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Supplier that ‘ghosted’ hotel ordered to pay nearly $300K

August 7, 2018

A lighting supplier that failed to deliver almost $100,000 worth of fixtures for a South Bend hotel renovation — then failed to respond to a resulting breach of contract lawsuit — has been ordered to pay treble damages and fees approaching $300,000.

New Jersey-based LED Solar Direct, LLC had a contract to furnish more than 800 light fixtures to be installed in the Aloft Hotel, renovated in South Bend’s tallest building, the former Chase Tower. LED Solar supplied less than 5 percent of the fixtures but kept the $94,991 that property manager Washington Square Development had paid, Northern District of Indiana Judge Philip P. Simon wrote in an order entered Thursday.

“LED Solar seems to have ghosted Washington Square and stopped responding to all communications and inquiries,” Simon in in Washington Square Development, LLC v. LED Solar Direct, LLC, 3:18-cv-124.

Simon’s damages award followed a default judgment for Washington Square after LED failed to respond to the suit claiming breach of contract, conversion and unjust enrichment. The judge granted Washington Square’s request for treble damages, awarding $284,973, plus attorney fees of $11,421. He ruled Washington Square had not proven its claim for more than $9,500 in consequential damages, however, relating to LED Solar’s failure to perform under the contract.

“(B)ased upon the allegations of duplicity and intentional misconduct in the complaint, LED Solar’s continued possession of Washington Square’s funds amounts to conversion under Indiana law because it has continued without Washington Square’s consent,” Simon wrote. This finding permitted an award of treble damages under Indiana's conversion statute, Indiana Code § 35-43-4-3.

Simon noted in entering judgment that LED refused to answer the suit despite sufficient notice, and that any delay in judgment would have prejudiced Washington Square, which paid nearly $100,000 for the undelivered fixtures more than a year ago.

“LED Solar is presumably well-aware of the amount of money at stake, as it has wrongfully taken that amount of money from Washington Square and thus it cannot be said that the effect of the judgment will be unnecessarily harsh,” he wrote.

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