Skenandore v. Fip, LLC

• Decision Date: 05 March 2019
• Docket Number: 1:18-cv-00388-MV-LF
• Parties: OLIVIA SKENANDORE, Plaintiff, v. FIP, LLC, Defendant.
• Court: U.S. District Court — District of New Mexico

OLIVIA SKENANDORE, Plaintiff, v. FIP, LLC, Defendant.

1:18-cv-00388-MV-LF

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

March 5, 2019

PROPOSED FINDINGS AND RECOMMENDED DISPOSITION ON MOTION FOR DEFAULT JUDGMENT

THIS MATTER comes before the Court on plaintiff Olivia Skenandore's Motion for Default Judgment, filed on July 31, 2018. Doc. 7. Pursuant to 28 U.S.C. § 636 and Rule 72(b) of the Federal Rules of Civil Procedure, the Honorable District Judge Martha Vázquez referred this matter to me for a recommended disposition. Doc. 12. Having reviewed the briefing and relevant case law, I find that Ms. Skenandore's motion is well-taken and recommend that the Court GRANT it, and that the Court enter a default judgment in favor of Ms. Skenandore as outlined below.

I. Background

Plaintiff Olivia Skenandore is a 70-year-old retired special education teacher who lives in Albuquerque, New Mexico. In April 2017, Ms. Skenandore searched for an internet loan to help her make her car payment and buy groceries. She secured a loan in the amount of $2100 from FIP, LLC ("FIP"), a Nevada limited liability company. FIP did not provide her with any documents when she entered into the loan. She thought the loan would be paid off after six months of $350 payments. FIP did not provide her with any documents pertaining to her loan until she requested them in early 2018. It was only then that she learned that the terms of the loan required her to repay $21,000 over the course of five years.

On April 25, 2018, Ms. Skenandore filed her complaint in this Court, seeking the following relief: (1) a declaratory judgment that her loan with FIP is void and uncollectable; (2) injunctive relief preventing FIP from attempting to collect on the loan and from reporting negative information about her to any credit reporting agency; (3) actual, statutory, and/or punitive damages; and (4) reasonable attorney's fees and costs. Doc. 1 at 8. Ms. Skenandore served FIP on May 15, 2018. Doc. 3 at 2. FIP's answer was therefore due by June 5, 2018. FED. R. CIV. P. 12(a)(1)(A)(i) (answer due 21 days after being served with the summons and complaint). The time to plead or otherwise respond to the complaint has not been extended by agreement of the parties or by order of the Court. To date, FIP has failed to appear, plead, or otherwise defend in this suit.

On June 13, 2018, Ms. Skenandore filed a Praecipe Requesting Clerk to Enter Default. Doc. 5. On June 14, this Court entered a Clerk's Entry of Default as to FIP. Doc. 6. On July 31, 2018, Ms. Skenandore filed this Motion for Default Judgment. Doc. 7.

II. Default Judgment

"When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." FED. R. CIV. P. 55(a). After the clerk has entered default, and a plaintiff applies to a court for default judgment, a district court may enter a default judgment. See FED. R. CIV. P. 55(b).

"[W]hen entry of a default judgment is sought against a party who has failed to plead or otherwise defend, the district court has an affirmative duty to look into its jurisdiction both overthe subject matter and the parties." Williams v. Life Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir. 1986). This allows the Court "to determine that it has the power to enter the default judgment." Id.; see also Venable v. Haislip, 721 F.2d 297, 300 (10th Cir. 1983) (holding that a default judgment is not appropriate if the court does not have jurisdiction over the subject matter and the defendant).

After determining it has jurisdiction over the subject matter and the defendant, a court must decide "whether the unchallenged facts create a legitimate basis for the entry of a judgment." Greenwich Ins. Co. v. Daniel Law Firm, No. 07-CV-02445-LTB-MJW, 2008 WL 793606, *1 (D. Colo. Mar. 22, 2008); see also Bixler v. Foster, 596 F.3d 751, 762 (10th Cir. 2010) ("Once default is entered, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.") (internal quotation marks and citation omitted). Upon a motion for default judgment, a district court accepts as true all well-pled allegations in a complaint, except those related to proving damages. See U.S. v. Craighead, 176 F. App'x 922, 925 (10th Cir. 2006) (unpublished). The Court must determine whether the allegations contained in plaintiff's complaint are sufficient to state a claim for relief. To state a claim for relief, the complaint must contain sufficient factual matter, accepted as true, to show that the claim is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). A claim is facially plausible when the plaintiff pleads facts that allow the court to reasonably infer that the defendant is liable for the alleged conduct. Id. A pleading that offers mere legal conclusions, or a recitation of the elements of a cause of action, is insufficient. Id. A trial court is vested with broad discretion in deciding whether to enter a default judgment. See Grandbouche v. Clancy, 825 F.2d 1463, 1468 (10th Cir. 1987).

A. Jurisdiction

The Court finds that it has the subject matter and personal jurisdiction required to enter a default judgment against FIP. Ms. Skenandore's complaint brings claims under the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), the federal Electronic Funds Transfer Act, 15 U.S.C. § 1693 et seq. ("EFTA"), the New Mexico Unfair Practices Act, N.M. STAT. ANN. § 57-12-1 et seq. ("UPA"), and for fraud. Thus, the Court has federal question subject matter jurisdiction under 28 U.S.C. § 1331. The Court has supplemental jurisdiction over the state law claims under 28 U.S.C. § 1367.

A district court does not have personal jurisdiction over a defendant if the defendant was not served. See Venable, 721 F.2d at 300. A plaintiff must serve a defendant within 90 days after the complaint is filed. See FED. R. CIV. P. 4(m). Ms. Skenandore timely served FIP: she filed her complaint on April 25, 2018 and served defendant on May 15, 2018. Docs. 1, 3. In addition, Ms. Skenandore properly served FIP under the federal rules, which allow service of a corporation "by delivering a copy of the summons and of the complaint to any agent authorized by law to receive service of process." FED. R. CIV. P. 4(h)(1)(B). Ms. Skenandore had a process server deliver the summons and complaint to Amber Rose Aparicio, the administrative assistant for FIP's registered agent ISI, Inc. at 321 W. Winnie Lane Ste. 104, Carson City, NV, 89703. Doc. 3 at 2.¹ Thus, Ms. Skenandore properly served FIP under Rule 4.

The Court may only exercise personal jurisdiction over a non-resident defendant "who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court islocated," FED. R. CIV. P. 4(k)(1)(A), and if the exercise of personal jurisdiction comports with the due process clause of the Fourteenth Amendment. United States v. Botefuhr, 309 F.3d 1263, 1271 (10th Cir. 2002). New Mexico's long-arm "statute extends the jurisdictional reach of New Mexico courts as far as constitutionally permissible." Tercero v. Roman Catholic Diocese, 2002-NMSC-018, ¶ 6, 132 N.M. 312, 316, 48 P.3d 50, 54 (2002). Consequently, the Court "need not conduct a statutory analysis apart from the due process analysis." Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir. 2011) (internal citation and quotation omitted).

The Due Process Clause requires the Court to conduct a two-step analysis of personal jurisdiction. First, the Court must examine whether the non-resident defendant has "minimum contacts" with the forum state. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Second, if the defendant has sufficient contacts, the Court asks whether exercising personal jurisdiction over the defendant is consistent with "traditional notions of fair play and substantial justice." Id.

The "minimum contacts" requirement of due process may be met by showing the existence of either general or specific jurisdiction. Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1532 (10th Cir. 1996); see also Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984).

General jurisdiction is based on an out-of-state defendant's "continuous and systematic" contacts with the forum state, . . . and does not require that the claim be related to those contacts. Specific jurisdiction, on the other hand, is premised on something of a quid pro quo: in exchange for "benefitting" from some purposive conduct directed at the forum state, a party is deemed to consent to the exercise of jurisdiction for claims related to those contacts.

Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1078 (10th Cir. 2008) (internal citations omitted). Thus, "[s]uch contacts may give rise to personal jurisdiction over a non-resident defendant either generally, for any lawsuit, or specifically, solely for lawsuits arising outof particular forum-related activities." Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir. 2011).

A court may assert specific jurisdiction "if the defendant has purposefully directed its activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal citations and quotations omitted). In contract cases, the Tenth Circuit has framed this inquiry as "whether the defendant 'purposefully availed' itself of the privilege of conducting activities or consummating a transaction in the forum state." Dudnikov, 514 F.3d at 1071. Regardless of how the question is framed, the defendant must have purposely established minimum contacts with the forum state such that it "should reasonably anticipate...