Summit Habitats, Inc. et al v. Kaffka et al

Filing 20

ORDER denying without prejudice 19 Amended Motion for Default Judgment by Judge Christine M. Arguello on 12/30/11.(cmacd )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 11-cv-01413-CMA-BNB
SUMMIT HABITATS, INC., a Colorado corporation,
SANFORD M. TREAT III, and
KATHERINE TREAT,
Plaintiffs,
v.
GREGORY C. KAFFKA, and
KAREN S. KAFFKA,
Defendants.

ORDER DENYING AMENDED MOTION FOR DEFAULT JUDGMENT

This matter is before the Court on Plaintiffs’ Amended Motion for Entry of Default
Judgment Against Defendants Gregory C. Kaffka and Karen S. Kaffka, filed on
December 21, 2011.1 (Doc. # 19.) For the following reasons, the Court denies this
motion without prejudice.
The Clerk of the Court has already entered default against Defendants. (Doc.
# 15.) Upon the entry of default against a defendant, a plaintiff’s well-pleaded
allegations in the complaint are deemed admitted. See Olcott v. Delaware Flood Co.,

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Federal Rule of Civil Procedure 55(b)(1) provides that the Clerk of the Court may enter a
default judgment when “the plaintiff’s claim is for a sum certain or a sum that can be made
certain by computation.” However, for the Clerk to enter a default judgment, it must be “on the
plaintiff’s request.” Fed. R. Civ. P. 55(b)(1). As Plaintiff did not request for the Clerk to enter a
default judgment, the Court must determine whether default judgment is appropriate.

327 F.3d 1115, 1125 (10th Cir. 2003). However, default judgment cannot be entered
until the amount of damages has been ascertained. See Herzfeld v. Parker, 100 F.R.D.
770, 773 (D. Colo. 1984). One of the main reasons for this requirement is to prevent
plaintiffs who obtain default judgments from receiving more in damages than is
supported by actual proof. Id. at n.2.
On November 9, 2011, the Court denied a previous version of this motion
because the Court was “unable to ascertain whether Plaintiffs’ claim [was] for a sum
certain nor [was] it able to ascertain whether $1,790,892.15 is the correct amount of
damages that should be awarded.” (Doc. # 17 at 2.) The Court instructed Plaintiffs to
file “an amended motion [including] an affidavit or verification from Plaintiffs regarding
how the $1,790,892.15 in damages was calculated, including citation to the relevant
provisions in the settlement agreement.” (Id.) Plaintiffs complied with this directive only
in the barest sense and the Court finds Plaintiffs’ latest submission to again be woefully
deficient. The Court will catalogue the errors and deficiencies, and grant Plaintiffs one
more opportunity to provide a sufficient motion.
This case involves the Defendants’ breach of a settlement agreement. (Doc. #
1.) In a mild improvement over their first motion for default judgment, Plaintiff Katherine
Treat has submitted an affidavit that directs the Court to Exhibit F of the Settlement
Agreement, which is the settlement repayment schedule (the “Schedule”). (Doc. # 19-2
at 27-30.) However, Ms. Treat’s affidavit contains numerous clerical and/or

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mathematical errors, and fails to prove that Plaintiffs are entitled to the $1,790,892.15 in
claimed damages.
First, Ms. Treat attests that Defendants agreed to pay to Plaintiffs the principal
amount of $864,200. However, the Schedule indicates that Defendants were scheduled
to pay only $864,000. (Id. at 30.)
Second, Ms. Treat asserts that Defendants defaulted on July 28, 2010, and that
$581,951.70 was due at the time of default. That number is not found in the Schedule,
and as a result, the Court is unable to discern how much Defendants owed at the time
of default.2
Third, and perhaps most importantly, Ms. Treat attests that Defendants owe
$764,583.75 in interest from July 28, 2010 through the Settlement Agreement Payout
(May 28, 2023). In her affidavit, Ms. Treat refers to paragraph five of the Settlement
Agreement. That provision provides that “[i]n the event of a default, the maturity of the
Debt is accelerated and all sums due under the Debt shall at the time of the default
become due.” (Doc. # 19-2 at ¶ 5.) This indicates to the Court that the principal amount
would become due immediately upon default; however, it does not suggest that the
interest Plaintiffs would have received had Defendants paid the principal over thirteen
years would also be due upon default. Furthermore, even if Plaintiffs are entitled to the

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The Schedule shows that $584,951.70 was the principal owed as of June 28, 2010.
(Id. at 28.)
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interest, Ms. Treat’s affidavit does not explain how she calculated the amount to be
$764,583.75 and the Court is unable to verify this calculation on its own.
Fourth, the Settlement Agreement provides that in the event of default,
“liquidated damages of one-third of the amount remaining due on the Debt is to be
added to the judgment.” (Doc. # 19-2 at ¶ 8.) Plaintiff claims that $444,356.69 should
be awarded as liquidated damages. However, based on the $581,951.70 due on
default, the correct amount of liquidated damages would be $193,983.90 ( $581,951.70
in principal ÷ 3).
For the reasons stated above, it is ORDERED that Plaintiffs’ Motion for Entry of
Default Judgment (Doc. # 19) is DENIED WITHOUT PREJUDICE. Furthermore,
Plaintiffs are not entitled to unlimited attempts at filing a default judgment motion until
they satisfy the requirement that they prove what damages they are actually entitled to.
Thus, if Plaintiffs choose to file a third amended motion, that motion will be Plaintiff’s last
bite at the apple. Plaintiffs are advised that they should err on the side of caution in
ensuring that their calculation of damages is easily ascertainable. An affidavit or
verification from Plaintiffs’ counsel or an accountant (or both) might assist in this
endeavor.
DATED: December 30, 2011
BY THE COURT:
_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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