Filed: Dec. 31, 2019
Latest Update: Dec. 31, 2019
Summary: RECOMMENDED DECISION ON MOTION FOR ENTRY OF DEFAULT JUDGMENT JOHN C. NIVISON , Magistrate Judge . When Defendant did not respond to Plaintiff's complaint in this matter, upon Plaintiff's request, the Court entered a default against Defendant on Plaintiff's complaint. (Order, ECF No. 8.) Plaintiff subsequently filed a Motion for Entry of Default Judgment. (Motion, ECF No. 10.) 1 Through the motion, Plaintiff asks the Court for the entry of a judgment in the amount of $505,354.84 in damages,
Summary: RECOMMENDED DECISION ON MOTION FOR ENTRY OF DEFAULT JUDGMENT JOHN C. NIVISON , Magistrate Judge . When Defendant did not respond to Plaintiff's complaint in this matter, upon Plaintiff's request, the Court entered a default against Defendant on Plaintiff's complaint. (Order, ECF No. 8.) Plaintiff subsequently filed a Motion for Entry of Default Judgment. (Motion, ECF No. 10.) 1 Through the motion, Plaintiff asks the Court for the entry of a judgment in the amount of $505,354.84 in damages, ..
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RECOMMENDED DECISION ON MOTION FOR ENTRY OF DEFAULT JUDGMENT
JOHN C. NIVISON, Magistrate Judge.
When Defendant did not respond to Plaintiff's complaint in this matter, upon Plaintiff's request, the Court entered a default against Defendant on Plaintiff's complaint. (Order, ECF No. 8.) Plaintiff subsequently filed a Motion for Entry of Default Judgment. (Motion, ECF No. 10.)1 Through the motion, Plaintiff asks the Court for the entry of a judgment in the amount of $505,354.84 in damages, charges and interest, an award of $57,576.50 in attorneys' fees, and an order directing Defendant to return vehicles it leased from Plaintiff.
Following a review of the record and after consideration of Plaintiff's motion, I recommend the Court grant the motion and enter judgment against Defendant.
FACTUAL BACKGROUND
With the entry of default against Defendant, Plaintiff's allegations against Defendant are "taken as true and ... considered established as a matter of law." Libertad v. Sanchez, 215 F.3d 206, 208 (1st Cir. 2000) (quoting Brockton Sav. Bank v. Peat, Marwick, Mitchell & Co., 771 F.2d 5, 13 (1st Cir. 1985)); see also In re Home Rests., Inc., 285 F.3d 111, 114 (1st Cir. 2002) (a party "who defaults is taken to have conceded the truth of the factual allegations in the complaint as establishing the grounds for liability ....").
Plaintiff and Defendant entered into a Master Equity Lease Agreement effective December 6, 2012 (the Agreement). (Complaint ¶ 6, ECF No. 1.)2 Under the Agreement, Defendant leased vehicles from Plaintiff. (Id. ¶ 7.) Defendant was obligated to pay rent for the vehicles. (Id. ¶ 9.) On or about April 23, 2019, Defendant's April rent check was returned for insufficient funds. (Id. ¶ 10.) Defendant failed to remedy the missed rent payment within ten days, as required by the Agreement, and thus defaulted under the terms of the Agreement. (Id. ¶¶11, 14.) Defendant has not paid rent on the vehicles since March 2019. (Declaration of Bryan Jurich ¶ 9, ECF No. 10-2.)
The Agreement provides that in the event of Defendant's default, Plaintiff is entitled to terminate the Agreement and demand the return of the vehicles. (Complaint ¶ 16.) On May 7, 2019, Plaintiff terminated the Agreement and demanded the return of the vehicles. (Id. ¶ 17.)3 Upon such demand, the terms of the Agreement required Defendant to return the vehicles to Plaintiff immediately. (Id. ¶ 16.) Defendant returned some of the leased vehicles to Plaintiff; seventeen vehicles remain unreturned. (Declaration of B. Jurich ¶ 8).
The Agreement provides Plaintiff with the following remedies upon default:
14. DEFAULT; REMEDIES: . . . Upon the occurrence of any Event of Default, Lessor, without notice to Lessee, will have the right to exercise concurrently or separately (and without any election of remedies being deemed made), the following remedies: (a) Lessor may demand and receive immediate possession of any or all of the Vehicles from Lessee, without releasing Lessee from its obligations under this Agreement; if Lessee fails to surrender possession of the Vehicles to Lessor on default (or termination or expiration of the Term), Lessor, Servicer, any other agent of Lessor and any of Lessor's independent contractors shall have the right to enter upon any premises where the Vehicles may be located and to remove and repossess the Vehicles; (b) Lessor may enforce performance by Lessee of its obligations under this Agreement; (c) Lessor may recover damages and expenses sustained by Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns by reason of Lessee's default including, to the extent permitted by applicable law, all costs and expenses, including court costs and reasonable attorneys' fees and expenses, incurred by Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns in attempting or effecting enforcement of Lessor's rights under this Agreement (whether or not litigation is commenced) and/or in connection with bankruptcy or solvency proceedings; (d) upon written notice to Lessee, Lessor may terminate Lessee's rights under this Agreement; (e) with respect to each Vehicle, Lessor may recover from Lessee all amounts owed by Lessee under Sections 3(b) and 3(c) of this Agreement (and, if Lessor does not recover possession of a Vehicle, (i) the estimated wholesale value of such Vehicle for purposes of Section 3(c) shall be deemed to be $0.00 and (ii) the calculations described in the first two sentences of Section 3(c) shall be made without giving effect to clause (ii) in each such sentence); and/or (f) Lessor may exercise any other right or remedy which may be available to Lessor under the Uniform Commercial Code, any other applicable law or in equity. A termination of this Agreement shall occur only upon written notice by Lessor to Lessee. Any termination shall not affect Lessee's obligation to pay all amounts due for periods prior to the effective date of such termination of Lessee's obligation to pay any indemnities under this Agreement. All remedies of Lessor under this Agreement or at law or in equity are cumulative.
(Exhibit 1 to Complaint at 4-5, ECF No. 1-1.)
DISCUSSION
As noted above, upon entry of default, the defaulted party concedes the well-pleaded facts in the complaint. See Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir. 1992). Where, as here, the facts state an actionable claim, the defendant's liability is established at the time of default. See Hooper-Haas v. Ziegler Holdings, LLC, 690 F.3d 34, 41 (1st Cir. 2012); Brockton Sav. Bank v. Peat, Marwick, Mitchell & Co., 771 F.2d 5, 13 (1st Cir. 1985).4 A defendant's default, however, does not establish the amount of damages owed to the plaintiff for purposes of default judgment. Pursuant to Federal Rule of Civil Procedure 55(b)(2), a plaintiff seeking default judgment "must apply to the court" whenever the amount of damages claimed is not a "sum certain." "Unless a claim is for a `sum certain' a court must consider proof of damages before entering final judgment." CSXT Intermodal, Inc. v. Mercury Cartage, LLC, 271 F.R.D. 400, 401 (D. Me. 2010).
Federal Rule of Civil Procedure 55(b)(2) provides in relevant part that a "court may conduct hearings .... when, to enter or effectuate judgment, it needs to ... determine het amount of damages. Fed. R. Civ. P. 55(b)(2)(B). Plaintiff maintains the Court can enter default judgment without a hearing because the damages can be determined with certainty based on the current record.
In support of its claim for damages, Plaintiff submitted the sworn declaration of Bryan Jurich, an Assistant Vice President for Enterprise Fleet Management, who, with the assistance of other individuals employed by Plaintiff, calculated the rent and other amounts owed by Defendant. (Declaration of B. Jurich ¶ 4.) Referencing the applicable terms of the parties' agreement, Mr. Jurich asserts that Defendant owes $505,354.84 to Plaintiff in rental fees and interest on the arrears. (Id. ¶ 16.) The damages are itemized as follows: $120,382.38 in past due rent and fees (Id. ¶ 11 & ECF No. 10-3); $73,042.04 in additional rent (ECF No. 10-2 ¶ 12 & ECF No. 10-4);5 $5,539.49 in lease interest on the unreturned vehicles (ECF No. 10-2 ¶ 13 & ECF No. 10-4);6 service charges totaling $6,715.00 (ECF No. 10-2 ¶ 15 & ECF No. 10-4);7 $257,949.38 in other rent, described as the "Reduced Book Value" or "RBV," with respect to the unreturned vehicles (ECF No. 10-2 ¶ 14 & ECF No. 10-4);8 and $41,726.55 in per annum interest on the missed rental payments.9 Two supporting documents are attached to the declaration: an Accounts Receivable Summary (ECF No. 10-3) and a Payoff Values Summary (ECF No. 10-4).
The evidence submitted by Plaintiff provides a record from which the Court can reasonably determine, without a hearing, the amount of money damages recoverable by Plaintiff as the result of Defendant's breach of the Agreement. Given the entry of default, Plaintiff has established that Defendant has not made the rental payments as required by the Agreement and has not returned all the leased vehicles upon Plaintiff's request. Plaintiff, therefore, is entitled to recover the monetary amount due in the event Defendant defaults on its obligations under the Agreement. In his calculation of the amount due, Mr. Jurich cites the relevant provisions of the Agreement and given the default, his calculations are uncontroverted on the record. Mr. Jurich's calculations, therefore, represent the amounts Defendant owes Plaintiff as the result of Defendant's breach of the Agreement. Finally, the record establishes that Defendant has not returned seventeen of the leased vehicles as required by the Agreement. Plaintiff's request for the return of the vehicles is thus reasonable and supported by the record.10
CONCLUSION
Based on the foregoing analysis, I recommend the Court enter judgment in favor of Plaintiff in the amount of $505,354.84, together with interest and costs.11 I also recommend the Court order Defendant to return the leased vehicles that have not been returned to Plaintiff.
NOTICE
A party may file objections to those specified portions of a magistrate judge's report or proposed findings or recommended decisions entered pursuant to 28 U.S.C. § 636(b)(1)(B) for which de novo review by the district court is sought, together with a supporting memorandum, within fourteen (14) days of being served with a copy thereof. A responsive memorandum shall be filed within fourteen (14) days after the filing of the objection.
Failure to file a timely objection shall constitute a waiver of the right to de novo review by the district court and to appeal the district court's order.