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United States v. Stock Asylum LLC

United States District Court, D. Colorado

February 13, 2015



WILLIAM J. MARTÍNEZ, District Judge.

Plaintiff United States of America ("Plaintiff" or "Government") brings this action against Defendants Stock Asylum LLC and Ronald Rovtar ("Defendants") arising out of a loan that was guaranteed in part by the Small Business Administration ("SBA"). (Compl. (ECF No. 1).)

This matter is before the Court on the Government's Motion for Entry of Default Judgment ("Motion"). (ECF No. 12.) For the reasons set forth below, the Motion is granted.


The Government filed this action on July 16, 2014 alleging that Defendants defaulted on a loan guaranteed by the SBA and seeking judgment in its favor for the unpaid debt. (Compl. pp. 2-3.) On August 1, 2014, Defendants were both served with a copy of the Complaint and Summons, which triggered an answer date of August 18, 2014. (ECF Nos. 7-8.) Defendants did not file any responsive papers or otherwise appear to defend against the Government's claim.

The Government then moved for entry of default. (ECF No. 15.) The Clerk entered default against both Defendants on September 8, 2014. (ECF No. 16.) The Government filed the instant Motion on August 27, 2014 (ECF No. 12), and no responsive papers were filed by Defendants. As the date for responding to the Motion as long since passed, the Motion is now ripe for consideration.


Pursuant to Rule 55(b)(1), default judgment must be entered by the clerk of court if the claim is for "a sum certain"; in all other cases, "the party must apply to the court for a default judgment." Fed.R.Civ.P. 55(b)(2). "[D]efault judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights. The default judgment remedy serves as such a protection." In re Rains, 946 F.2d 731, 732-33 (10th Cir. 1991) (internal quotation marks and citation omitted). Further, "a party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the sound judicial discretion' of the court." Greenwich Ins. Co. v. Daniel Law Firm, 2008 WL 793606, at *2 (D. Colo. Mar. 22, 2008) (internal citation omitted).


Before granting a motion for default judgment, the Court must take several steps. First, the Court must ensure that it has personal jurisdiction over the defaulting Defendants and subject matter jurisdiction over the action. See Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir. 1986). Next, the Court should consider whether the well-pleaded allegations of fact-which are admitted by Defendants upon default-support a judgment on the claims against the defaulting Defendants. See Fed. Fruit & Produce Co. v. Red Tomato, Inc., 2009 WL 765872, *3 (D. Colo. March 20, 2009) ("Even after entry of default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate basis for the entry of a judgment.") (citations omitted). "In determining whether a claim for relief has been established, the well-pleaded facts of the complaint are deemed true." Id. (citing Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983)). Once the Court is satisfied that default judgment should be entered, it has the discretion to hold a hearing to determine the amount of damages. See Fed. R. Civ. Pro. 55(b)(2). Generally, a damages hearing is not needed when the damages requested are for a sum certain. See United States v. Craighead, 176 F.Appx. 922, 925 (10th Cir. 2006).

A. Jurisdiction

The Court finds that jurisdiction exists in this case pursuant to 28 U.S.C. § 1345 because the United States of America is a party to this action. The Court further finds that it has personal jurisdiction over Defendants, as Stock Asylum is a Colorado limited liability corporation with its principal place of business in Boulder, Colorado and Defendant Rovtar resides in Boulder, Colorado. (Compl. ¶¶ 3-4.) Accordingly, the Court is satisfied that it has both subject matter jurisdiction over the case, and personal jurisdiction over the Defendants.

B. Plaintiff's Claims

Plaintiff alleges that it is entitled to recover a debt from Defendants pursuant to the Federal Debt Collection Procedure Act, 28 U.S.C. §§ 3001, et seq. ("FDCPA"). (Compl. p. 1.) The FDCPA provides the "civil procedures for the United States... to recover a judgment on a debt." 28 U.S.C. § 3001(a)(1). "Debt" is "an amount that is owing to the United States on account of a fee, duty, lease, rent, service, sale of real or personal property, overpayment, fine, assessment, penalty, restitution, damages, interest, tax, bail bond forfeiture, ...

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