Jones v. Marquis Properties, LLC

212 F. Supp. 3d 1010, 2016 U.S. Dist. LEXIS 186436, 2016 WL 8253894
CourtDistrict Court, D. Colorado
DecidedJuly 20, 2016
DocketCivil Action No. 15-cv-1281-WJM-MEH
StatusPublished
Cited by10 cases

This text of 212 F. Supp. 3d 1010 (Jones v. Marquis Properties, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jones v. Marquis Properties, LLC, 212 F. Supp. 3d 1010, 2016 U.S. Dist. LEXIS 186436, 2016 WL 8253894 (D. Colo. 2016).

Opinion

ORDER DIRECTING ENTRY OF DEFAULT JUDGMENT

William J. Martinez, United States District Judge

Plaintiffs Kristei R. Jones and Laura J. Jones (“the Joneses”), Gary L. Adler and' Martha N. Adler (“the Adlers”), and Marjorie A. Anderson, in her own behalf and as trustee of the Marjorie A. Anderson Trust (together, “Anderson”) (all plaintiffs collectively, “Plaintiffs”) sue Marquis Properties, LLC (“Marquis”), Rick Clatfel-ter (“Clatfelter”), and Chad Deucher (“Deucher”) (all defendants collectively, “Defendants”) for breach of contract and various forms of fraud. (ECF No. 1.) Currently before the Court are two motions: Plaintiffs’ Motion for Partial Summary Judgment against Marquis and Deucher (ECF No. 32) and Plaintiffs’ Motion for Default Judgment against Marquis and Deucher (ECF No. 37). For the reasons stated below, the Court grants the Motion for Default Judgment' and therefore denies the summary judgment motion as moot.

I. BACKGROUND

Plaintiffs filed this action on June 16, 2015, claiming that Defendants conned them out of large sums of money. (ECF No. 1.) Defendants allegedly represented themselves to be real estate developers that would issue promissory notes to private investors, secure the notes with residential real properties (for investor safety), use the proceeds of the notes to fix and flip (or fix and rent) those properties, and then pay off the notes—usually in one year—at a favorable interest rate. (Id. ¶ 18.) Defendants would also enter into “joint ventures” with investors, which were essentially the same business deal just described except that the investor and Defendants would, in lieu of interest, split the profits upon resale of the property. (Id. ¶ 25.) Although Defendants at times may have actually attempted to use note proceeds for flx-and-flip projects (see id. ¶¶ 35-36), Plaintiffs allege that Defendants were mostly running a Ponzi scheme (id. ¶ 1).

Marquis and Deucher originally appeared in this proceeding through counsel (ECF No. 19) while Clatfelter appeared pro se (ECF No. 9). Marquis’s and Deucher’s counsel moved to withdraw a few [1015]*1015months later, which motion was eventually granted, effective February 3, 2016. (ECF Nos. 23, 30.) Absent counsel, Deucher w as then deemed pro se and Marquis (as a business entity that cannot represent itself) technically went into default. Clatfel-ter declared bankruptcy, thus staying proceedings in this case against him. (See ECF No. 32 at 13 n.4.)

Plaintiffs eventually moved for summary judgment on certain of their causes of action against Marquis and Deucher. (ECF No. 32.) Neither defendant filed any response. On May 13, 2016, Plaintiffs filed for default judgment against Marquis and Deucher. (ECF No. 37.) On June 20, 2016, this Court ordered Marquis and Deucher to show cause by July 1, 2016, why judgment should not enter against them given their failure to defend. (ECF No. 38.) The Court directed Plaintiffs to mail that order to the last known address(es) of Marquis and Deucher (id.), and the Court itself mailed the order to the addresses on file (ECF Nos. 39-40). Deucher and Marquis filed nothing on or before July 1, 2016, and have since filed nothing. Plaintiffs state that they have received no response in their attempts to communicate with Deucher, who is Marquis’s sole member, since mid-January 2016. (ECF No. 37 at 2; ECF No. 32-13 ¶ 3.)

II. LEGAL STANDARD

Default must enter against a party who fails to appear or otherwise defend a lawsuit. Fed. R. Civ. P. 55(a). Pursuant to Rule 55(b)(1), default judgment must be entered by the Clerk of Court if the claim is for “a sum certain”; in all other cases, “the party must apply to the court for a default judgment.” Fed. R. Civ. P. 55(b)(2). “[Djefault judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to .his rights. The default judgment remedy serves as such a protection.” In re Rains, 946 F.2d 731, 732-33 (10th Cir. 1991) (internal quotation marks and citation omitted).

However, “a party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the ‘sound judicial discretion’ of the court.” Greenwich Ins. Co. v. Daniel Law Firm, 2008 WL 793606, at *2 (D. Colo. Mar. 22, 2008) (internal quotation marks omitted). Before granting a motion for default judgment, the Court must take several steps. First, the Court must ensure that it has personal jurisdiction over the defaulting defendant and subject matter jurisdiction over the action. See Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir. 1986). Next, the Court should consider whether the well-pleaded allegations of fact—which are admitted by the defendant upon default—support a judgment on the claims against the defaulting defendant. See Fed. Fruit & Produce Co. v. Red Tomato, Inc., 2009 WL 765872, at *3 (D. Colo. Mar. 20, 2009) (“Even after entry of default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate basis for the entry of a judgment.”). “In determining whether a claim for relief has been established, the well-pleaded facts of the complaint are deemed true.” Id. (citing Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983)).1

[1016]*1016III. ANALYSIS

A. Subject Matter Jurisdiction

This Court has subject matter jurisdiction under 28 U.S.C. § 1381 given Plaintiffs’ assertion of a cause of action under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961 et seq. (See ECF No. 1 ¶¶ 70-78.)

B. Personal Jurisdiction

For jurisdictional purposes, Marquis and Deucher are Utah residents given that Deucher is Marquis’s sole member, and Deucher is a Utah resident. (ECF No. 1 ¶¶ 7, 9; ECF No. 32-13 ¶3.) See also Siloam Springs Hotel, L.L.C. v. Century Sur. Co., 781 F.3d 1233, 1237 (10th Cir. 2015) (LLC citizenship judged by the citizenship of its members). For the remainder of this order, unless otherwise noted, “Marquis” refers to Deucher and Marquis collectively.

In its answer (ECF No. 14), Marquis does not challenge personal jurisdiction, and Marquis has not challenged personal jurisdiction by motion. Marquis has there-' fore waived any personal jurisdiction defense, making personal jurisdiction appropriate. See Fed. R.

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212 F. Supp. 3d 1010, 2016 U.S. Dist. LEXIS 186436, 2016 WL 8253894, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-marquis-properties-llc-cod-2016.