JPMorgan Chase Bank, N.A. v. Surek et al

Filing 21

ORDER granting 13 Motion for Default Judgment against Defendant Katherine B. Surek in the amount of $314,912.83 ($295,584.19 for principal, $19,253.64 in accrued interest plus $75.00 in late charges/fees). Plaintiff also alleg es it is entitled to attorneys fees and costs. However, in its motion for default judgment, Plaintiff has not provided any support for such request. Plaintiff is ORDERED to file, on or before November 18, 2011, materials it deems necessary to suppor t its claim for costs and fees. The Court will take the matter under submission and a separate Judgment and Decree of Foreclosure, as to Defendant Katherine B. Surek, shall issue in conjunction with this Order after resolution of the request for attorneys fees and costs.. Signed by Judge Kristi K. DuBose on 11/3/2011. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JP MORGAN CHASE BANK, N.A.,
Plaintiff,
v.
KATHERINE B. SUREK, et al.,
Defendants.

)
)
) CIVIL ACTION NO. 11-00263-KD-M
)
)
)
ORDER

This matter is before the Court on Plaintiff=s motion for entry of default judgment. (Doc.
13). Plaintiff seeks entry of a default judgment against Defendant Katherine B. Surek on the
grounds that she has failed to plead, answer or otherwise defend in this case.
I.

Background
Plaintiff initiated this litigation on May 20, 2011 by filing a Complaint against

Defendants Katherine B. Surek and Christopher L. Surek for breach of contract (Count I), money
loaned (Count II) and judicial foreclosure (Count III). (Doc. 1). Specifically, Plaintiff alleges
that the Defendants defaulted on a loan made to them by Chase, in the original principal sum of
$310,000, as evidenced by Promissory Notes and secured by mortgages (as modified)
encumbering a 12.46-acre parcel of real property in Baldwin County, Alabama. (Id. at 1; Doc.
1-1; Doc. 1-2; Doc. 1-3; Doc. 1-4; Doc. 1-5; Doc. 1-6; Doc. 1-7; Doc. 1-8; Doc. 1-9). The
Promissory Note(s) provide that they are governed by federal law applicable to the lender and to
the extent not preempted by same, by the laws of the State of Louisiana. (Doc. 1-1 at 1; Doc.
1-6 at 1).
On July 14, 2011, Plaintiff filed an application to the clerk of court for entry of a default
against Defendant Katherine B. Surek. (Doc. 12). As grounds, Plaintiff asserted that even
though Defendant Katherine B. Surek was served, via certified mail, on May 26, 2011 (Doc.

12-1 (Aff. S.Robinson at 1) and Doc. 8), and more than twenty-one (21) days had elapsed since
service B said Defendant failed to answer or otherwise defend against Plaintiff=s complaint.
On July 20, 2011, the Clerk entered a default against Defendant Katherine B. Surek for
failure to plead or otherwise defend. (Doc. 15).
Also on July 14, 2011, Plaintiff simultaneously filed the present motion for entry of
default judgment (Doc. 13) requesting judgment against Defendant Katherine B. Surek, for entry
of a money judgment as demanded in Count I (“principal $295,584.19, accrued interest, default
interest, late fees, attorneys’ fees and costs, and all other charges and fees due”) (Doc. 1 at 6) and
Count II (“in the full amount of the indebtedness evidenced by the Note, calculated as of the date
of the entry of judgment, to include principal, accrued interest, default interest, late fees,
attorneys’ fees and costs, and all other charges and fees due to Chase[]”) (Doc. 1 at 7) of the
Complaint; and for an order authorizing foreclosure of the property at issue, as alleged in Count
III of the Complaint 1 Attached to the motion is the Affidavit of D’Ann D. Walker, a
Vice-President of JPMorgan Chase Bank, N.A. (Doc. 13-1). Plaintiff also relies upon the
Affidavit of Sandy G. Robinson, Plaintiff’s counsel, as previously filed in support of the
application for default. (Doc. 12-1).
On July 25, 2011, the Court ordered Defendant Katherine B. Surek to show cause by
August 8, 2011, as to why a default judgment should not be entered against her, and directed the
Clerk to provide a copy of the Order to Defendant Surek via certified mail. (Doc. 17). At that
time, Defendant Surek was further cautioned by the Court, that given her defaulted status and
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The Court notes that the Complaint seeks such an award and judgment against both of the
Sureks, “jointly and severally,” and not only against Defendant Katherine B. Surek. Plaintiff has not
initiated default proceedings against Defendant Christopher L. Surek.

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failure to appear in or defend against this action, absent an appearance in this case, she is not
entitled to receive any further notice or opportunity to be heard concerning Plaintiff=s ongoing
attempts to secure a default judgment against her. (Id.) The record reveals that she was served
with a copy of this Order, via certified mail, on August 10, 2011 (Doc. 18). To date, Katherine
B. Surek has failed to appear or otherwise respond to the Court’s show cause Order.
On September 12, 2011, Defendant Christopher L. Surek filed a Suggestion of
Bankruptcy and in light of same, on September 22, 2011, this Court entered a stay of all
proceedings against Christopher Surek. (Docs. 19, 20).2
II.

Discussion
Rule 55(b)(2) of the Federal Rules of Civil Procedure provides, in relevant part, as

follows with regard to entering a default judgment:
(b) Entering a Default Judgment.
***
(2) By the Court. In all other cases, the party must apply to the court for a default
judgment. A default judgment may be entered against a minor or incompetent
person only if represented by a general guardian, conservator, or other like
fiduciary who has appeared. If the party against whom a default judgment is
sought has appeared personally or by a representative, that party or its
representative must be served with written notice of the application at least 7 days
before the hearing. The court may conduct hearings or make referrals--preserving
any federal statutory right to a jury trial--when, to enter or effectuate judgment, it
needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.

2 Plaintiff represents that the bankruptcy filing of Christopher Surek has no impact on its request for default
judgment as to Katherine Surek because the property Plaintiff seeks to foreclose was the sole property of Katherine
Surek. (Doc. 19 at 2).

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FED.R.CIV.P. 55(b)(2).
Courts generally require some notice to be given to defendants between the time of
service of process and entry of a default judgment. See, e.g., Pennsylvania Nat=l Mut. Cas. Ins.
Co. v. Edmonds, Slip Copy, 2009 WL 1158988, *2, n.3 (S.D. Ala. Apr. 29, 2009); Capitol
Records v. Carmichael, 508 F. Supp. 2d 1079, 1083, n.1 (S.D. Ala. 2007). Additionally, the
Eleventh Circuit has held that although Aa default is not treated as an absolute confession by the
defendant of his liability and of the plaintiff's right to recover, a defaulted defendant is deemed to
admit the plaintiff's well-pleaded allegations of fact. The defendant, however, is not held to
admit facts that are not well-pleaded or to admit conclusions of law.@ Tyco Fire & Sec., LLC v.
Alcocer, 218 Fed. Appx. 860, 863 (11th Cir. 2007) (per curiam) (citations and internal quotations
omitted). Moreover, Abefore entering a default judgment for damages, the district court must
ensure that the well-pleaded allegations of the complaint . . . actually state a cause of action and
that there is a substantive, sufficient basis in the pleadings for the particular relief sought.@ Id.
(emphasis omitted). When assessing damages in connection with a default judgment, the Court
has Aan obligation to assure that there is a legitimate basis for any damage award it enters.@
Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2007).
At the outset, the Court is satisfied that Defendant Katherine B. Surek is on notice of the
default proceedings against her. (Doc. 18). As to the merits of Plaintiff’s default judgment, a
default has been entered against Defendant Katherine B. Surek and in favor of Plaintiff, for
Surek’s failure to plead, answer or otherwise defend this case. (Doc. 15). Additionally, based
on the Plaintiff’s allegations and the evidence of record, the Court is satisfied that the
well-pleaded allegations of the complaint state a cause of action against Defendant Katherine B.

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Surek and that there is a substantive, sufficient basis in the pleadings for the relief Plaintiff seeks.
Particularly given the evidence submitted by Plaintiff including exhibits attached to the original
Complaint (Doc. 1-1, 1-6, 1-8 (Promissory Notes), Doc. 1-2 through 1-5, 1-7, 1-9 (Mortgages
and modifications)), the Affidavit of D’Ann D. Walker (a Vice-President at JPMorgan Chase
Bank, N.A.) (Doc. 13-1) and the Affidavit of Sandy G. Robinson (Doc. 12-1, attached to the
application for default).
Specifically, the aforementioned evidence reveals that Katherine Surek has defaulted in
the payment of a mortgage loan made to her by Chase, in the original principal sum of
$310,000.00 as evidenced by a promissory note and secured by a mortgage (as such note and
mortgage were each extended, modified and renewed from time to time) encumbering an
approximate 12.46-acre parcel of real property situated in Baldwin County, Alabama.

On

August 17, 2007, the Sureks executed a promissory note in favor of Chase in the principal
amount of $310,000.00 to be repaid on or before September 5, 2008. The August 2007 Note
was secured by a mortgage granted by Katherine B. Surek in favor of Chase, encumbering real
property with an address of 7594 Dairy Road, Fairhope, Alabama 36532. Pursuant to a Change
in Terms Agreement dated October 5, 2007, executed by the Sureks, the terms of the August
2007 Note were modified to extend the maturity date of the Indebtedness evidenced by such note
to October 5, 2008. On October 5, 2007, a new mortgage was given by Katherine Surek in
favor of Chase, encumbering the Mortgaged Property to secure payment of the Indebtedness to
Chase as well as the performance of the Sureks’ obligations under the Related Documents,
including the August 2007 Note, as amended. On April 8, 2009, the Sureks executed a new
promissory note in favor of Chase in the principal amount of $310,000.00 in renewal and

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extension of the August 2007 Note, as theretofore modified and amended. Contemporaneously
with the execution of the April 2009 Note, Katherine Surek executed a Modification of
Mortgage in favor of Chase extending the maturity date to July 5, 2009. On September 17, 2009,
the Sureks executed a renewal promissory note in favor of Chase in the principal amount of
$308,985.00 to evidence the remaining, outstanding principal amount of the original
indebtedness. The Note provides for monthly payments of $3,361.75 for eleven months
beginning October 25, 2009, and a final payment of $288,885.18 due on the maturity date of
September 25, 2010. Contemporaneously with the execution of the Note on September 17,
2009, Katherine Surek executed a Modification of Mortgage in favor of Chase extending the
maturity date to September 25, 2010. The Sureks defaulted under the terms of the Promissory
Note(s) by failing to make payments thereunder as they became due, and by failing to satisfy the
indebtedness by the maturity date set forth in same.
As such, as to Plaintiff’s Complaint for breach of contract (count one), money loaned
(count two), and judicial foreclosure (count three), the Court finds as follows. The record
supports a finding that Katherine Surek has defaulted under the terms of the Promissory Note(s)
by failing to make payments as required and that Plaintiff is entitled to recover costs of
collection, such that Plaintiff’s claims against Katherine Surek are well-plead. The record also
reveals that Plaintiff has a valid and enforceable mortgage lien, which by its express terms, is
subject to being judicially foreclosed, and by virtue of same, Plaintiff is entitled to exercise its
contractual right to obtain a foreclosure of the mortgaged property. Moreover, the Court finds
that Plaintiff is owed $295,584.19 for the unpaid principal, $19,253.64 in accrued interest $75.00
in late charges/fees and which is provided for under the terms of the loan documents.

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Accordingly, it is ORDERED that Plaintiff’s motion for default judgment (Doc. 13, 19)
against Defendant Katherine B. Surek is GRANTED in the amount of $314,912.83
($295,584.19 for principal, $19,253.64 in accrued interest plus $75.00 in late charges/fees).
Plaintiff also alleges that it is entitled to an award of reasonable attorneys’ fees and costs
in the amount of $8,167.68 and $362.00, respectively. (Doc. 12-1 at 3 (Aff. Robinson)).
However, in its motion for default judgment, Plaintiff has not provided any support for such
request. As such, Plaintiff is ORDERED to file, on or before November 18, 2011, whatever
materials it deems necessary and appropriate to support its claim for costs and fees in
conjunction with the particular state’s law governing same (as provided for in the relevant loan
documents), after which time the Court will take the matter under submission.
A separate Judgment and Decree of Foreclosure, as to Defendant Katherine B. Surek,
shall issue in conjunction with this Order after resolution of the Plaintiff’s request for attorneys’
fees and costs.
DONE and ORDERED this the 3rd day of November 2011.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

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