Lee v. Foxpointe Condominium Association et al
Filing
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OPINION and ORDER Denying Plaintiff's 61 Motion for Default Judgment. Signed by District Judge Linda V. Parker. (RLou)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
F.O. LEE,
Plaintiff,
Civil Case No. 14-11216
Honorable Linda V. Parker
v.
FOXPOINTE CONDOMINIUM
ASSOCIATION, et al.,
Defendants.
_______________________________/
OPINION AND ORDER DENYING PLAINTIFF’S MOTION FOR
DEFAULT JUDGMENT [ECF NO. 61]
I.
Procedural History
Plaintiff F.O. Lee (“Plaintiff”), who has filed his complaint in pro per, 1 is a
co-owner of the Defendant Foxpointe Condominium Association (the
“Association”), located in Oakland County, Michigan. Plaintiff filed this lawsuit
on March 24, 2014, alleging violations of the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. § 1961 et seq.; the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. 1692 et seq.; and Michigan state law claims of
breach of fiduciary duty, fraud, deceit, constructive fraud, negligent
misrepresentation, and negligence. (ECF No. 1.)
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An attorney, Timothy J. Harrington, entered an appearance on Plaintiff's behalf
on April 10, 2015. (ECF No. 55.)
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Defendants Makower Abbate PLLC and Kelly Belcher filed a motion to
dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 12).
Subsequently, Defendants Foxpointe Condominium Association (the
“Association”), Rita Folbe, Ralph Marcus, Marcus Management, Inc., Marv Perlin,
Raymond Silverman, and Murray Slomovitz joined in the motion to dismiss. (ECF
No. 18.) On March 13, 2015, the Court granted the motion to dismiss as to
Plaintiff’s federal claims and dismissed his state claims pursuant to 28 U.S.C. §
1367(c). (ECF No. 53.)
The two remaining Defendants in this action are Defendants Todd C.
Quarterman and Water Watch Corporation (collectively “Defendants”). On
December 15, 2015, Plaintiffs applied to the Court for a default judgment against
defendants, in accordance with Federal Rule of Civil Procedure 55(b)(2), by way
of filing a motion for default judgment on the docket. (ECF No. 61.) A hearing was
held on January 26, 2016.
II.
Applicable Law & Analysis
“When a party against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party's default.” Fed. R. Civ. P. 55(a). Further,
“[i]f the plaintiff's claim is for a sum certain or a sum that can be made certain by
computation, the clerk—on the plaintiff's request, with an affidavit showing the
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amount due—must enter judgment for that amount and costs against a defendant
who has been defaulted for not appearing and who is neither a minor nor an
incompetent person. Fed. R. Civ. P. 55(b)(1) When the plaintiff’s claim is not for a
sum certain, however, the party must apply to the court for a default judgment.”
Fed. R. Civ. P. 55(b)(2).
Additionally, when determining whether default judgment should enter,
courts in this district consider the following:
[T]he Court has broad discretion in determining the circumstances
under which a default judgment should enter. See, e.g., In re The
Home Restraurants, Inc., 285 F.3d 111, 114-15 (1st Cir. 2002). As the
authorities have noted, “[t]his element of discretion makes it clear that
the party making the request is not entitled to a default judgment as of
right, even when [a] defendant is technically in default and that fact
has been noted under Rule 55(a).” Wright & Miller, 10A Federal
Practice & Procedure § 2685 (3d ed.1998). Among the factors that the
Court may consider include how harsh an effect a default judgment
would have and whether the facts alleged in the complaint state a
valid cause of action. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d
61, 65 (2d Cir.1981); Wolf Lake Terminals, Inc. v. Mutual Marine Ins.
Co., 433 F.Supp.2d 933, 941 (N.D. Ind. 2005); Wright & Miller, 10A
Federal Practice & Procedure § 2685 (3d ed.1998).
Palmer v. Buscemi, No. CIV. 05-10094, 2007 WL 2903203, at *7 (E.D. Mich.
Sept. 30, 2007).
This Court previously explained in its March 13, 2015, Opinion and Order
(ECF No. 53) – granting the motion to dismiss joined in by all other Defendants –
that Plaintiff’s complaint does not state a valid claim against any Defendants in this
action for a violation of federal law, given that: (1) Plaintiff failed to allege facts
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sufficient to establish a RICO violation under 18 U.S.C. § 1962(c); and (2)
concerning his FDCPA claim, Plaintiff asserts general legal conclusions
insufficient to establish a violation of the act. (ECF No. 53 at. Pg. ID 5–9.) The
Court relies on its reasoning in its prior Opinion and Order (Id.) to determine that
Plaintiff does not state a valid claim against Defendants Todd C. Quarterman and
Water Watch Corporation.
The district court must exercise “sound judicial discretion” when
determining whether to enter judgment by default. Amica Mut. Ins. Co. v. Epplett,
No. 15-10442, 2015 WL 5469946, at *4 (E.D. Mich. Sept. 15, 2015) (further
citations omitted). Given that Plaintiff has failed to state a cause of action for any
federal claim, and this Court declines – pursuant to 28 U.S.C. §1367(c)(3) – to
exercise supplemental jurisdiction as to the remaining state law claims, the
severely harsh effect that would result from entering default against the remaining
Defendants would be improper.
At the default judgment hearing held on January 26, 2016, Plaintiff’s
counsel asserted that complete diversity jurisdiction exists over the remaining two
Defendants, and that the Court must therefore consider Plaintiff’s remaining state
law claims as to the remaining Defendants. Plaintiff’s counsel neglects the general
rule that, for purposes of determining the existence of diversity jurisdiction, the
citizenship of the parties is to be determined with reference to the facts as they
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existed at the time of filing. Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S.
567, 569-70 (2004). At the time of filing, complete diversity was lacking – due to
the fact that Plaintiff and various Defendants were residents of Michigan – thereby
rendering Plaintiff’s counsel’s assertion futile. As stated previously, having
dismissed the federal claims, the Court – pursuant to 28 U.S.C. §1367(c)(3) –
declines to exercise supplemental jurisdiction over Plaintiff’s state law claims.
Accordingly, for the foregoing reasons, Plaintiff’s motion for default
judgment against Defendants Todd C. Quarterman and Water Watch Corporation
is DENIED; his federal claims against these Defendants are DISMISSED WITH
PREJUDICE; and his state law claims against these Defendants are DISMISSED
WITHOUT PREJUDICE.
SO ORDERED.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: February 4, 2016
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, February 4, 2016, by electronic and/or
U.S. First Class mail.
s/ Richard Loury
Case Manager
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