Financial Pacific Leasing, Inc. v. Total Wellness Medical Center LLC

CourtDistrict Court, D. Maryland
DecidedAugust 26, 2020
Docket8:19-cv-00981
StatusUnknown

This text of Financial Pacific Leasing, Inc. v. Total Wellness Medical Center LLC (Financial Pacific Leasing, Inc. v. Total Wellness Medical Center LLC) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Financial Pacific Leasing, Inc. v. Total Wellness Medical Center LLC, (D. Md. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

FINANCIAL PACIFIC LEASING, INC., *

Plaintiff, * Case No. TDC-19-0981 v. *

TOTAL WELLNESS MEDICAL CENTER * LLC, et al., * Defendants. * * * * * *

REPORT AND RECOMMENDATION

This Report and Recommendation addresses Plaintiff Financial Pacific Leasing, Inc.’s (“Financial Pacific”) “Motion to Enter Default Judgment Against Defendant Total Wellness Medical Center LLC” (“Motion”) (ECF No. 10). Defendants Total Wellness Medical Center LLC (“Total Wellness”) and Miriam Martin (“Martin”) (collectively, “Defendants”) did not respond to the Motion and the time for doing so has expired.1 See Loc. R. 105.2. On March 5, 2020, in accordance with 28 U.S.C. § 636 and Local Rule 301, Judge Chuang referred this case to me for a report and recommendation on Plaintiff’s Motion. (ECF No. 11.) I find that a hearing is unnecessary. See Fed. R. Civ. P. 55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that Plaintiff’s Motion be granted in part and denied in part.

1 Financial Pacific does not seek the entry of default judgment against Martin (the sole member of Total Wellness) at this time. (ECF No. 10 at 1 n.1) (explaining that Martin filed a voluntary petition for bankruptcy protection on September 12, 2019, triggering the automatic stay pursuant to 11 U.S.C. § 362 as to Plaintiff’s claims against Martin). I. FACTUAL AND PROCEDURAL HISTORY

On April 1, 2019, Plaintiff filed its Complaint against Defendants. (ECF No. 1.) The Complaint contains three counts: Count 1, Breach of Contract (against Total Wellness); Count 2, Breach of Contract (against Martin); and Count 3, Replevin (against Total Wellness). Plaintiff served its Complaint on Defendants (see ECF Nos. 5 & 6) but Defendants did not file an answer or responsive pleading within the requisite time period. Plaintiff moved for entry of default on July 18, 2019. (ECF No. 7.) The Clerk’s Entry of Default was entered the same day. (ECF No. 8.) Notice of Default was mailed to Defendants. (ECF No. 9.) Plaintiff filed the Motion on January 7, 2020.2 II. LEGAL ANALYSIS

A. Standard for Entry of Default Judgment In determining whether to award a default judgment, the Court accepts as true the well- pleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001); United States ex rel. Durrett-Sheppard Steel Co. v. SEF Stainless Steel, Inc., No. RDB-11-2410, 2012 WL 2446151, at *1 (D. Md. June 26, 2012). Nonetheless, the Court must consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012) (citing Ryan, 253 F.3d at 790). Although the Fourth Circuit has a “strong policy that cases be decided on the merits,” United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment “is appropriate when the adversary process has been halted because of an essentially unresponsive party.” S.E.C.

2 On June 5, 2020, the Court directed Plaintiff to supplement its Motion with additional information about its claimed damages and the attorney’s fees and costs it incurred. (ECF No. 12.) Plaintiff complied with the Court’s directive and filed the supplemental information at ECF No. 13. v. Lawbaugh, 359 F. Supp. 2d 418, 421 (D. Md. 2005). If the Court determines that liability is established, the Court must then determine the appropriate amount of damages. CGI Finance, Inc., v. Johnson, No. ELH-12-1985, 2013 WL 1192353, at *1 (D. Md. March 21, 2013). The Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. Durrett-Sheppard Steel Co., 2012 WL 2446151, at *1.

Rule 55 of the Federal Rules of Civil Procedure provides that “[i]f, after entry of default, the Plaintiff’s Complaint does not specify a ‘sum certain’ amount of damages, the court may enter a default judgment against the defendant pursuant to Fed. R. Civ. P. 55(b)(2).” A plaintiff’s assertion of a sum in a complaint does not make the sum “certain” unless the plaintiff claims liquidated damages; otherwise, the complaint must be supported by affidavit or documentary evidence. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012). Rule 55(b)(2) provides that “the court may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.” The Court is not required to conduct an evidentiary hearing to determine damages, however; it may rely instead on

affidavits or documentary evidence in the record to determine the appropriate sum. See, e.g., Mongue v. Portofino Ristorante, 751 F. Supp. 2d 789, 795 (D. Md. 2010). B. Liability

The factual allegations pleaded in Plaintiff’s Complaint are common to each count. In early 2018, Plaintiff and Defendants executed an Equipment Finance Agreement (“Agreement”).3 (ECF No. 1 ¶ 7.) The Agreement (ECF No. 1-1) provided secured financing for Total Wellness’s purchase of one 105-7027-000 Tempsure System (the “Equipment”). (Id.) Under the Agreement,

3 Martin signed the Agreement on behalf of Total Wellness on January 7, 2018, and Financial Pacific signed the Agreement on February 1, 2018. Total Wellness granted Plaintiff a first priority security interest in the Equipment to secure Total Wellness’s obligations under the Agreement. (ECF Nos. 1 ¶ 8 & 1-1 at 2, § 2.) Plaintiff perfected its security interest in the Equipment by filing a UCC Financing Statement with the Maryland Department of Assessments and Taxation on February 1, 2018. (ECF Nos. 1 ¶ 8 & 13-2 at 2.) Plaintiff filed a UCC Financing Statement Amendment on March 21, 2019. (ECF No. 13-2 at 3-

4.) The Agreement required Total Wellness to make monthly payments to Plaintiff for the financing of the Equipment according to a payment schedule. (ECF No. 1-1 at 2, 6.) The payment schedule required Total Wellness to make an advance payment of $50.00, two consecutive monthly payments of $50.00, and 60 consecutive monthly payments of $2,732.64. (Id. at 6.) The Agreement contains a Personal Guaranty executed by Martin, Total Wellness’s sole member, whereby she “unconditionally and irrevocably guarantee [Total Wellness’s] timely payment and performance of all obligations” under the Agreement. (ECF No. 1-1 at 2.) The Agreement provides that the failure of Total Wellness “to pay any amount due under

[the Agreement] when due” would cause it to be in default. (ECF No. 1-1 at 3, § 11.) The failure of a guarantor to perform its obligations would also cause Total Wellness to be in default.

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Bluebook (online)
Financial Pacific Leasing, Inc. v. Total Wellness Medical Center LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/financial-pacific-leasing-inc-v-total-wellness-medical-center-llc-mdd-2020.