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Lehman Brothers Holdings, Inc v. Valley Vista Mortgage

July 8, 2011

LEHMAN BROTHERS HOLDINGS, INC.,
PLAINTIFF,
v.
VALLEY VISTA MORTGAGE, INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Anthony J. BattagliaU.S. District Judge

ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

Pending is Plaintiff's Motion for Default Judgment, filed May 3, 2011. (Doc. No. 13.)

Factual Background

In 2003 and 2004, Lehman Brothers Bank, FSB ("LBB") purchased a number of residential mortgage loans from Valley Vista Mortgage, Inc. ("Defendant") pursuant to one or more written contracts.*fn1 LBB assigned its rights under those contracts to Lehman Brothers Holdings, Inc. ("Plaintiff"). Plaintiff claims that Defendant breached the contracts and the warranties and covenants set forth in the contracts.

The contracts specify that Plaintiff may demand that Defendant repurchase, and that Valley shall repurchase, mortgage loans that become Early Payment Defaults. Certain loans purchased by Plaintiff became Early Payment Defaults and Plaintiff demanded that Defendant repurchase those loans. Defendant failed to repurchase the loans or otherwise comply with its obligations under the Agreement and Seller's Guide.

Procedural History

Plaintiff filed this action on February 1, 2011. The Complaint alleges two causes of action: (1) Breach of Contract, and (2) Breach of Express Warranty. Defendant never appeared in this case and the Clerk entered default against Defendant on March 18, 2011. Plaintiff filed this Motion for Default Judgment on May 3, 2011. Plaintiff seeks default judgment in order to remedy Defendant's breach of its contractual repurchase obligations.

Plaintiff seeks default judgment in the amount of $2,343,980.84 including pre-judgment interest as well as post-judgment intereston the total amount at the current applicable rate pursuant to 28 U.S.C. § 1961 accruing from the date of entry of judgment.

Analysis

There are seven factors to consider when weighing whether the entry of default judg-

(1) the possibility of prejudice to plaintiff,

(2) the merits of plaintiff's substantive claim,

(3) the sufficiency of the complaint,

(4) the sum of money at stake in ...


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