Insured Advocacy Group, LLC v. Tarp Solutions, LLC

Background

Insured Advocacy Group, LLC brought claims against Tarp Solutions, LLC and Christian Santana for breach of contract and conversion. On February 26, 2025, Judge Paul A. Engelmayer granted Insured Advocacy Group’s motion for default judgment against Tarp Solutions and Santana. A default judgment is a judgment entered after a defendant fails to defend the case. Judge Engelmayer then referred the matter to Magistrate Judge Robyn F. Tarnofsky to determine the appropriate damages.

Insured Advocacy Group submitted proposed factual findings, an affidavit from Wilfredo Navarro about amounts owed, and an affirmation from Maurice J. Baumgarten concerning interest, attorneys’ fees, and costs. The company claimed that Tarp owed $152,949.86, excluding interest, costs, and attorneys’ fees.

Problems with the Damages Evidence

Judge Tarnofsky concluded that the submissions did not establish the damages amount with reasonable certainty. The documents identified a total purchase price of $118,782.01 for thirteen accounts, but listed total cash paid to Tarp as $118,692.01. Two bank statements were almost entirely redacted, and the one statement showing a payment reflected only $40,533.01, less than the purchase price for the corresponding accounts.

The submissions also did not define “Adjusted Portfolio Receivable” or show the formula used to calculate the claimed 20 percent factor fee. Insured Advocacy Group requested interest at 7.75 percent under Texas law but did not identify the specific Texas-law provisions supporting that rate. Finally, the billing statements submitted in support of $14,650 in attorneys’ fees totaled less than the amount requested.

Order

The court ordered Insured Advocacy Group to make a supplemental submission by July 7, 2025. The submission must explain why the purchase price differed from the cash sent to Tarp, identify any additional payment evidence, provide the factor-fee formula and its components, identify the Texas-law provisions supporting the requested interest rate, and provide any additional billing statements supporting the requested attorneys’ fees. The explanations were to be supported by an affidavit from a person with knowledge of the underlying facts.

Insured Advocacy Group also had to serve the supplemental submission and the order on Tarp Solutions and Santana by July 8, 2025, and file proof of service by that date. The defaulting defendants could submit responses within one week after service. Judge Robyn F. Tarnofsky did not determine the amount of damages in this order; she directed Insured Advocacy Group to supplement its evidence.