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
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