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Coastal Commerce Bank v. SM Energy LLC

United States District Court, W.D. Louisiana, Lafayette Division

September 18, 2017

Coastal Commerce Bank
v.
SM Energy LLC et al

          Judge Rebecca F. Doherty

          REPORT AND RECOMMENDATION

          CAROL B. WHITEHURST, UNITED STATES MAGISTRATE JUDGE.

         Before the Court on referral from the District Judge is a Motion For Default Judgment pursuant to Federal Rule of Civil Procedure 55(b)(2) filed by Plaintiff, Coastal Commerce Bank (“Coastal”), against the in personam defendant John A. Lancon (“Lancon”) [Rec. Doc. 46].

         Background

         Plaintiff filed this suit in order to obtain payment on two Promissory Notes: (1) a Promissory Note (“Note 1”) made payable to Coastal by SM Energy LLC (“Energy”) as “Borrower” in the amount of $5, 000, 082.81 to evidence a loan made by Coastal to Energy issued on or about February 13, 2015; R. 46-1, Exh. A. and (2) a Promissory Note [“Note 2”] made payable to Coastal by Energy as “Borrower” in the amount of $350, 000.00 to evidence a loan made by Coastal to Energy issued on or about June 30, 2015. R. 46-1, Exh. B. On March 31, 2014, Lancon had executed and entered into a commercial continuing guaranty agreement, whereby Lancon was personally obligated to satisfy the obligations of Energy, inclusive of the amounts due under the Promissory Notes, in all sums due to Coastal. R. 46, Exh. C.

         Despite Plaintiff's amicable demands, Energy and then Lancon, failed or refused to pay the installments of principal and interest scheduled under the Promissory Notes when due. Plaintiff contends such failure constitutes a default under the Promissory Notes and an Event of Default under the Mortgages. R. 46-1, p. 2.

         Plaintiff instituted this lawsuit by verified Complaint on September 12, 2016. R. 1. The Complaint was personally served on September 28, 2016. R. 22-2, p. 1. The summons provided: “Within 21 days after service of this summons on you (not counting the day you received it) ... you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure.” Id. No answer or motion was filed by Lancon within this time period. On January 26, 2017, Plaintiff filed a Motion for Entry of Default against Lancon, R. 22, and the Clerk of Court filed a “Notice Of Entry Of Default” into the record against Lancon on January 27, 2017, R. 24.

         In support of its Motion for Entry of Default R. 22, Plaintiff attached the affidavit of Joseph P. Briggett, counsel for Plaintiff. Briggett states: (1) Coastal retained the law firm of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard to recover the amounts due from Lancon; (2) Lancon is not an incompetent, an infant, or in military services; (3) No answer or other responsive pleading has been filed in this matter by Lancon: and (4) despite amicable demand and service of the Complaint; and Lancon has failed to file a proper and timely answer to the demand presented in the complaint in this matter. R. 22-1.

         Default Standard

         Under Federal Rule of Civil Procedure 55(b), the court may enter a default against a party if it fails to plead or otherwise respond to the plaintiff's complaint within the required time period. A plaintiff who seeks a default judgment must first petition the court for the entry of default and show “by affidavit or otherwise” that the defendant “has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). Once default has been entered, the plaintiff's well-pleaded factual allegations are deemed admitted. Meyer v. Bayles, 559 Fed.Appx. 312, at *1 (5th Cir. 2014) (citing Nishimatsu Const. Co., Ltd. v. Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir.1975)). At the same time, the defaulting defendant “is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Nishimatsu, 515 F.2d at 1206.

         Rule 55(b) grants a court discretion to convene an evidentiary hearing on the issue of damages. Fed.R.Civ.P. 55(b)(2)(B). Where “the amount claimed is a liquidated sum or one capable of mathematical calculation, ” a hearing is not necessary. United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir.1979). “The court may rely on detailed affidavits or documentary evidence, supplemented by the judge's personal knowledge, to evaluate the proposed sum.” Richardson v. Salvation Army, Southern Territory, USA, 161 F.3d 7 (5th Cir.1998). The Court finds the damages here are readily capable of mathematical calculation from plaintiff's affidavits, thus making an evidentiary hearing unnecessary.

         Analysis

         Plaintiff has attached the Affidavit of Trent Oliver, Vice President of Commercial Lending for Coastal, in support of its entitlement to the relief sought. Oliver states that as of May 18, 2017, the aggregate outstanding balance of principal and accrued and unpaid interest owned under the Promissory Notes referenced above was $5, 587, 564.85, broken down as follows:

Note

Outstanding Principal

Interest & Fees

Total

Note 1

$4, 826, 431.24

$175, 419.66

$5, 001, 850.90

Note 2

$349, 000.00

$19, 301.16

$368, 301.16

$5, 370, 152.06


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