CGI FINANCE, INC. Plaintiff,
DAVID A. LUCE, et al. Defendants.
REPORT AND RECOMMENDATION
TIMOTHY J. SULLIVAN, Magistrate Judge.
This Report and Recommendation addresses the Motion for Default Judgment ("Motion") filed by Plaintiff, CGI Finance, Inc. ("CGI"), against Defendants, David A. Luce and Andrew D. Neilan (collectively "Defendants"). ECF No. 9. Defendants have not filed a response, and the time for doing so has passed. See Loc. R. 105.2.a. On July 2, 2013, in accordance with 28 U.S.C. § 636 and Local Rule 301, Judge Quarles referred this case to me for a report and recommendation on CGI's Motion for Default Judgment. ECF No. 11. I find that a hearing is unnecessary in this case. See Fed.R.Civ.P. 55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that the Plaintiff's Motion for Default Judgment be GRANTED.
I. FACTUAL AND PROCEDURAL HISTORY
A. Factual Background
On July 2, 2003, Defendants purchased a 2000 Intrepid 356 CC 35'6" powerboat named the "Take Over" ("the Vessel") and, in doing so, financed their purchase with American Bank by a Marine Note and Security Agreement ("the Note") in the principal amount of $145, 059.00 with interest at the rate of 5% per annum. ECF No. 9-3. Under the terms of the Note, Defendants were to make 240 monthly payments of $957.60 beginning on August 1, 2003. Id. In order to secure this Note, Defendants executed and delivered to American Bank a "First Preferred Mortgage of Vessel." ECF No. 9-4. Pursuant to 46 U.S.C. § 31322, American Bank obtained a "preferred mortgage" on the Vessel.
On December 28, 2007, American Bank assigned all of its interest in the Vessel, including the Marine Note and Security Agreement and the Preferred Mortgage, to CGI. ECF Nos. 9-5 & 9-6. Defendants defaulted under the terms of the agreement by failing to make their payments. ECF No. 9-2. On October 4, 2011, Defendants executed a Loan Modification Agreement with CGI that reduced the monthly payments for twelve months and also re-amortized the loan based on the then-current principal balance. ECF No. 9-7.
On June 1, 2012, after Defendants defaulted under the terms of the Loan Modification Agreement, CGI gave notice to Defendants of its intention to repossess the Vessel. ECF No. 9-8. After no response from Defendants, CGI repossessed the Vessel on June 26, 2012. ECF No. 9-2, ¶ 12.
On July 3, 2012, CGI provided Defendants with notice of the repossession, as well as notice of the $104, 753.97 balance due under the Loan Modification Agreement. ECF No. 9-9. This amount included principal, interest, late charges, and repossession costs. Id. On August 21, 2012, CGI sold the Vessel at auction for $42, 001.00. Id. By letter dated August 29, 2012, CGI provided Defendants with an accounting of the sale of the Vessel under the terms of the agreement between the parties. ECF No. 9-11. The letter indicated that the total remaining deficiency balance was $72, 491.02. Id. Adding per diem interest through August 27, 2012, the total amount due was $73, 096.77. Id. On or about September 12, 2012, CGI received a prorated insurance premium refund in the amount of $713.00. ECF No. 9-12. This refund offset the Defendants' delinquency, reducing the total deficiency to $71, 778.02. ECF No. 9-2.
As of June 25, 2013, CGI alleged that it is entitled to $75, 357.09. This amount is comprised of the deficiency balance of $71, 778.02 plus interest in the amount of $3, 579.07 that accrued at $9.83 per diem (364 days) since the Vessel's repossession on June 26, 2012. ECF No. 9-2, ¶ 18.
B. Procedural History
On January 14, 2013, CGI filed a Complaint, in Admiralty, alleging a breach of contract against Defendants. ECF No. 1; see 46 U.S.C. § 31325(b)(2)(A). CGI attached the following to the Complaint: a copy of the Note, (ECF No. 1-4); the mortgage document (ECF No. 1-5); the loan assignment document from American Bank to CGI (ECF No. 1-6); the mortgage assignment document from American Bank to CGI (ECF No. 1-7); the Loan Modification Agreement (ECF No. 1-8); CGI's pre-repossession notice to the Defendants (ECF No. 1-9); CGI's post-repossession notice to the Defendants (ECF No. 1-10); and an accounting spreadsheet (ECF No.1-10). In the Complaint, CGI sought judgment against the Defendants "in the amount of $73, 096.77, plus interest accruing at the per diem rate of $9.93 as of August 29, 2012, post-judgment interest, attorneys' fees, costs, and expenses." ECF No. 1 at 5.
On January 19, 2013, both Defendants were properly personally served by private process server. ECF Nos. 4, 5. Defendants did not file an Answer. On May 14, 2013, Judge Quarles entered an Order directing CGI to file a motion for entry of default by the Clerk and a motion for default judgment or, alternatively, to provide the Court with a report as to why such motions would be inappropriate. ECF No. 6. CGI failed to do so. On June 19, 2013, Judge Quarles entered another Order granting CGI an additional ten days to respond to the May 14, 2013 Order, or the case would be dismissed. ECF No. 7. On June 25, 2013, CGI filed its Motion for Clerk's Entry of Default. ECF No. 8. On June 27, 2013, CGI filed this Motion for Default Judgment with attachments. On July 2, 2013, the Clerk entered an Order of Default as to the Defendants. ECF No. 10.
II. LEGAL ANALYSIS
A. Standard for Entry of ...