control the means and details of the process by
which the agent will accomplish that task.” Indian Harbor Ins. Co. v.
Valley Forge Ins. Group, 535 F.3d 359, 364 (5th Cir. 2008). An agency
relationship 	must 	be 	affirmatively 	established 	and 	not
presumed. See Coffey v. Fort Wayne Pools, Inc., 24 F. Supp. 2d 671, 677
(N.D. Tex. 1998).
Horton v. SunPath, Ltd., No. 3:20-cv-1884-B-BH, 2021 WL 982344, at *4 (N.D. Tex.
Feb. 16, 2021), rec. adopted, 2021 WL 977065 (N.D. Tex. Mar. 15 2021); accord Rogers
v. Nat'l Car Cure, LLC, 636 F. Supp. 3d 762, 768 (S.D. Tex. 2022).
Plaintiffs allege that
TONE cloaked Vlad in indicia of authority [and] told Plaintiffs to deal
directly with him. In the course and scope of its business, [TONE] and
[their] officers adopted Vlad, a fraudulent actor, as their representative
and allowed him to act on their behalf. As their agent, Vlad made
fraudulent representations about his age, expertise, net worth, previous
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work, and the value of TONE’s cryptocurrency to convince Plaintiffs to
invest $80,000 in a cryptocurrency he knew was going to be worthless.
Because Vlad operated as their agent, [TONE] are also responsible for
Vlad’s actions in the scope of his work for TONE.
Dkt. No. 33 at 5.
They allege that Vlad told Hall “that he was seeking an investment in an initial
coin offering on behalf of TONE and that he could set up a call with Tom Webster,
[TK]’s CEO, and Ryan Carter, [TMM]’s CEO, to discuss the technology and confirm
Vlad’s credentials. Believing in his vision, Mr. Hall invested $20,000 and invited Mr.
Cartwright and Mr. Hennessy to speak with Vlad and Ryan Carter.” Id. at 3.
Plaintiffs also allege that Carter, the sole member of TMM, and Vlad “were on
a call with Mr. Hall and Mr. Cartwright and confirmed that what Vlad said was
correct. $TONE coin was being created by Vlad and would have [TK]’s and [TMM]’s
full 	backing. 	After 	this 	meeting, 	Mr. 	Cartwright 	invested 	$20,000 	of 	their
cryptocurrency assets….” Id.
And they allege that, “on a video call with Plaintiffs and Vlad, Mr. Webster,
CEO of [TK], confirmed that $TONE coin had been created, and made numerous
representations about the value of $TONE coin, the significant number [of] potential
investors who were coming on board … and reaffirmed the uses of the coin within
TONE’s 	existing 	systems 	and 	infrastructure. 	Both 	TONE 	and 	Vlad 	made
representations that the value of $TONE coin within the next few months would be
worth in excess of $2 million. Based on this meeting, Mr. Cartwright invested another
$20,000 worth of his cryptocurrency holdings, and Mr. Hennessy invested $20,000
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worth of his cryptocurrency holdings….” Id. at 3-4.
Based on the facts in the Second Amended Complaint, the undersigned finds
that TONE has an agency relationship with Carter, Webster, and Vlad. All three
Plaintiffs invested in $TONE coin after Carter, Webster, and Vlad made claims about
its value. See Johnson v. Palmer Admin. Servs., Inc., No. 6:22-cv-00121-JCB-KNM,
2022 WL 17546957, at *5 (E.D. Tex. Oct. 20, 2022) (finding that plaintiff’s allegation
that “he purchased a vehicle warranty from [the defendant] as the result of a call
received from either [the defendant] or from a third party at [the defendant's]
direction” was sufficient for the purpose of a prima facie case “to allow the Court to
infer that implied actual authority exists between Palmer, the purported principal,
and Vehicle Services, the purported agent.” (citing Horton v. Palmer Admin. Servs.,
Inc., No. 3:20-cv-3526-X-BN, 2021 WL 8014654, at *6 (N.D. Tex. June 8, 2021)), rec.
adopted, 2022 WL 16919786 (E.D. Tex. Nov. 14, 2022))).
But, notwithstanding the principal-agent relationship between TONE and
Carter, Webster, and Vlad, the undersigned finds that the Court cannot exercise
personal jurisdiction over TONE.
“For causes of action which sound in contract, including breach of contract
and quantum meruit, ‘only those acts which relate to the formation of the contract and
the subsequent breach are relevant’ to the minimum contacts test.” Rhodes v. Bank of
Am., N.A., No. EP-20-cv-281-KC, 2021 WL 3549160, at *2 (W.D. Tex. Feb. 10, 2021)
(quoting Trois v. Apple Tree Auction Ctr., Inc., 882 F.3d 485, 489 (5th Cir. 2018))
(cleaned up).
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The complaint alleges that “[e]ach Plaintiff entered into a written Investor
Agreement” to receive $TONE coin. Dkt. No. 33. But Plaintiffs do not specify in which
state the contract was executed or breached. They do not even allege that Plaintiffs
were in Texas when any of their communications with TONE occurred.
Without an allegation that some part of the contract’s formation or breach
occurred in Texas, the undersigned cannot find that the Court may assert jurisdiction
over TONE for the contract claims. See Trois, 882 F.3d at 489 (“The only alleged Texas
contacts related to contract formation or breach are Schnaidt's conference calls
negotiating the agreement while Trois was in Texas. But, standing alone, that is
insufficient purposeful availment to establish jurisdiction over this breach-of-contract
claim.” (citing McFadin, 587 F.3d at 760; Holt Oil & Gas Corp. v. Harvey, 801 F.2d
773, 778 (5th Cir. 1986))).
As to the fraud claims, “the minimum-contacts test for personal jurisdiction in
[tort] differs from that in contract. ‘A forum State's exercise of jurisdiction over an out-
of-state intentional tortfeasor must be based on intentional conduct by the defendant
that creates the necessary contacts with the forum.’ ‘The proper focus of the minimum
contacts inquiry in intentional-tort cases is the relationship among the defendant, the
forum, and the litigation.’” Id. at 490 (quoting Walden, 571 U.S. at 286) (cleaned up).
“In cases alleging the intentional tort of fraud, the defendant's participation in
a single telephone call is enough to establish personal jurisdiction if the content of
the call gave rise to the fraud claim.” FCA Invs. Co. v. Baycorp Holdings, Ltd., No. 01-
20717, 2002 WL 31049442, at *2 (5th Cir. Aug. 29, 2002).
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Plaintiffs’ fraudulent misrepresentation and securities fraud claims against
TONE arise out of the calls between TONE’s agents and Plaintiffs, who are citizens of
Texas.
But Plaintiffs do not allege any connection between TONE and Texas other than
Plaintiffs’ Texas residence. For instance, they do not allege that any party was present
in Texas when the calls and meetings between them and TONE occurred. See Gem
Sw. LLC v. Topy Enters., Ltd., No. 3:24-cv-1899-D, 2024 WL 4448683, at *5 (N.D. Tex.
Oct. 8, 2024) (“Gem's allegations are insufficient to make a prima facie showing that
Topy Enterprises had sufficient tort-related contacts with Texas to support specific
jurisdiction. Gem alleges that Topy Enterprises made fraudulent misrepresentations
to induce Gem, a Texas company, to enter into a contract with it. But Gem alleges no
facts that connect Topy Enterprises' alleged tortious acts to Texas beyond their being
directed at a Texas resident. Gem does not allege, for example, that the fraudulent
misrepresentations were sent to, or received, in Texas.”) (collecting cases).
Because Plaintiffs do not allege that TONE “directed” any communications “to
Texas” or to Plaintiffs “in Texas,” the undersigned finds that the Court lacks
jurisdiction over TONE. Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 212 (5th Cir.
1999).
And, so, the undersigned finds that Plaintiffs have not made a prima facie
showing of the personal jurisdiction over TONE as to Plaintiffs’ breach of contract,
quantum meruit, fraudulent representation, and securities fraud claims.
Because the Court lacks jurisdiction to enter a default judgment against TONE,
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the undersigned need not address the merits of Plaintiffs’ claims.
Recommendation
The Court should deny Plaintiffs’ Motion for Default Judgment [Dkt. No. 52]
and dismiss their claims against TONE without prejudice for lack of personal
jurisdiction.
A copy of these findings, conclusions, and recommendation shall be served on
all parties in the manner provided by law. Any party who objects to any part of these
findings, conclusions, and recommendation must file specific written objections within
14 days after being served with a copy. See 28 U.S.C. ' 636(b)(1); F ED. R. CIV. P. 72(b).
In 	order 	to 	be 	specific, 	an 	objection 	must 	identify 	the 	specific 	finding 	or
recommendation to which objection is made, state the basis for the objection, and
specify the place in the magistrate judge=s findings, conclusions, and recommendation
where the disputed determination is found. An objection that merely incorporates by
reference or refers to the briefing before the magistrate judge is not specific. Failure
to file specific written objections will bar the aggrieved party from appealing the
factual findings and legal conclusions of the magistrate judge that are accepted or
adopted by the district court, except upon grounds of plain error. See Douglass v.
United Services Auto. Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996).
DATED: December 3, 2025
______________________________________________________________________________________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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