SHERI POLSTER CHAPPELL, District Judge.
This matter comes before the Court on the Plaintiff, PNC Bank's Motion for Default Final Judgment as to Defendant Orchid Group Investments, LLC. (Doc. #30) filed on April 15, 2013. The Defendant Orchid Group Investments, LLC did not file a response in opposition and the time to do so has expired.
The Plaintiff filed its Complaint on January 8, 2013, alleging that Orchid Group Investments (Orchid) defaulted on a loan given by PNC Bank as successor to RBC Bank. The Loan was secured by a piece of real property owned by Orchid and secured by a warranty deed on June 21, 2005. The subject property is located in Lee County, Florida. The Defendant Orchid entered into an agreement with Community Bank of Naples who loaned the Defendant the sum of $3,965,000.00. The Loan was secured by a promissory note (Note) for $3,965,000.00 given by Orchid. The Note on the Loan was set to mature on June 20, 2007, and the Defendant agreed to make consecutive monthly installments of interest beginning on July 20, 2005, up to the maturity date.
The Loan was renewed on August 20, 2007, for $3,965,000.00 with a maturity date of August 20, 2008. As with the prior loan, the Defendant agreed to make monthly interest payments on the loan until it matured in August of 2008.
In 2008, the Community Bank of Naples merged with RBC Bank. At that time, Orchid entered into a Change in Terms Agreement which increased the principal amount of the loan to $3,986,683.02. The maturity date on the Note was extended to December 11, 2009.
The personal Guarantors of the Loan executed and delivered a separate Commercial Guaranty dated December 12, 2008, to RBC bank. Pursuant to the 2008 Commercial Guaranty, each of the Guarantors guaranteed payment of the Loan which includes, but is not limited to principal and interest on the loan, collection costs and attorney's fees, and payment and performance of all of Orchid's obligations.
On January 26, 2009, Orchid and RBC Bank entered into a Change in Terms Agreement. The 2009 Change Agreement changed the principal amount to $3,980,780.55 and extended the maturity date to December 11, 2009. To secure the 2009 Note, as modified, RBC Bank and Orchid entered into a Mortgage Future Advances on January 26, 2009 on the property that was the subject of the original 2005 Loan. The 2009 Mortgage was recorded with the State of Florida on March 4, 2009.
On July 10, 2010, RBC Bank and Orchid entered in a Change in Terms Agreement, which extended the maturity date on the Loan to August 11, 2010. Again on January 14, 2011, the borrower executed and delivered to RBC Bank a Loan Agreement, renewing the Loan in the amount of $3,730,781.00. The 2011 Note, amended and renewed the 2007 Renewal Note. The 2011 Note executed on January 14, 2011, amended and restated the 2009 Mortgage and deleted the original property described in the 2005 Mortgage and replaced it with another parcel described in the Complaint. (Doc. # 1, ¶ 44). The Guarantors also entered into the 2011 Loan Agreement to guarantee the loan. The 2011 Note matured on January 31, 2013. Pursuant to the 2011 Note, Orchid agreed to pay interest installments until the 2013 maturity date when all outstanding payments on the 2011 Loan would be paid.
On March 2, 2012, RBC Bank merged into PNC Bank. PNC Bank then became the surviving entity and by virtue of the merger succeeded to all rights and obligations with respect to the 2011 Loan. Orchid failed to make a payment on August 1, 2012 and has not made a payment since that time. On September 20, 2012, the Plaintiff informed Orchid that it was in default and accelerated the Loan. To date, the Plaintiff states that Orchid has failed to make any payments or arrangements to pay the Loan.
On January 23, 2013, Orchid was served process with the instant Complaint. (Doc. # 8). Orchid failed to file an answer or otherwise respond to the Complaint and on March 11, 2013, the Court entered a Clerk's Default against Orchid. To date Orchid has still failed to file an answer or otherwise respond to the Complaint and the Plaintiff now moves for entry of a default judgment against Orchid.
The Plaintiff moves for a default judgment against Orchid, foreclosing any interest Orchid has in the security property and for breach of the Note in the amount of $4,442,393.43. The Plaintiff asks for a judgment in the amount of the Loan plus interest as well as for attorney's fees and costs.
A district court may enter a default judgment against a properly served defendant who fails to defend or otherwise appear pursuant to Federal Rule of Civil Procedure 55(b)(2).
A court may enter a default judgment only if the factual allegations of the complaint, which are assumed to be true, provide a sufficient legal basis for such entry.
In this instance, the Plaintiff has established that Orchid accepted the Loan from PNC Bank as successor to RBC and failed to repay the Loan as agreed. Under the terms of the 2011 Loan, Orchid was to make monthly installment payments on the Loan and completely pay the Loan off by January 31, 2013. Orchid stopped making the monthly payments on August 1, 2012, and has not made any payments since that time nor answered the allegations in the Complaint. Thus, the Complaint contains well pleaded allegations that Orchid borrowed $3,730,781.00 from PNC Bank and defaulted on the Loan and has, to date, failed to cure the default. Accepting the Plaintiff's allegations as true, the Court must respectfully recommend that a default judgment should be entered against the Defendant Orchid Group Investments, LLC.
The Plaintiff moves the Court to foreclose any interest Orchid may have in the mortgaged property as set forth in Count I of the Complaint and for breach of the Note in the amount of $4,442,393.43 for principal, interest and late fees as set forth in Counts I, II and III of the Complaint.
Although a defaulted defendant admits well-pleaded allegations of liability, allegations relating to the amount of damages are not admitted by virtue of default; rather, the Court determines the amount and character of damages to be awarded.
In this instance, the Plaintiff provided proof of the Loan amount and established that Orchid agreed to the amount and terms of the Loan. (Doc. # 1, Ex. 22). The Loan amount under the agreement at the date it was signed was $3,730,780.55. (Doc. # 1, Ex. 22, p. 11). The Mortgage agreement regarding the Loan to Orchid states "[t]he credit facility is in an aggregate principal amount up to $3,980,781.00 (Facility Amount) and is evidenced by a promissory note or promissory notes dated of even date herewith in the original aggregate principal amount up to the Facility Amount, from [Orchid] to Bank. . . ." (Doc. # 1, Ex 22, p. 11). The Plaintiff seeks interest on the outstanding Loan as well. The Plaintiff states the remaining principal, of $3,730,780.55, plus interest amounting to $499,924.57, and late fees of $194,729.56 totals $4,425,434.68, plus per diem interest at eighteen (18%) percent or $1,865.39.
Here, the Plaintiff has established the amount of the damages with essential mathematical calculable evidence from the Mortgage Agreement which was sworn, signed by Orchid and then subsequently filed with the State of Florida. Thus, it is respectfully recommended that the damages in the amount of $4,425,434.68 should be entered against the Defendant Orchid.
Further, as part of the 2011 Mortgage Agreement securing the Loan, Orchid agreed the Plaintiff could foreclose on the collateral and sell the collateral to aid in satisfying Orchid's obligations to pay the indebtedness specified in the Mortgage Agreement under the Loan. Specifically, the 2011 Mortgage Agreement states
(Doc. # 1 Ex. 22, Foreclosure Clause, pp.16-17). The Mortgage was signed and sworn to by Orchid agreeing that the Loan could be paid off by the foreclosure and sale of the collateral property defined by the Loan agreement and the 2011 Mortgage Agreement. The Mortgage was sworn, signed, and filed with the State of Florida demonstrating the amount of the Loan and that the property could be foreclosed and sold to cover Orchid's obligations on the Loan.
The Plaintiff has provided the Court with sufficient proof of the value of the Loan and of Orchids agreement that the subject property could be foreclosed upon and sold to pay off its obligations under the terms of the Loan. Therefore, it is respectfully recommended that the Plaintiff should be allowed to foreclose on the collateral property and sell, auction, or otherwise dispose of the collateral property in order to satisfy Orchid's obligation under the Loan.
The Plaintiff also asks for attorney's fees and costs for bringing the instant action. Plaintiff states that it has incurred $14,872.50 in attorney's fees and $2,086.25 in costs.
In evaluating Plaintiff's request for attorney's fees, the court uses the lodestar, which is the number of reasonable hours spent working on the case multiplied by a reasonable hourly rate.
"Ultimately, the computation of a fee award is necessarily an exercise of judgment, because `[t]here is no precise rule or formula for making these determinations.'"
In this instance, the Plaintiff did not provide the Court with sufficient information to make a determination regarding attorney's fees and costs. The hours are not separated out from hours spent prosecuting Orchid and hours expended on the other Defendants still remaining in this action. The Affidavit submitted by Plaintiff's Counsel, Carrie Ann Wozniak, only states that the attorney's fees are for hours spent representing the Plaintiff in this matter. (Doc. # 30, Ex. 2). There is not sufficient explanation of what the hours were expended on Orchid. The Plaintiff only supplies the Court with a statement as to what hours each attorney and staff member said they worked on this case without further explanation. As such, the Court cannot at this time make a determination regarding attorney's fees.
Similarly, the Plaintiff asks for $2,086.25 in costs, however, the costs are not detailed nor listed as to how the funds were expended. Twenty eight U.S.C. § 1920 reads in pertinent part:
While the Plaintiff is the prevailing party in this action and entitled to attorney's fees and costs, the information presented to the Court at this time is insufficient for the Court to make a determination regarding the amounts for attorney's fees and costs. Thus, it is respectfully recommended that the Court deny without prejudice the Motion for Attorney's Fees and Costs and grant leave to the Plaintiff to supply the Court with detailed records on what hours were spent prosecuting Orchid and a detailed accounting of how the cost funds were spent.
Accordingly, it is now
The Plaintiff, PNC Bank's Motion for Default Final Judgment as to Defendant Orchid Group Investments, LLC. (Doc. #30) should be
Failure to file written objections to the proposed findings and recommendations contained in this report within