United States of America v. LaBarge
Filing
17
MEMORANDUM-DECISION AND ORDER re 8 MOTION for Default Judgment as to Christine LaBarge filed by United States of America: The Court hereby ORDERS that the Plaintiff's motion for entry of default judgment is GRANTED; and the Court furt her ORDERS that damages are awarded in the following amounts: (1) unpaid principal and prejudgment interest for the first cause of action in the amount of $508.12; (2) unpaid principal and prejudgment interest for the second cause of action i n the amount of $6,349.63; (3) post-judgment interest accruing at the statutory rate as discussed above; and the Court further ORDERS that Plaintiff's request for costs in the amount of $25.00 for the statutory fee for service and tra vel is denied; the Court further ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order on all parties in accordance with the Local Rules; and the Court further ORDERS that the Clerk of the Court shall enter judgment in Plaintiff's favor and close this case. Signed by U.S. District Judge Mae A. D'Agostino on 2/27/2017. (ban)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
UNITED STATES OF AMERICA,
Plaintiff,
vs.
8:15-cv-01330
(MAD/CFH)
CHRISTINE LABARGE,
Defendant.
____________________________________________
APPEARANCES:
OF COUNSEL:
OVERTON, RUSSELL, DOERR &
DONOVAN, LLP
19 Halfmoon Executive Park Drive
Clifton Park, New York 12065
Attorneys for Plaintiff
LINDA L. DONOVAN, ESQ.
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On November 10, 2015, the United States of America ("Plaintiff") commenced this action
alleging that Christine LaBarge ("Defendant") defaulted on two promissory notes. See Dkt. No. 1
at 2-3. On July 18, 2016, the Court granted Plaintiff's motion for default judgment with respect to
liability, but denied the demanded relief with leave to reapply for damages. See Dkt. No. 10 at 6.
Currently before the Court is Plaintiff's motion for entry of damages. See Dkt. No. 14.
II. BACKGROUND
The Court has taken the facts set forth below from Plaintiff's complaint, the Certificates of
Indebtedness from the U.S. Department of Education, an affidavit submitted by Plaintiff's
counsel, and attached exhibits.
Defendant is a resident of Clinton County, New York. See Dkt. No. 1 at 1. Plaintiff's first
cause of action asserts that Defendant executed a promissory note on or about October 22, 2002
to secure a Direct Consolidation loan from the U.S. Department of Education. See Dkt. No. 1 at
2; Dkt. No. 1-1 at 1; Dkt. No. 14 at 3. According to the Certificate of Indebtedness from the U.S.
Department of Education related to that loan (the "First Certificate of Indebtedness"), the loan
was disbursed for $697.00 on November 12, 2002 at 6.875% interest per annum. See Dkt. No. 14
at 3. Defendant defaulted on the loan on September 24, 2003. See id. As of August 26, 2016,
Defendant owed $289.51 in principal and $209.41 in interest. See id. Interest accrues on the
principal at a rate of $0.05 per day. See id.
Plaintiff's second cause of action asserts that Defendant executed a promissory note on or
about February 27, 2004 to secure a Direct Consolidation loan from the U.S. Department of
Education. See Dkt. No. 1 at 2; Dkt. No. 1-1 at 2; Dkt. No. 14 at 4. According to the Certificate
of Indebtedness related to that loan (the "Second Certificate of Indebtedness"), the loan was
disbursed for $3,477.94 on January 26, 2005 at 7.00% interest per annum. See Dkt. No. 14 at 4.
Defendant defaulted on the loan on November 25, 2005. See id. As of August 26, 2016,
Defendant owed $3,439.33 in principal and $2,788.86 in interest. See id. Interest accrues on the
principal at a rate of $0.66 per day. See id.
On December 12, 2015, Plaintiff served Defendant with the complaint. See Dkt. No. 4.
Plaintiff filed a request for entry of default on January 5, 2016. See Dkt. No. 5. On January 8,
2016, the Clerk of the Court entered default against Defendant pursuant to Rule 55(a) of the
Federal Rules of Civil Procedure. See Dkt. No. 7; Fed. R. Civ. P. 55(a). On January 11, 2016,
Plaintiff filed a motion for default judgment pursuant to Rule 55(b) of the Federal Rules of Civil
Procedure. See Dkt. No. 8.
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On July 18, 2016, this Court granted Plaintiff's motion for default judgment with respect
to liability, but denied Plaintiff's motion with respect to damages because Plaintiff failed to meet
its burden to establish a basis for the damages claimed. See Dkt. No. 10 at 5-6. While Plaintiff
submitted an attorney Affidavit of Amount of Due, setting forth the principal, the interest owed,
and the per annum rate of interest, Plaintiff failed to satisfy Local Rule 55.2, which requires the
interest rate submitted to be calculated at a per diem rate as well as the per annum rate. See id. at
4-5; see also LOCAL RULES N.D.N.Y. 55.2(a). Additionally, the Court found that Plaintiff could
not recover server and travel fees for serving Defendant with the summons and complaint without
proving that these costs were actually incurred. See Dkt. No. 10 at 5.
In order to establish its entitlement to the damages claimed, Plaintiff was directed to
submit a certificate of indebtedness, a full promissory note, disbursement history, demand for
payment, evidence of the date of default, and evidence of the amount of the loan applied for and
actually received. See id. at 6. On August 12, 2016, Plaintiff submitted a letter request for an
additional 30 days to obtain the necessary documentation to establish its claimed damages. See
Dkt. No. 12. On September 7, 2016, Plaintiff submitted an attorney Affidavit of Amount Due and
the Certificates of Indebtedness. See Dkt. No. 14.
III. DISCUSSION
"Where a default occurs, the well-pleaded factual allegations set forth in a complaint
relating to liability are deemed true." Gesualdi v. Seacost Petroleum Prod., Inc., 97 F. Supp. 3d
87, 95 (E.D.N.Y. 2015) (citing Greyhound Exhibitgroup, Inc. v. E.L. U.L. Realty Corp., 973 F.2d
155, 158 (2d Cir. 1992) (other citations omitted)). "While a default judgment constitutes an
admission of liability, the quantum of damages remains to be established by proof unless the
amount is liquidated or susceptible [to] mathematical computation." Flaks v. Koegel, 504 F.2d
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702, 707 (2d Cir. 1974) (citations omitted); see also Joseph v. HDMJ Rest., Inc., 970 F. Supp. 2d
131, 149 (E.D.N.Y. 2013) (citations omitted). "[E]ven upon default, a court may not rubberstamp the non-defaulting party's damages calculation, but rather must ensure that there is a basis
for the damages that are sought." Overcash v. United Abstract Group, Inc., 549 F. Supp. 2d 193,
196 (N.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155
(2d Cir. 1999)). "The burden is on the plaintiff to establish its entitlement to recovery." Bravado
Int'l Grp. Merch. Servs., Inc. v. Ninna, Inc., 655 F. Supp. 2d 177, 189 (E.D.N.Y. 2009) (citation
omitted). "While 'the court must ensure that there is a basis for the damages specified in a default
judgment, it may, but need not, make the determination through a hearing.'" Id. at 190 (quotation
omitted).
Plaintiff was directed to submit specific documentary evidence sufficient to "ascertain the
amount of damages with reasonable certainty." Alcantara, 183 F.3d at 155 (citation omitted).
"[A] document containing both the borrower's signature and the amount of the loan applied for
and disbursed" may serve as a basis for an award of damages. See United States v. Linn, No. 10CV-5289, 2011 WL 2848208, *3 (E.D.N.Y. July 14, 2011). In addition, damages have been
awarded "relying solely on Certificates of Indebtedness." United States v. Reeves, No. 5:12-CV0886, 2013 WL 4508721, *2 (N.D.N.Y. Aug. 23, 2013) (citing United States v. Zdenek, No. 10CV-5566, 2011 WL 6754100, *2 (E.D.N.Y. Dec. 22, 2011)).
Plaintiff has provided two Certificates of Indebtedness from the U.S. Department of
Education signed under penalty of perjury by a loan analyst in support of its claimed damages.
See Dkt. No. 14 at 3-4. As discussed above, the First Certificate of Indebtedness sets forth the
loan disbursements and the amounts due on that loan as of August 26, 2016. As of that date,
Defendant owed $289.51 in principal and $209.41 in interest, for a total debt of $498.92. See id.
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at 3. Currently, interest accrues on the principal at a daily rate of $0.05. See id. As such, an
additional $9.20 in interest has accrued between the date the interest was calculated in the First
Certificate of Indebtedness and the date of this decision, for a total debt of $508.12.
The Second Certificate of Indebtedness also sets forth the loan disbursements and the
amounts due on that loan as of August 26, 2016. As of that date, Defendant owed $3,439.33 in
principal and $2,788.86 in interest, for a total debt of $6,228.19. See id. at 4. Interest accrues on
the principal at a daily rate of $0.66. See id. at 4. As such, an additional $121.44 in interest has
accrued between the date the interest was calculated in the Second Certificate of Indebtedness and
the date of this decision, for a total debt of $6,349.63.
As stated above, a Certificate of Indebtedness may serve as a basis to justify an award of
damages without further evidence. See Reeves, 2013 WL 4508721, at *2. Therefore, Plaintiff has
established that it is entitled to a judgment in its favor in the amount of $508.12 on its first cause
of action and $6,349.63 on its second cause of action.
Plaintiff further asserts it is entitled to recover from Defendant $25.00 in process server
and travel fees pursuant to 28 U.S.C. § 1921. See Dkt. No. 8 at 4-5. Pursuant to the Local Rules,
"[t]he party seeking costs shall accompany its request with receipts indicating that the party
actually incurred the cost that it seeks." LOCAL RULES N.D.N.Y. 54.1(a). Plaintiff, however, has
failed to provide any explanation or documentation to support this request for fees.
Moreover, pursuant to 28 U.S.C. § 1961(a), Plaintiff is also entitled to post-judgment
interest. The rate of such interest "shall be calculated from the date of the entry of the judgment,
at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the
Board of Governors of the Federal Reserve System, for the calendar week preceding the date of
the judgment." 28 U.S.C § 1961(a) (internal footnote omitted).
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IV. CONCLUSION
After carefully reviewing the entire record in this matter, Plaintiff's submissions and the
applicable law, and for the above-stated reasons, the Court hereby
ORDERS that the Plaintiff's motion for entry of default judgment is GRANTED; and the
Court further
ORDERS that damages are awarded in the following amounts:
(1) unpaid principal and prejudgment interest for the first cause of action in the
amount of $508.12;
(2) unpaid principal and prejudgment interest for the second cause of action in the
amount of $6,349.63;
(3) post-judgment interest accruing at the statutory rate as discussed above; and the
Court further
ORDERS that Plaintiff's request for costs in the amount of $25.00 for the statutory fee for
service and travel is denied; the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision
and Order on all parties in accordance with the Local Rules; and the Court further
ORDERS that the Clerk of the Court shall enter judgment in Plaintiff's favor and close
this case.
IT IS SO ORDERED.
Dated: February 27, 2017
Albany, New York
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