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TCF Inventory Finance, Inc. v. Marker Oil Co., Inc.

United States District Court, E.D. California

April 5, 2018

TCF INVENTORY FINANCE, INC., Plaintiff,
v.
MARKER OIL COMPANY, INC. and BILLY LEON MARKER, JR., Defendants.

          FINDINGS AND RECOMMENDATIONS

          DEBORAH BARNES UNITED STATES MAGISTRATE JUDGE.

         This matter came before the undersigned on November 17, 2017, pursuant to Local Rule 302(c)(19), for hearing of plaintiff's motion to vacate the Clerk's entry of default judgment and for entry default judgment by the court. (ECF No. 28.) On behalf of the plaintiff, attorney Jeffrey Brown appeared in person and attorney William Bay appeared telephonically. Defendant Billy Leon Marker, Jr., appeared in person on his own behalf. No. appearance was made on behalf of Marker Oil Company, Inc. At that time oral argument was heard and the motion was taken under submission.

         Having considered all written materials submitted with respect to the motion, and after hearing oral argument, the undersigned recommends that plaintiff's motion be granted in part and denied in part as explained below.

         BACKGROUND

         Plaintiff commenced this action on August 23, 2017, by filing a complaint and paying the required filing fee. (ECF No. 1.) Therein, plaintiff alleges that on June 21, 2017, plaintiff and defendant Marker Oil Company, Inc., (“Marker Oil”), entered into an Inventory Security Agreement (the “Security Agreement”), whereby plaintiff agreed to provide financing for Marker Oil's inventory of RVs, ATVs, and watercraft. (Compl. (ECF No. 1) at 3.[1]) That same day plaintiff and defendant Billy Leon Marker, Jr., (“Billy Marker”), entered into a Guaranty, whereby defendant Billy Marker “unconditionally guaranteed the prompt and punctual payment of all obligations of” defendant Marker Oil to plaintiff. (Id. at 4.) Thereafter, defendants defaulted. (Id. at 4-7.) Based on these allegations, the complaint alleges causes of action for breach of contract, possession of collateral, and injunctive relief. (Id. at 7-12.)

         On August 29, 2017, plaintiff filed proof of service. (ECF No. 13.) On September 1, 2017, the assigned District Judge granted plaintiff's motion for a temporary restraining order. (ECF No. 14.) On September 11, 2017, the assigned District Judge issued a preliminary injunction and an order for a writ of possession. (ECF Nos. 18 & 19.) On September 19, 2017, plaintiff filed a request for entry of default, and on September 20, 2017, the Clerk of the Court entered defendants' default. (ECF Nos. 21 & 22.)

         On September 26, 2017, plaintiff filed a motion for default judgment. (ECF No. 23.) The Clerk of the Court entered default judgment on September 29, 2017. (ECF No. 25.) On October 5, 2017, plaintiff filed the pending motion seeking to vacate the Clerk's entry of default judgment and enter default judgment by the court. (ECF No. 26.) As noted above, at the November 17, 2017 hearing of plaintiff's motion, defendant Billy Marker appeared in person on his own behalf. (ECF No. 28.)

         Accordingly, on November 27, 2017, the undersigned issued an order directing the parties to file supplemental briefing. (ECF No. 29.) Plaintiff filed its supplemental brief on December 15, 2017. (ECF No. 30.) On January 4, 2018, attorney Thomas Gifford appeared on behalf of both defendant Billy Marker and defendant Marker Oil, and filed defendants' supplemental brief. (ECF No. 32.) Plaintiff filed a response on January 5, 2018. (ECF No. 33.) Defendants filed a further response on January 14, 2018. (ECF No. 34.) And plaintiff filed a sur-reply on January 18, 2018.[2] (ECF No. 35.)

         ANALYSIS

         I. Vacating the Clerk's Entry of Default Judgment

         Plaintiff argues that the Clerk's entry of default judgment should be set aside because the judgment did not address all of the relief requested by plaintiff. (Pl.'s Mot. (ECF No. 26) at 2-3.) In this regard, although the Clerk's entry of default judgment awarded plaintiff $1, 071, 192.69 in principal, the judgment failed to address plaintiff's request for prejudgment interest, attorney's fees and expenses, surety bond cost, injunctive relief, and the award of inventory sought by plaintiff's motion for default judgment. (Id.)

         Rule 55(b) of the Federal Rules of Civil Procedure provides that the “court . . . may set aside a final default judgment under Rule 60(b).” Rule 60(b) provides that “the court may relieve a party or its legal representative from a final judgment, ” for reasons including mistake, inadvertence, where the judgment is void, and any other reason that justifies relief.

         Here, the Clerk's September 29, 2017 default judgment should be vacated, as the Clerk may only enter default judgment “for a sum certain or a sum that can be made certain by computation.” Fed.R.Civ.P. 55(b)(1). As noted above, plaintiff's motion for default judgment sought more than monetary compensation. See GAG Enterprises, Inc. v. Rayford, 312 F.R.D. 230, 234 (D. D.C. 2015) (“the Clerk of the Court cannot enter a default judgment in this case because the Clerk does not have discretion to award attorneys' fees”); Western World Ins. Co., Inc. v. Czech, 275 F.R.D. 59, 62 (D. Mass. 2011) (“Because the Clerk erroneously entered the Default Judgment which could only have been entered in this action by the Court pursuant to Fed.R.Civ.P. 55(b)(2), the Court will vacate and void the Default Judgment pursuant to Fed.R.Civ.P. 60(b).”); Northland Ins. Co. v. Cailu Title Corp., 204 F.R.D. 327, 329 (W.D. Mich. 2000) (“This is an action for declaratory relief; no sum certain has been requested. Under the circumstances, Northland's request that the Clerk enter a default judgment in any form may not be granted.”); Combs v. Coal & Mineral Management Services, Inc., 105 F.R.D. 472, 474 (D. D.C. 1984) (“The original complaint in this action, seeking injunctive and declaratory as well as monetary relief, was clearly outside the scope of the clerk's Rule 55 authority.”).

         Accordingly, plaintiff's motion to vacate the September 29, 2017 Clerk's entry of ...


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