Wilmington Trust, National Association, as Trustee, for the Benefit of the Holders of Comm 2014-UBS4 Mortgage Trust Commercial Mortgage Pass-Through Certificates v. BatonHotel, LLC

Filing 18

RULING granting 14 MOTION for Default Judgment as to BatonHotel, LLC and to Certify and Enter Judgment as Final Pursuant to Rules 55(b) and 54(b). Judgement shall be entered accordingly. Signed by Judge Shelly D. Dick on 5/15/2017. (LLH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

WILMINGTON TRUST,
NATIONAL ASSOCATION

CIVIL ACTION

VERSUS

16-719-SDD-RLB

BATONHOTEL, LLC.
RULING
This matter is before the Court on the Motion for Entry of Default Judgment as to
BatonHotel, LLC and Enter Judgment as Final Pursuant to Rules 55(b) and 54(b)1 filed
by Plaintiff, Wilmington Trust, National Association (“Wilmington Trust”). Defendant,
BatonHotel LLC. (“Defendant”), has failed to respond to this motion in the same way it
has failed to respond to any pleadings in this case. For the following reasons, Wilmington
Trust’s motion will be GRANTED.
I.

FACTUAL BACKGROUND
On October 26, 2016, Wilmington Trust filed a Complaint2 against Defendant.

Counts I, II, III, IV, & V ask the Court to enter judgment against Defendant for: (1)
judgment in the amount of $3,783,426.05 plus interest after October 18, 2016 on the
principal balance at the default rate of interest (10.94%) compounded monthly,
reasonable attorney’s fees and additional amounts accruing after October 18, 2016 and
all costs of this suit and of executing on any judgment resulting therefrom; (2) that the
mortgage and assignment be recognized and maintained and that, in due course, the

1
2

Rec. Doc. 14.
Rec. Doc. 1.

Mortgaged Property be sold and, out of the proceeds thereof, Plaintiff’s claim, with
interest, attorney’s fees, late charges, Yield Maintenance Premium, expenses and costs
be paid in preference and priority over all other persons; (3) that, upon Wilmington Trust’s
posting of any sequestration bond found to be required by the Court, a writ of
sequestration issue herein to the Marshal of this District directing and commanding him
to seize the Property and Proceeds described above and turn the same over to the
Keeper, as identified in the Complaint as PELA Associates LLC; (4) That PELA
Associates LLC be duly appointed as Keeper of the Property, without bond, having all
rights, powers, duties, and obligations set forth in Louisiana Revised Statues 9:5136, et
seq; and (5) that Wilmington Trust’s rights to collect and recover Borrower’s Recourse
Liabilities as defined in the Loan Agreement and to pursue personal liability for the
payment of the entire Debt upon the occurrence of a Springing Recourse Event be
reserved and that Plaintiff be granted such other relief as may be equitable and just to
which it might be entitled under the Note, the Mortgage, the Assignment and the other
Loan Documents, at law and/or in equity.
The record reflects that Defendant was properly served on January 5, 2017.3
Defendant has never filed an answer or otherwise responded in any manner to the
Complaint. Thus, on January 27, 2017, Wilmington Trust sought preliminary entry of
default by the Clerk of Court as to Defendant.4 The Clerk of Court entered his Order5 of
default against Defendant on January 30, 2017. To date, Defendant has still failed to

3

Rec. Doc. 9.
Rec. Doc. 12.
5
Rec. Doc. 13.
4

answer or otherwise respond to the Complaint. Wilmington Trust now moves for entry of
a Default Judgment against Defendant.
II.

LAW
“Default judgments are a drastic remedy, not favored by the Federal Rules and

resorted to by courts only in extreme situations …[T]hey are available only when the
adversary process has been halted because of an essentially unresponsive party.”6 This
policy, however, is “counterbalanced by considerations of social goals, justice and
expediency, a weighing process [that] lies largely within the domain of the trial judge’s
discretion.”7 Considering these guidelines, “[a] party is not entitled to a default judgment
as a matter of right, even where the defendant is technically in default.”8 Further, while
the Court must accept pleaded facts as true, it retains the obligation to determine whether
those facts state a claim upon which relief may be granted.9
In determining whether a default judgment should be entered against a defendant,
courts have developed a two-part analysis.10 First, a court must consider whether the
entry of default judgment is appropriate under the circumstances.11 The factors relevant
to this inquiry include: (1) whether material issues of fact are at issue; (2) whether there
has been substantial prejudice; (3) whether the grounds for default are clearly

6
Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir.1989) (quoting H.F.
Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691, 139 U.S.App. D.C. 256
(D.C.Cir.1970)).
7
Rogers v. Hartford Life and Acc. Ins. Co., 167 F.3d 933, 936 (5th Cir. 1999).
8
Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir.1989) (quoting H.F.
Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691, 139 U.S.App. D.C. 256
(D.C.Cir.1970)).
9
See Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir.2001).
10
Busi and Step hens on Ltd. v. U.S. Trade Finance Corp., No. 3:13–CV–3935–B 2014 WL 1661213 at *1,
2014 U.S. Dist. LEXIS 57730, at *3 (N.D. Tx. April 25, 2014) (citing cases); Fidelity & Guaranty Life
Insurance Company v. Unknown, No. 13–CV–412–PRM, 2014 WL 2091257 at *2 2014 U.S. Dist. LEXIS
71313, at *5–6 (W.D.Tx. May 16, 2014) (citing cases).
11
See Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).

established; (4) whether the default was caused by good faith mistake or excusable
neglect; (5) the harshness of a default judgment; and (6) whether the court would think
itself obliged to set aside the default on the defendant’s motion.12 Second, a court must
assess the merits of the plaintiff’s claims and find sufficient basis in the pleadings for the
judgment.13
III.

ANALYSIS
The Court finds that the above enumerated six factors weigh in favor of entering a

default judgment. First, there are no material facts in dispute. Upon entry of default by
the Clerk of Court, Defendant is deemed to have admitted the allegations of fact plead in
the Complaint. As such, no disputed material facts are present in this case. Second, it
is also undisputed that over four months have elapsed between service of the Complaint
and Defendant’s failure to file an answer or otherwise respond. Third, the grounds for
default judgment against Defendant are clearly established, as outlined by the Court
above. Fourth, there is no evidence before the Court to indicate that Defendant’s failure
to file an answer or otherwise respond was the result of a “good faith mistake or excusable
neglect”. Fifth, Defendant’s failure to file a responsive pleading or otherwise defend the
instant lawsuit for nearly seven months mitigates the harshness of the default judgment.
Finally, the Court is not aware of any facts that would give rise to “good case” to set aside
the default judgment if challenged by Defendant. After consideration of these factors, the
Court finds that entry of default judgment against Defendant is appropriate under the
circumstances.

12
13

Id.
See Nishimatsu Const. Co., Ltd. V. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).

Additionally, the Court must “assess the merits of the plaintiff’s claims and find
sufficient basis in the pleadings for the judgment”.14 The Court has thoroughly reviewed
the exhibits and evidence provided by Wilmington Trust in support of its motion along with
the applicable law and jurisprudence.

The Court finds that Wilmington Trust has

established by admitted facts and competent evidence that Defendant is liable to
Wilmington Trust for: 1) the principal balance of the note and all other interest
compounded monthly; 2) all additional amounts accruing after February 6, 2017, plus
federal judicial interest thereafter accruing on the aggregate amount of all sums owed; 3)
additional attorney’s fees incurred from and after February 6, 2017, and; 4) all costs of
this suit and of executing on any judgment resulting therefrom Borrower’s Obligations.
Additionally, Wilmington Trust’s mortgage and assignment on the mortgaged property
under control of the Keeper appointed by the Court’s Order15 is hereby recognized, and
said mortgaged property16 is ordered to be sold, and out of the proceeds thereof
Borrower’s Obligations, with interest, late charges, any additional amounts owed,
reasonable attorney’s fees and all costs will be paid to Wilmington Trust in preference
and priority over all other persons. It is further ordered that Wilmington Trust’s right to

14

Id.
Rec. Doc. 7.
16
One certain tract or parcel of land, located in Section 54, T8S, R1E and designated on “Map of the
Resubdivision of Tract B on the resubdivision of Lot 4 of Roberts property located in Section 54, T-8-S, R1-E, East Baton Rouge Parish, LA for Josephy Gladney & John L. Avant”, made by Joffrion and Assoc.,
Inc., consulting Engineers dated 10-2-1973, filed as Original 19 in Bundle 8705 of the official records of the
parish of East Baton Rouge, State of Louisiana, as TRACT “B-2-A”, which said tract measures 263.46 feet
front on the service road lying on the northeasterly side of Interstate I-10, by a depth on its northwesterly
side of 266.64 feet, a depth on its southeasterly side of 348.46 feet and measuring 283.59 feet across the
rear, as designated by map of Toxie Craft, Civil Engineer, dated February 28, 1978, and of record in the
office of the Clerk and Recorder of the Parish of East Baton Rouge, as Original 916, Bundle 9250. Together
will all buildings and improvements, appurtenances and attachments, rights, ways, privileges, servitudes,
advantages leases, movables, fixtures, equipment, furniture, royalties, rentals, vehicles, chattels, supplies,
inventories, and other tangible assets used in the operation of the hotel known as “Microtel” as well as all
intangible assets including the goodwill, franchise agreement(s), receivables, accounts and such.
15

pursue personal liabilities for the payment of the entire debt upon the occurrence of a
springing recourse event, as defined in the “Loan Agreement”, are reserved, and
Wilmington Trust is hereby granted such other relief as may be equitable and just and to
which it is entitled under the Note, Mortgage, Assignment and the other loan documents,
at law and/or in equity.
IV.

CONCLUSION
For the reasons set forth above, Wilmington Trust’s Motion for Entry of Default

Judgment as to BatonHotel, LLC and to Certify and Enter Judgment as Final Pursuant to
Rules 55(b) and 54(b)17 is hereby GRANTED. Judgment shall be entered accordingly.
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana on May 15, 2017.

S

JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

17

Rec. Doc. 14.