U.S. Bank, National Association v. Silver et al

Filing 48

MEMORANDUM Opinion and Order Signed by the Honorable John W. Darrah on 12/4/2013. Mailed notice(mjc, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
U.S. BANK NATIONAL ASSOCIATION, as trustee
under Securitization Servicing Agreement Dated as of
July 1, 2005 Structured Asset Securities Corporation,
Structured Asset Investment Loan Trust Mortgage
Pass-Through Certificates, Series 2005-HE1,
Plaintiff,
v.
STANFORD D. SILVER; DENISE J. SILVER;
KITCHEN DISTRIBUTORS OF AMERICA, INC.;
NORTHWEST MILLWORK COMPANY; and
SUBURBAN CONCRETE, INC.,
Defendants.

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Case No. 11-cv-6332
Judge John W. Darrah

MEMORANDUM OPINION AND ORDER
Plaintiff, U.S. Bank National Association, moves for default judgment pursuant to
Federal Rule of Civil Procedure 55. Plaintiff seeks a default judgment against Defendants
Stanford Silver; Denise Silver; Kitchen Distributors of America, Inc.; Northwest Millwork
Company; and Suburban Concrete, Inc. (collectively “Defendants”) for failure to answer the
Complaint. Defendants are the mortgagors of residential real property that Plaintiff seeks to
foreclose for failure to make payments on the mortgage since August 1, 2010. For the reasons
presented below, Plaintiff’s Rule 55 Motion for Default Judgment is granted.
BACKGROUND
On September 12, 2011, Plaintiff filed a Complaint seeking to foreclose on a mortgage
against Defendants Stanford Silver and Denise Silver (the “Silvers”) for failure to make monthly
installment payments from August 1, 2010 through the present day. Plaintiff joined
Kitchen Distributors of America, Inc.; Northwest Millwork Company; and Suburban Concrete,

Inc., as Defendants in order to terminate liens or judgments held by those Defendants against the
Silvers’ mortgaged real estate. Defendants were properly served with the Complaint on
November 12, 2011 by a private agency retained by Plaintiff. After Defendants did not plead or
otherwise answer the Complaint, Plaintiff filed a motion for default judgment on December 8,
2011, which was later withdrawn without prejudice with leave to reinstate. Counsel for the
Silvers appeared on February 9, 2012, and filed a motion for an extension of time to file an
answer or otherwise plead because counsel had been recently retained and needed additional
time to investigate the facts of the case. On February 16, 2012, the Court extended the
Defendants’ time to file their answer to March 16, 2012. Defendants failed to answer the
Complaint by the extended date, and Plaintiff again filed a motion for default judgment on
March 23, 2012. The Silvers responded to the motion for default judgment on March 26, 2012
by filing a motion for leave to file a responsive pleading, arguing their attorney’s family issues
prevented him from filing in a timely manner. On March 29, 2012, the Court granted the
Silvers’ motion for leave to file a responsive pleading, and Plaintiff again withdrew the motion
for default judgment without prejudice and with leave to reinstate the motion.
On April 2, 2012, the Silvers filed a motion to dismiss, which the Court denied in a
Memorandum Opinion and Order on October 3, 2012. In the several months that followed, the
parties engaged in discovery that the court ordered closed on March 29, 2013. None of the
Defendants filed an answer or other responsive pleading during this time period. On July 3,
2013, approximately nine months after the Court denied the Silvers’ motion to dismiss, Plaintiff
filed a Rule 55 Motion for Default Judgment based on the Defendants’ failure to plead, answer
or otherwise defend the allegations made against them in the Complaint. The Silvers filed a
response, and Plaintiff filed a reply.
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LEGAL STANDARD
Under the Federal Rules of Civil Procedure, a defendant must file its answer “within 21
days after being served with summons and complaint.” Fed. R. Civ. P. 8(a)(1)(A)(i). A
defendant who fails to do may be found in default under Federal Rule of Civil Procedure 55(a).
It is in the district court’s discretion whether to enter default judgment. O’Brien v. R.J. O’Brien
& Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993). Default judgment establishes a defendant
is liable, as a matter of law, for the causes of action alleged in the complaint by the plaintiff.
United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989).
When a defendant is found in default, all factual allegations in the complaint are deemed
admitted and not subject to challenge. Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994).
However, allegations in the complaint relating to the amount of damages are not deemed
admitted. Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th
Cir. 1983); see also Fed. R. Civ. P. 8(b)(6). The court may conduct hearings when it is necessary
to perform an accounting, ascertain damages, “establish the truth of any allegation by evidence,”
or investigate any other matter. Fed. R. Civ. P. 55(b)(2)(A)-(D). A default judgment regarding
damages may be entered without a hearing when “the amount claimed is liquidated or capable of
ascertainment from definite figures contained in the documentary evidence or in detailed
affidavits.” Dundee Cement Co., 722 F.2d at 1323. “Unless the award is clearly excessive,”
damages awarded as a result of default judgment will not be challenged. Merrill Lynch Mortg.
Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990) (citing Douglas v. Metro Rental Services,
Inc., 827 F.2d 252, 256 (7th Cir. 1987)).

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ANALYSIS
Entry of Default and Default Judgment
In response to Plaintiff’s motion for default judgment, the Silvers offer no good cause for
their failure to file an answer to the Complaint after the Silvers’ motion to dismiss was denied.
See Fed. R. Civ. P. 12(a)(4)(A) (requiring a responsive pleading 14 days after the court denies a
motion). The Silvers do not contest the default and instead challenge the damages claimed by
the Plaintiff. Even though Plaintiff filed the motion for default judgment nine months after the
Court’s ruling on the motion to dismiss, the delay in filing the motion has no bearing on
Defendants’ default for their failure to file an answer to the Complaint. During the several
months following the court’s denial of the Silvers’ motion to dismiss for failure to state a claim,
Defendants did not file their answer, nor did they seek leave to file a motion for an extension of
time to file their answer. See Fed. R. Civ. P 6(b)(1)(B) (allowing the court to extend the time to
perform an act after expiration of the time allowed to perform that act only when the party failed
to act as a result of excusable neglect). Because Defendants did not present any good cause or
excusable neglect for their failure to file an answer to the Compliant, the entry of default and
default judgment is appropriate. See Narayan, 908 F.2d at 252 (7th Cir. 1990) (finding the
“court acted within its discretion in entering the default judgment” against the defendant who had
not filed an answer, “presented no reason for the court to refrain from entering judgment against
them, and had offered no explanation or justifiable excuse for their conduct”).
Taking the factual allegations in the Complaint as true, Plaintiff has demonstrated that, on
March 28, 2005, the Silvers secured a mortgage in the amount of $476,250 from Finance
America, LLC, for the address commonly known as 1206 Westchester Court, Buffalo Grove,
Illinois 60089. (Comp. ¶ 10(a)-(d); (h)-(j).) The Complaint also demonstrates the outstanding
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principal balance on the mortgage is $473,379.61, which is owned by U.S. Bank National
Association and serviced by Ocwen Loan Servicing, LLC (“Ocwen”). (Id. ¶ 10(d); (j).) Finally,
the Complaint proves the mortgage is in default due to the Silvers’ failure to pay the monthly
installments of principal, interest, and taxes, beginning August 1, 2010. (Id. ¶ 10(j).)
Damages
In their Response, the Silvers argue default judgment is not appropriate because Plaintiff
did not sufficiently support the damages claims. Specifically, they contend Plaintiff did not
provide information regarding the entire life of the loan, dating back to March 28, 2005, but
rather only provided information from July 2010 through November 2011. They also challenge
the veracity of the Affidavit of Debt because Ocwen did not begin servicing the loan until
August 31, 2010. However, the records submitted by Plaintiff reflect account activity beginning
July 12, 2010. Although Ocwen did not begin servicing the loan until August 31, 2010, the
affiant of the Affidavit of Debt states the loan records “were made at or near the time by, or from
information provided by, persons with knowledge of the activity and transactions reflected in
such records, and are kept in the ordinary course of the business activity regularly conducted by
Ocwen. . . .” (Pl.’s Rule 55 Mot. for Default, Ex. 3 ¶ 3.) The affiant also states that, based on
the review of the servicing records for the Silvers’ account, the Silvers’ indebtedness, as of
November 3, 2011, is $546,364.98 in addition to attorney’s fees and costs. (Id. at ¶¶ 5-6.) Under
penalty of perjury, the affiant signed and notarized the affidavit declaring the facts contained
therein are true. (Id. at 3.) Because there is no indication the facts and statements in the affidavit
lack reliability or trustworthiness, the affidavit and its supporting documentation are sufficiently
detailed and definite to prove the Silvers’ indebtedness and the damages incurred as a result of
the Silvers’ default. See Fargo Bank, N.A. v. Morgan, No. 12 C 4797, 2013 WL 3670243, at *25

3 (N.D. Ill. July 12, 2013) (finding an affidavit regarding loan servicing records satisfied the
requirements of the business records exception to the rule against hearsay and was sufficient to
prove the defendant’s mortgage liability on summary judgment).
Here, the Silvers do not specifically refute the default on their mortgage, their
indebtedness, or the damages claimed by the Plaintiff. The Silvers’ conclusory argument that the
evidence does not properly support the award of any damages is insufficient to challenge the
claimed indebtedness and damages. Accordingly, the Silvers are liable for the principal balance,
escrow, late fees, unpaid interest, other collection expenses, and attorney fees and costs
associated with this litigation that are ascertainable from the evidence presented by the Plaintiff.
CONCLUSION
Plaintiff’s Rule 55 Motion for Default Judgment [37] is granted, Defendants are deemed
in default, and an Order of Default Judgment of Foreclosure and Sale is entered against the
Defendants. Finally, the Plaintiff’s Motion to Appoint a Special Commissioner [38] is granted.
The Judicial Sales Corporation is hereby appointed as special commissioner for the purpose of
conducting a public foreclosure sale of the property in accordance with the terms of the
Judgment of Foreclosure.

Date:

December 4, 2013

______________________________
JOHN W. DARRAH
United States District Court Judge

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