Invictus Residential Pooler Trust 1A v. Ziemba et al

Filing 23

MEMORANDUM AND ORDER that the plaintiff's motion for default judgment (filing 20 ) is granted. The defendants' motion for hearing (filing 21 ) is denied. A separate judgment and decree of foreclosure and order of sale will be entered. Ordered by Chief Judge John M. Gerrard. (Copies mailed to defendants) (LAC)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
INVICTUS RESIDENTIAL POOLER
TRUST 1A,
4:19-CV-3036
Plaintiff,
vs.

MEMORANDUM AND ORDER

CYNTHIA J. ZIEMBA, et al.,
Defendants.
This matter is before the Court on the plaintiff's motion for default
judgment (filing 20) and correspondence from the defendants that the Court
has filed as a motion for hearing (filing 21). The Court will grant the plaintiff's
motion and deny the defendants'.
BACKGROUND
The procedural history of this case is muddled. The plaintiff initially filed
suit against Cynthia Ziemba, Delroy Fischer, and an indeterminate number of
unknown parties who might be in possession of the real property that is the
subject of the suit. See filing 1. Ziemba filed a document captioned as an
"answer." Filing 9. Shortly thereafter, the Magistrate Judge entered an order
to show cause why the case should not be dismissed as to the remaining
defendants for failure to prosecute, and when the plaintiff did not respond to
her order, the Magistrate Judge entered her findings and recommendation that
the case be dismissed as to those defendants. Filing 10; filing 11. Only then did
the plaintiff turn up to object to the findings and recommendation, drop its
claims against any unnamed defendants, and move for Ziemba's and Fischer's
defaults. Filing 13; filing 14; filing 16.

The Court found that Fischer was clearly in default. Filing 17 at 3.
Ziemba, however, was more of a problem—but the Court found that her
"answer" wasn't an answer within the meaning of Fed. R. Civ. P. 7(a)(2), and
entered her default despite her "appearance." Filing 17 at 3-4. But the Court
noted that if either Ziemba or Fischer had a defense to the plaintiff's claim,
they could oppose a subsequent motion for default judgment, or "appear in this
case at any time and ask to have their defaults set aside." Filing 17 at 4.
The plaintiff did move for a default judgment. Filing 20. And the Court
received a response from Ziemba and Fischer. Filing 21. The Court filed that
document as a request for hearing—because it does ask for one—but it's not
clear what that hearing would be about. See filing 21. Ziemba denied having
received notice of the motion for default judgment, although she was apprised
of it by the Clerk of the Court. Filing 21 at 1. Ziemba described trying to work
with "FCI"1 to sell the property and pay off the loan, although it was not clear
when that had happened, and characterized FCI as rude and unprofessional.
Filing 21 at 1. She asked for "a hearing so that this may be resolved." Fischer
also described trying to work with FCI, and asked to "set up a hearing or at
least to assist us with getting a payoff from FCI." Filing 21 at 2.
DISCUSSION
When a default judgment is entered, the facts alleged in the plaintiff's
complaint—except as to damages—may not be later contested. Marshall v.
Baggett, 616 F.3d 849, 852 (8th Cir. 2010); Murray v. Lene, 595 F.3d 868, 871
(8th Cir. 2010). It remains for the Court to consider whether the unchallenged

1

FCI was the original loan servicer. Filing 1-3 at 2. The original lender was Athas Capital

Group, whose interest in the subject property was ultimately assigned to the plaintiff. See
filing 1 at 3; filing 1-4 at 1; filing 1-5 at 1.

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facts constitute a legitimate cause of action, since a party in default does not
admit mere conclusions of law. Id. It is incumbent upon the Court to ensure
that the unchallenged facts constitute a legitimate cause of action before
entering final judgment. Marshall, 616 F.3d at 852-53.
Here, they do: the plaintiff has sufficiently alleged the execution of a
promissory note and deed of trust, and default on the promissory note. See
filing 1. And importantly, nothing the defendants have filed disputes those
basic facts. See filing 17; filing 21. The greater obstacle to a default judgment
is that the defendants haven't been entirely absent from the proceeding.
There is a judicial preference for adjudication on the merits, so default
judgments are not favored by the law and should be a rare judicial act. Belcourt
Pub. Sch. Dist. v. Davis, 786 F.3d 653, 661 (8th Cir. 2015). When determining
whether to enter a default judgment, the Court may consider factors such as
the amount of money involved, whether material issues of fact or issues of
substantial public importance are at issue, whether the default is largely
technical, whether the plaintiff has been substantially prejudiced by the delay
involved, and whether the grounds for default are clearly established or are in
doubt. Id. The Court may also consider how harsh an effect a default judgment
might have, or whether the default was caused by a good-faith mistake or by
excusable or inexcusable neglect on the part of the defendant. Id.
Here, the most important factor is that there does not appear to be any
dispute about the underlying facts supporting the plaintiff's claim for relief.
The Court assumes that the consequences of a judgment will be serious, but
that does not change the fact that regardless of whether or not judgment is
entered by default, the defendants do not appear to have a meritorious defense
to the plaintiff's claim. Where a defendant appears and indicates a desire to
contest an action, the Court may exercise its discretion to refuse to enter

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default, in accordance with the policy of allowing cases to be tried on the merits.
Rogovsky Enter., Inc. v. Masterbrand Cabinets, Inc., 88 F. Supp. 3d 1034, 103940 (D. Minn. 2015). But while the defendants here have "appeared," at least in
some sense, nothing they've asked for suggests a desire to contest the case.
Rather, what the defendants seem to be asking for an opportunity to
negotiate a settlement. Perhaps that would be the plaintiff's best course, but it
is not something the plaintiff is obliged to pursue, that the Court can enforce,
or that constitutes a defense to the action. To the extent that a right to
redemption is provided by the Court's decree or Nebraska law, see Neb. Rev.
Stat. § 25-1530(1), the defendants may seek to pursue it.
IT IS ORDERED:
1.

The plaintiff's motion for default judgment (filing 20) is
granted.

2.

The defendants' motion for hearing (filing 21) is denied.

3.

A separate judgment and decree of foreclosure and order of
sale will be entered.

Dated this 19th day of October, 2020.
BY THE COURT:

John M. Gerrard
Chief United States District Judge

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