HICA Education Loan Corporation v. Lackie

Filing 13

ORDER granting 11 Motion for Default Judgment. Signed by Judge Samuel H. Mays, Jr on 02/19/2013.

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

HICA EDUCATION LOAN CORP.,

)
)
)
)
)
)
)
)
)
)
)

Plaintiff,
v.
RICHARD M. LACKIE, a/k/a
RICHARD MALONE LACKIE,
Defendant.

No. 11-2894

ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

On January 23, 2012, the Clerk of Court entered default
against Defendant Richard Lackie (“Lackie”).
ECF No. 8.)
Corporation’s

(Entry of Default,

Before the Court is Plaintiff HICA Education Loan
(“HICA”)

Judgment against Lackie.

April

10,

2012

Motion

for

Default

(Mot. for Default J., ECF No. 11.)

Lackie has not responded and the time for doing so has passed.
For the following reasons, HICA’s Motion is GRANTED.
I.

1

Background 1

The background facts come from the factual allegations in HICA’s Complaint
and other pleadings and incorporated attachments, which are deemed admitted
because of Lackie’s default. See Murray v. Lene, 595 F.3d 868, 871 (8th Cir.
2010); United States v. Conces, 507 F.3d 1028, 1038 (6th Cir. 2007); Ford
Motor Co. v. Cross, 441 F. Supp. 2d 837, 848 (E.D. Mich. 2006).

HICA is a corporation organized and chartered under South
Dakota law.

(Compl. ¶ 1, ECF No. 1.)

Memphis, Tennessee.

Lackie is resident of

(Id. ¶ 2.)

Lackie signed two promissory notes (the “Notes”) pursuant
to the provisions of the United States Health Assistance Loan
(“HEAL”) Program, 42 U.S.C. §§ 292 et seq.
owns and/or holds the Notes.

(Id.)

(Id. ¶ 5.)

HICA

On October 16, 1992, Lackie

signed Note 1, in which he promised to pay $8,500, “to the
extent it is advanced [], to pay interest on the principal sum .
. . , and to pay authorized late charges,” reasonable attorney’s
fees, and costs.
2.)

(Id.); (see also October 16 Note, ECF No. 1-

On October 27, 1995, Lackie signed Note 2, in which he

promised to pay a “principal sum of $4,571.00, to the extent it
is advanced [], to pay interest on the principal sum . . . , and
to pay authorized late charges,” reasonable attorney’s fees, and
costs.
On

(Compl. ¶ 5); (see also October 27 Note, ECF No. 1-1.)

November

24,

2003,

Sallie

Mae,

Inc.

(“Sallie

Mae”),

the

original holder, executed a bill of sale and assigned the Notes
to HICA.

(October 16 Note 4); (October 27 Note 4.)

As the

holder of the Notes, HICA is entitled to receive all monies and
sums due.
HICA

(Compl. ¶ 6.)
alleges

that

the

sums

loaned and advanced to Lackie.

described
(Id. ¶ 7.)

in

the

Notes

were

Lackie failed to

make all of the payments that are due and owing under the Notes,
2

meaning that Lackie has defaulted.

(Id. ¶ 8.)

HICA demanded

that Lackie make payment on the Notes, but Lackie “failed and
refused, and continues to fail and refuse, to pay the sums due
and owing.”
principal,

(Id. ¶ 10.)
$1,604.95

in

Lackie owes $15,188.20 in unpaid

unpaid

interest,

$1.21

interest, and $6.42 in unpaid late charges.
alleges

that

it

is

entitled

to

recover

per

(Id. ¶ 11.)

those

attorney’s fees, costs, and prejudgment interest.
II.

in

amounts,

diem
HICA
plus

(Id. ¶ 12.)

Jurisdiction

A court’s default judgment is invalid unless it has proper
jurisdiction.
496,

501

See, e.g., Citizens Bank v. Parnes, 376 F. App’x

(6th

Cir.

2010)

(“Personal

jurisdiction

over

a

defendant is a threshold issue that must be present to support
any subsequent order of the district court, including entry of
the

default

judgment.”)

(citing

Kroger

Co.

v.

Malease

Foods

Corp., 437 F.3d 506, 510 (6th Cir. 2006)).
Courts

are

obligated

to

consider

subject-matter

and

personal jurisdiction, but not defects in venue, before entering
default judgment.

Compare In re Tuli, 172 F.3d 707, 712 (9th

Cir. 1999) (holding that a district court properly raised the
issue of personal jurisdiction sua sponte), and Williams v. Life
Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir. 1986) (per curiam)
(“[W]hen entry of a default judgment is sought against a party
who has failed to plead or otherwise defend, the district court
3

has an affirmative duty to look into its jurisdiction both over
the subject matter and the parties.”), and Columbia Pictures
Indus. v. Fysh, No. 5:06-CV-37, 2007 U.S. Dist. LEXIS 11234, at
*3-4

(W.D.

Mich.

subject-matter

Feb.

and

16,

personal

2007)

(considering

jurisdiction

and

before

finding

entering

a

default judgment), with Rogers v. Hartford Life & Accident Ins.
Co., 167 F.3d 933, 942 (5th Cir. 1999) (“The Supreme Court has
made clear that if a party defaults by failing to appear or file
a

timely

responsive

pleading,

the

party

waives

defects

in

venue.”) (citations omitted), and Williams, 802 F.2d at 1202
(“[I]f a party is in default by failing to appear or to file a
responsive
judgment

pleading,

may

be

defects

validly

in

venue

entered

and

are
the

waived,
judgment

a

default

cannot

be

attacked collaterally for improper venue.” (citing Hoffman v.
Blaski, 363 U.S. 335, 343 (1960)).
HICA brings this cause for nonpayment of the Notes under
HEAL, 42 U.S.C. §§ 292 et seq.

(Compl. ¶ 3.)

“A district court

has subject matter jurisdiction over any civil action ‘arising
under

the

States.’”

Constitution,

laws,

or

treaties

of

the

United

Davis v. United States, 499 F.3d 590, 594 (6th Cir.

2007) (quoting 28 U.S.C. § 1331).

“A claim arises under federal

law when the plaintiff’s statement of his own cause of action
shows

that

it

Constitution.”

is

based

upon

federal

laws

or

the

federal

Id. (quoting Cobb v. Contract Transp., Inc., 452
4

F.3d 543, 548 (6th Cir. 2006)).
under

federal

law,

the

Court

Because HICA brings its cause
has

subject-matter

jurisdiction

jurisdiction.

“Personal

under 28 U.S.C. § 1331.
The

Court

also

has

personal

jurisdiction can be either general or specific, depending upon
the nature of the contacts that the defendant has with the forum
state.”

Bird v. Parsons, 289 F.3d 865, 873 (6th Cir. 2002); see

also Gerber v. Riordan, 649 F.3d 514, 517 (6th Cir. 2011); Third
Nat'l Bank v. WEDGE Group, Inc., 882 F.2d 1087, 1089 (6th Cir.
1989).
contacts

“General jurisdiction is proper only where a defendant's
with

systematic

the

forum

state

nature

that

are

the

of

state

such

a

may

continuous

exercise

and

personal

jurisdiction over the defendant even if the action is unrelated
to the defendant's contacts with the state.”
at 873.

Parsons, 289 F.3d

“‘Presence’ in the state in this sense has never been

doubted when the activities of [a person] there have not only
been

continuous

and

systematic,

but

also

give

rise

to

the

liabilities sued on, even though no consent to be sued . . . has
been given.”

Int'l Shoe Co. v. Wash., 326 U.S. 310, 317 (1945)

(quotation omitted).
Lackie’s
systematic.”

contacts

with

Tennessee

are

Lackie is a Tennessee resident.

“continuous

and

Copies of the

Summons and Complaint were served on Lackie at his Tennessee

5

address.

(See Summons, ECF No. 2.)

The Court has personal

jurisdiction over Lackie.
III.

Standard of Review

Federal Rule of Civil Procedure 55(b)(2) governs default
judgments.
entered

See Fed. R. Civ. P. 55(b).

against

a

defendant,

that

party

“Once a default is
is

deemed

to

have

admitted all of the well pleaded allegations in the complaint,
except those relating to damages.”

Microsoft Corp. v. McGee,

490 F. Supp. 2d 874, 878 (S.D. Ohio 2007) (citing Antoine v.
Atlas Turner, Inc., 66 F.3d 105, 110-11 (6th Cir. 1995)); see
also Fed.

R.

Civ.

P.

8(b)(6)

(“An

allegation—other

than

one

relating to the amount of damages—is admitted if a responsive
pleading

is

required

and

the

allegation

is

not

denied.”).

Unlike factual allegations, “a party in default does not admit
mere conclusions of law.”

Anderson v. Johnson, 1999 U.S. App.

LEXIS 29636, at *5 (6th Cir., Nov. 4, 1999).
Because the Clerk has entered default against him, Lackie
is deemed to have admitted the factual allegations in HICA’s
complaint, other than those relating to damages.

If the factual

allegations provide a sufficient legal basis, the Court will
enter a default judgment and conduct an inquiry to determine
damages and other relief.

See Coach, Inc. v. Cellular Planet,

No. 2:09-cv-00241, 2010 U.S. Dist. LEXIS 45087, at *7 (S.D. Ohio

6

May 7, 2010) (citing Arista Records, Inc. v. Beker Enters., 298
F. Supp. 2d 1310, 1311-12 (S.D. Fla. 2003)).
IV.

Analysis
A. Default Judgment

HICA

asserts

that

Lackie

defaulted

on

the

Notes.

To

recover on a promissory note executed under federal law, a party
“must first make a prima facie showing that (1) the defendant
signed it, (2) the [plaintiff] is the present owner or holder
and (3) the note is in default.”

United States v. Petroff, 557

F.3d 285, 290 (6th Cir. 2009) (citing United States v. McDonald,
No. 93-1924, 1994 U.S. App. LEXIS 11280, at *2 (6th Cir. May 16,
1994)).

A holder may introduce evidence of the note and a sworn

transcript of the account or certificate of indebtedness.
(citation

omitted).

“Once

established,

defendant

nonexistence,

extinguishment

obligation.”

has

such

a

the

burden

or

prima

variance

October 24 Note.)

undertake

in

proving

payment

of

is
the
the

(See October 16 Note); (see also

HICA has attached exhibits showing that it is

the current owner or holder of the Notes.
24

of

case

Id.

Lackie signed the Notes.

(October

facie

Id.

Note
all

4.)
loan

The

Bill

servicing

of
and

(October 16 Note 4);

Sale

authorizes

collection

associated with loans executed under HEAL.

HICA

to

activities

See Pa. Higher Educ.

Assistance Agency v. Reinhart, No. 1:11-cv-125, 2012 U.S. Dist.
7

LEXIS 127181, at *3-4 (E.D. Tenn. Aug. 17, 2012).

HICA has

attached documentation showing that Lackie is in default.
Decl. of Robin Zimmerman, ECF No. 11-1.)

HICA has made a prima

facie showing that Lackie has defaulted on the Notes.
has elected not to dispute HICA’s claim.

(See

Lackie

HICA has stated a

claim under HEAL.
In addition to stating a valid cause of action, a plaintiff
seeking default judgment must fulfill several obligations.

See

Broad. Music, Inc. v. Marler, 1:09-cv-193, 2009 U.S. Dist. LEXIS
106147, at *4 (E.D. Tenn. Nov. 12, 2009) (citations omitted)).
A plaintiff must: (1) properly serve the defendant with process;
(2) demonstrate that the opposing party has failed to answer or
otherwise

respond

to

the

complaint;

(3)

submit

an

affidavit

stating that the defendant is not an infant or an incompetent
person;

and

(4)

submit

an

affidavit

stating

whether

the

defendant is in military service, or if plaintiff is unable to
determine whether the defendant is in military service. 2

See,

e.g., Reinhart, 2012 U.S. Dist. LEXIS 127181, at *6-7 (citations
omitted).
Lackie was served a summons and a copy of the Complaint on
October 11, 2011.
been entered.

(Summons); (see also ECF No. 5.)

Default has

HICA has submitted proof that Lackie is not an

2

A fifth factor, whether the defendant was served at least seven days before
entering an appearance, is irrelevant. See Fed. R. Civ. P. 55(b)(2). Lackie
has not entered an appearance.

8

infant or incompetent, and is not in military service.
Decl.

of

Robin

Zimmerman

¶¶

4-5.)

HICA

has

(See

fulfilled

its

procedural obligations.
Because HICA has stated a valid cause of action under HEAL
and

fulfilled

its

procedural

obligations,

entry

of

default

judgment against Lackie is appropriate.
B.

Damages

Entry of default judgment for a requested amount without
additional proof of damages is proper if a plaintiff’s claim is
for a certain sum, or if a plaintiff’s sum can be made certain
by computation.

Citizens Bank v. Parnes, 376 Fed. App’ x 496,

506 (6th Cir. May 4, 2010).

If a plaintiff's claim is not for a

sum that is certain or can be easily calculated, an evidentiary
hearing is generally required.
Although

proof

of

evidentiary hearing
amount,

in

See Fed. R. Civ. P. 55(b)(2).

damages
which

the

“ordinarily
defendant

requires
may

contest

an
the

. . . a hearing is not necessarily required if the

moving party submits uncontested, sworn affidavits sufficient to
establish the amount of damages.”

Marler, 2009 U.S. Dist. LEXIS

106147, at *5.
A hearing is not required in this case.
uncontested,
affidavits

sworn

affidavits

establish

that

to

Lackie

establish
owes

HICA has submitted
damages.

$15,188.20

in

HICA’s
unpaid

principal, $1,604.95 in accrued, unpaid interest, $1.21 in per
9

diem

interest,

and

$6.42

in

accrued,

(Decl. of Robin Zimmerman ¶¶ 2-3.)
amount

of

$1.13

has

accrued

unpaid

late

Prejudgment interest in the

since

HICA

amount of default on February 9, 2012.

calculated

credited

similar

affidavits

in

awarding

Other courts
damages.

e.g., Reinhart, 2012 U.S. Dist. LEXIS 127181, at *5-6.
is

liable

for

$15,188.20

in

unpaid

Lackie’s

(Id.)

HICA’s request for damages is well taken.
have

charges.

principal,

See,
Lackie

$1,604.95

in

accrued, unpaid interest, $1.21 in per diem interest, and $6.42
in accrued, unpaid late charges.

Lackie is also liable for

prejudgment interest continuing to accrue from February 9, 2012
until the date judgment is entered in the amount of $1.13 per
day.
V.

Conclusion

For the foregoing reasons, HICA’s Motion is GRANTED.
So ordered this 19th day of February, 2013.

s/ Samuel H. Mays, Jr.____________
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

10