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Eaton v. Broken Spoke Cycles, Inc.

United States District Court, D. Colorado

May 18, 2015

SHEENA EATON, Plaintiff,
v.
BROKEN SPOKE CYCLES, INC., Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

WILLIAM J. MARTÍNEZ, District Judge.

Plaintiff Sheena Eaton initiated this action on October 23, 2014, and brings claims for violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA") and the Colorado Consumer Credit Code, C.R.S. § 5-1-101 et seq. (ECF No. 1.) Plaintiff alleges that she purchased a vehicle from Defendant Broken Spoke Cycles, Inc., which provided her with an amortization schedule and a sales contract. (Id. at 2.) However, Plaintiff alleges that the amortization schedule and sales contract did not comply with the terms of TILA or the Colorado Consumer Credit Code. (Id. at 2-4.) This matter is before the Court on Plaintiff's Motion for Default Judgment ("Motion"). (ECF No. 12.) For the reasons set forth below, the Motion is granted in part and denied in part.

I. ANALYSIS

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 deemed admitted by a defendant in default, support a judgment on the claims against the defaulting defendants. See Fed. Fruit & Produce Co. v. Red Tomato, Inc., 2009 WL 765872, at *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.P. 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). In this matter, the Court will therefore determine: (1) whether the Court's jurisdiction over the Defendant and claims is proper; (2) whether the well-pleaded allegations of fact support a judgment on the claims against Defendant; and (3) the damages to which Plaintiff is entitled, if any. The Court discusses each issue below.

A. The Court's Jurisdiction

The Court must first determine whether it has personal jurisdiction over Defendant, and subject matter jurisdiction over this action. The Court finds that it has proper subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because Plaintiff's TILA claim arises under federal law. The Court also finds it has personal jurisdiction over the Defendant because Defendant is located in Colorado, and negotiated and entered into a contract with a Colorado resident. (ECF Nos. 1 & 8.) Lastly, pursuant to 28 U.S.C. § 1367, the Court finds that it has supplemental jurisdiction over Plaintiff's related claims brought under Colorado law. Therefore, the Court has jurisdiction over all claims and parties in this action.

B. Plaintiff's Claims

Plaintiff asserts that Defendant violated both TILA and the Colorado Consumer Credit Code. (ECF No. 1.) Treating all well-pled facts in the Plaintiff's Complaint as true, the Court finds that Plaintiff has alleged a sufficient basis on which to impose liability on Defendant. The Court discusses both claims below.

1. TILA Violation

Plaintiff asserts that Defendant violated the following TILA provision:

For each consumer credit transaction other than under an open end credit plan, the creditor shall disclose each of the following items, to the extent applicable:
...
(5) The sum of the amount financed and the finance charge, which shall be termed the ...

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