Villarreal v. Nations Reliable Lending, LLC et al

Filing 43

DEFAULT JUDGMENT against Israell Ramirez, Jr. in total amount $246,000.; GRANTING 37 MOTION for Default Judgment against Israell Ramirez, Jr. (Signed by Chief Judge Lee H Rosenthal) Parties notified.(leddins, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
LAURA VILLAREAL,
Plaintiff,
VS.
NATIONS RELIABLE LENDING, LLC,
PLAZA HOME MORTGAGE, INC.,
AND MORTGAGE ELECTRONIC
REGISTRATION SERVICES, INC.,
Defendants.

§
§
§
§
§
§
§
§
§
§
§
§

January 28, 2019
David J. Bradley, Clerk

CIVIL ACTION NO. H-18-1839

ORDER GRANTING ENTRY OF DEFAULT
AND DEFAULT JUDGMENT
On September 24, 2018, Plaza Home Mortgage, Inc. filed a third-party complaint against
Israel Ramirez, Jr., seeking enforcement of its lien on the home located at 6111 Tyne Street,
Houston, Texas 77007. (Docket Entry No. 32). Plaza has moved for entry of default and for default
judgment against Ramirez. (Docket Entry Nos. 36, 37).
There are three steps to obtaining a default judgment: (1) default, (2) entry of default, and
(3) default judgment. N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). The Fifth
Circuit has explained:
“A default occurs when a defendant has failed to plead or otherwise respond to the
complaint within the time required by the Federal Rules. An entry of default is what
the clerk enters when the default is established by affidavit or otherwise. After
defendant’s default has been entered, plaintiff may apply for a judgment based on
such default. This is a default judgment.”
Id. (emphasis in original). The moving party is required to satisfy a three-step process, in which
default must precede entry of default and entry of default must precede default judgment. See Pipe

1

Wrap LLC v. P3 Indus. Techs., Inc., No. H-8-822, 2009 WL 2915921, at *2 (S.D. Tex. Aug. 31,
2009).
Under Federal Rule of Civil Procedure 55(a), a default must be entered when a party shows
“by affidavit or otherwise” that another party “against whom a judgment . . . is sought has failed to
plead or otherwise defend . . . .” FED. R. CIV. P. 55(a). Either the clerk or the court may enter the
default. Pipe Wrap, 2009 WL 2915921, at *2.
After default is entered, the plaintiff may move for default judgment under Rule 55(b):
“The court may conduct hearings or make referrals—preserving any federal statutory
right to a jury trial—when, to enter or effectuate judgment, it needs to: (A) conduct
an accounting; (B) determine the amount of damages; (C) establish the truth of any
allegation by evidence; or (D) investigate any other matter.”
FED. R. CIV. P. 55(b)(2). Local Rule 5.5 requires that motions for default judgment “be served on
the defendant-respondent by certified mail (return receipt requested).” S. D. TEX. L.R. 5.5.
Plaza asked the court to enter default against Ramirez on December 14, 2018. (Docket Entry
No. 36). Plaza argues that Ramirez defaulted because he did not respond within the allowed time.
(Id. at 1). The record shows that Ramirez was served on October 23, 2018, but he did not answer
or otherwise appear, as required by Rule 12(a)(1). (Docket Entry Nos. 35, 36-1, 36-2). The court
finds that Ramirez defaulted and enters default under Rule 55(a). (Docket Entry No. 36); Brown,
84 F.3d at 141.
Plaza also moved for default judgment on December 14, 2018. (Docket Entry No. 37). To
obtain a default judgment, Plaza must allege facts showing that: (1) a debt exists; (2) the debt is
secured by a lien created under Article XVI of the Texas Constitution; (3) Ramirez is in default
under the terms of the note and security agreement; and (4) Ramirez was properly served with notice
of default and notice of acceleration. See, e.g., Huston v. U.S. Bank Nat’l Ass’n, 988 F. Supp. 2d
2

732, 740 (S.D. Tex. 2013), aff’d, 583 F. App’x 306 (5th Cir. 2014).
The complaint alleges that in August 2014, Ramirez and Villarreal executed a Texas home
equity note for $246,000 payable to Nations Reliable Lending, LLC and secured by the Tyne Street
property. (Docket Entry No. 32 at ¶ 5; Docket Entry No. 37 at 3; see Docket Entry No. 1-1 at
287–89). According to the complaint, Ramirez and Villarreal also entered into a Texas home equity
security instrument, which was recorded in Harris County. (Docket Entry No. 32 at ¶ 6; see Docket
Entry No. 38-1 at 11–23; Docket Entry No. 38-1 at 27). The complaint alleges that Plaza owns the
note and security instrument, and that Ramirez failed to make payments as required under the
agreements’ terms. (Docket Entry No. 32 at ¶¶ 6–7, 9; see Docket Entry No. 38-1 at 25–26). The
complaint alleges that Ramirez received a notice of default and an intent to accelerate in January
2017, but he failed to cure the default. (Docket Entry No. 32 at ¶ 9; see Docket Entry No. 38-1 at
29–30, 34. The record evidence supports these allegations, entitling Plaza to default judgment. Pipe
Wrap, 2009 WL 2915921, at *4–*5.
The record shows that Plaza may enforce the lien and foreclose on Ramirez’s interest in the
Tyne Street property. Huston, 988 F. Supp. 2d at 741. The court grants Plaza’s motion for entry
of default judgment. (Docket Entry No. 37). Plaza may separately move for attorney’s fees and
costs under Rule 54(d).

SIGNED on January 28, 2019, at Houston, Texas.
______________________________________
Lee H. Rosenthal
Chief United States District Judge

3