Keybank National Association v. Northwest Professional Color, Inc.
Filing
16
ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT NORTHWEST PROFESSIONAL COLOR, INC. 10 , by Judge William J. Martinez on 4/13/2016.(dhans, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 15-cv-2180-WJM-CBS
KEYBANK NATIONAL ASSOCIATION,
Plaintiff,
v.
NORTHWEST PROFESSIONAL COLOR, INC.,
Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT
AGAINST DEFENDANT NORTHWEST PROFESSIONAL COLOR, INC.
Plaintiff KeyBank National Association (“Plaintiff”) brings this action against
Defendant Northwest Professional Color, Inc. (“Defendant”) for breach of contract.
(ECF No. 1.) Before the Court is Plaintiff’s Motion for Default Judgment Against
Defendant Northwest Professional Color, Inc. (“Motion”). (ECF No. 10.) For the
following reasons, the Motion is granted.
I. BACKGROUND
On December 20, 2013, and March 26, 2014, Plaintiff entered into two
Installment Payment Agreements with Defendant, under which it extended financing to
Defendant in exchange for monthly payments. (ECF No. 1 at 2–3.) On or about
August 27, 2014, Plaintiff entered into two Extension Agreements with Defendant. (Id.
at 5.) The Extension Agreements modified the payment schedule and the terms of the
original Installment Payment Agreements. (Id.) Except as expressly modified by the
Extension Agreements, the original agreements remained “in full force and effect.”
(ECF No. 1-1 at 2, 4.) According to Plaintiff, Defendant defaulted on its obligations
under these agreements. (ECF No. 1 at 5.)
Plaintiff initiated this action by filing a Complaint on October 1, 2015. (See id.)
Plaintiff brings a claim against Defendant for breach of contract. (Id. at 7.) Defendant
did not answer or otherwise move in response to the Complaint. On October 28, 2015,
Plaintiff filed a Motion for Entry of Default against Defendant. (ECF No. 5.) The Clerk
filed an Entry of Default as to Defendant on October 29, 2015. (ECF No. 6.) Plaintiff
filed the Motion before the Court on December 10, 2015. (ECF No. 10.) Defendant
filed no response.
The Court has reviewed the motion, the exhibits and affidavits, and the
applicable law, and is sufficiently advised on the issues involved.
II. LEGAL STANDARD
Default must enter against a party who fails to appear or otherwise defend a
lawsuit. Fed. R. Civ. P. 55(a). Pursuant to Rule 55(b)(1), default judgment must be
entered by the clerk of court if the claim is for “a sum certain”; in all other cases, “the
party must apply to the court for a default judgment.” Fed. R. Civ. P. 55(b)(2).
“[D]efault judgment must normally be viewed as available only when the adversary
process has been halted because of an essentially unresponsive party. In that
instance, the diligent party must be protected lest he be faced with interminable delay
and continued uncertainty as to his rights. The default judgment remedy serves as
such a protection.” In re Rains, 946 F.2d 731, 732–33 (10th Cir. 1991) (internal
quotation marks and citation omitted).
2
Further, “a party is not entitled to a default judgment as of right; rather the entry
of a default judgment is entrusted to the ‘sound judicial discretion’ of the court.”
Greenwich Ins. Co. v. Daniel Law Firm, 2008 WL 793606, at *2 (D. Colo. Mar. 22,
2008). Before granting a motion for default judgment, the Court must take several
steps. First, the Court must ensure that it has personal jurisdiction over the defaulting
defendant and subject matter over the action. See Williams v. Life Sav. & Loan, 802 F
.2d 1200, 1202–03 (10th Cir. 1986). Next, the Court should consider whether the
well-pleaded allegations of fact—which are admitted by the defendant upon
default—support a judgment on the claims against the defaulting defendant. See Fed.
Fruit & Produce Co. v. Red Tomato, Inc., 2009 WL 765872, at *3 (D. Colo. Mar. 20,
2009) (“Even after entry of default, however, it remains for the court to consider whether
the unchallenged facts constitute a legitimate basis for the entry of a judgment.”). “In
determining whether a claim for relief has been established, the well-pleaded facts of
the complaint are deemed true.” Id. (citing Dundee Cement Co. v. Howard Pipe &
Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983)).
III. ANALYSIS
A.
Jurisdiction
First, the Court has subject matter jurisdiction over this case. District courts have
subject matter jurisdiction over “all civil actions where the matter in controversy exceeds
the sum or value of $75,000 . . . and is between . . . citizens of different states.” 28
U.S.C. § 1332(a)(1). Plaintiff is a citizen of Ohio and Defendant is a citizen of North
Dakota. (ECF No. 1 at 1–2.) The amount in controversy is more than $75,000. (Id. at
3
2–3.) Thus, the Court is satisfied that it has subject matter jurisdiction over this lawsuit.
Second, the parties have consented to personal jurisdiction and venue in this
Court. (Id. at 2.) The two “Extension Agreements”—signed by Defendant—state,
“Litigation between the parties shall be commenced only in a state or Federal court
located in Denver, Colorado.” (Id.; ECF No. 1-1 at 2–5.) Plaintiff’s allegations in the
Complaint are sufficient to satisfy the Court that it may exercise personal jurisdiction
over Defendant.
B.
Breach of Contract
Plaintiff claims that Defendant breached the Installment Payment Agreements
and the Extension Agreements. (ECF No. 1 at 7.) Plaintiff asserts that the Installment
Payment Agreements and the Extension Agreements are valid contracts. (Id.)
Furthermore, Defendant signed two “Payment of Proceeds” documents which
authorized Plaintiff to commence billing under the agreements. (ECF No. 1-3 at 2–3.)
Plaintiff alleges that it extended financing to Defendant, and therefore performed
its obligations under the contract. (ECF No. 1 at 2–3.) However, Plaintiff alleges that
Defendant defaulted on its monthly obligations under the contracts on or about
February 28, 2015. (Id. at 5.) Pursuant to the Installment Payment Agreements, upon
Defendant’s default, Plaintiff acquired the right to accelerate all payments under those
agreements. (ECF No. 1 at 4; ECF No. 1-2 at 3, 6.) Plaintiff sent Notices of Default
and Notices of Deficiency to Defendant, to inform the Defendant that Plaintiff had
accelerated all past due, current, and future obligations and that Defendant was
required to pay the deficiency balance. (ECF No. 1 at 6; ECF No. 1-5; ECF No. 1-6.)
4
Plaintiff alleges that Defendant never paid this deficiency balance. (ECF No. 1 at 6.)
The Extension Agreements state that all dealings between the parties shall be
governed by and construed in accordance with the laws of the State of Colorado. (ECF
No. 1-1 at 2.) Under Colorado law, a party attempting to recover on a claim for breach
of contract must prove the following elements: (1) the existence of a contract;
(2) performance by the plaintiff or some justification for nonperformance; (3) failure to
perform the contract by the defendant; and (4) resulting damages to the plaintiff. W.
Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992).
Taking the facts pled in Plaintiff’s Complaint as true, Plaintiff has shown that
Defendant breached its contract with Plaintiff under Colorado law. First, Plaintiff alleges
that the Installment Payment Agreements and the Extension Agreements are valid
contracts. The agreements indicate that financing was to be exchanged for
Defendant’s payments, and each agreement was signed by Defendant—the party
against whom enforcement is sought. (ECF No. 1-1; ECF No. 1-2.) Plaintiff also
signed both Extension Agreements. (ECF No. 1-1.) This is satisfactory to demonstrate
the existence of valid contracts for default judgment purposes. Next, Plaintiff pleads
that he performed under the contracts by providing financing, and that Defendant failed
to perform its contractual obligations when it defaulted and failed to pay the deficiency
balance. Lastly, Plaintiff alleges that, as a result of Defendant’s breach, it has suffered
damages in the amount of $114,577.45. (ECF No.1 at 6.) Therefore, Plaintiff’s
allegations satisfy all four elements of a breach of contract claim.
The Court finds that Plaintiff has established that it is entitled to a default
judgment against Defendant. The Court will enter a default judgment against
5
Defendant and in favor of Plaintiff.
C.
Damages
Having determined that a default judgment should be entered, the Court must
next determine the amount and character of Plaintiff’s recovery. See 10A Charles Alan
Wright et al., Federal Practice & Procedure § 2688 (3d ed., Apr. 2015 update); see also
Herzfeld v. Parker, 100 F.R.D. 770, 773 (D. Colo. 1984) (“A final default judgment
cannot be entered against a party until the amount of damages has been
ascertained.”). Actual proof must support any default judgment for money damages.
See Klapprott v. United States, 335 U.S. 601, 611–12 (1949). In some situations, that
proof is provided in a hearing; however, the Court may enter a default judgment without
a hearing if the amount claimed is “a liquidated sum or one capable of mathematical
calculation.” Hunt v. Inter-Globe Energy, Inc., 770 F.2d 145, 148 (10th Cir. 1985).
Here, Plaintiff has supplied an affidavit showing that it is entitled to recover
$114,577.45. (ECF No. 14 at 2.) This amount was developed through mathematical
calculations, based on the terms of the Installment Payment Agreements and the
Extension Agreements. (ECF No. 1; ECF No. 14.) Under the First Extension
Agreement, Defendant was required to pay Plaintiff $2,113.08 per month commencing
November 30, 2014, and continuing on the 30th day of each month thereafter through
and including January 30, 2017, plus one additional payment of $2,113.08, plus all late
fees and other costs. (ECF No. 1-1 at 2.) Under the Second Extension Agreement,
Defendant was required to pay Plaintiff $2,013.77 per month commencing November
30, 2014, and continuing on the 30th day of each month thereafter through and
6
including April 30, 2017, plus one additional payment of $2,013.77, plus all late fees
and other costs. (ECF No. 1-1 at 4.) Additionally, the Installment Payment Agreements
provided for a “late charge rate” to be applied if any payment was “not received within
ten days after its due date.” (ECF No. 1-2 at 2, 5.) The late charge rate would be “the
greater of (a) 5% of each delayed sum or (b) $29.” (Id.)
The deficiency balances under the Extension Agreements were calculated as of
August 13, 2015. (ECF No. 14 at 2.) The deficiency balance for the First Extension
Agreement consisted of six missed payments of $2,113.08 each—which were due in
February, March, April, May, June, and July 2015—plus late charges for those
payments, plus 20 remaining payments of $2,113.08 each. (Id.) The deficiency
balance for the Second Extension Agreement consisted of six missed payments of
$2,013.77 each—which were due in February, March, April, May, June, and July 2015,
plus late charges for those payments—plus 23 remaining payments of $2,013.77 each.
(Id.) The total deficiency balance of $114,577.45 remains unpaid. (Id.) No hearing is
required to establish these amounts. In passing, Plaintiff also requests “interest” in
addition to the judgment amount. (ECF No. 1 at 7.) However, Plaintiff provides no
description of how that interest is to be calculated—no rate or method of accrual is
specified—in either the Complaint or in its supplemental accounting. (See ECF No. 1;
ECF No. 14.) Given that prejudgment interest is a matter in this Court’s discretion,
Caldwell v. Life Insurance Company of North America, 287 F.3d 1276, 1287 (10th Cir.
2002), the Court declines to award prejudgment interest in these circumstances.
Plaintiff, however, shall have postjudgment interest at the federal statutory rate.
Plaintiff requests reasonable attorneys’ fees in its Complaint and may file a motion
7
seeking attorneys’ fees in accordance with Federal Rule of Civil Procedure 54(d)(2) and
D.C.COLO.LCivR 54.3. Accordingly, default judgment shall be entered for the
calculable amount of damages described above.
IV. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.
Plaintiff’s Motion for Default Judgment Against Defendant Northwest
Professional Color, Inc. (ECF No. 10) is GRANTED;
2.
The Clerk shall enter judgment in favor of Plaintiff and against Defendant
Northwest Professional Color, Inc. in the amount of $114,577.45 with
postjudgment interest at the statutory rate until paid; and
3.
Plaintiff shall have its costs.
Dated this 13th day of April, 2016.
BY THE COURT:
William J. Martínez
United States District Judge
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?