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United States v. Reeves

United States District Court, Second Circuit

August 23, 2013

UNITED STATES OF AMERICA, Plaintiff,
v.
KENNY REEVES, Defendant.

MEGGESTO, CROSSETT LAW FIRM, Gary J. Valerino, Esq., Syracuse, New York, Attorney for Plaintiff,

MEMORANDUM-DECISION AND ORDER

MAE A. D'AGOSTINO, District Judge.

I. INTRODUCTION

On May 31, 2012, plaintiff United States of America ("plaintiff") commenced the above captioned action alleging that defendant defaulted on a promissory note. Presently before the Court is plaintiff's motion for entry of a default judgment against defendant. (Dkt. No. 6). The Court has jurisdiction over this suit pursuant to 28 U.S.C. § 1345.

II. BACKGROUND

The Court has taken the facts set forth below from plaintiff's complaint and the Certificates of Indebtedness from the United States Department of Education executed on January 26, 2011.[1] Defendant Kenny Reeves is an individual and resident of New York. On September 25, 1978, defendant executed promissory note to secure a loan from Marine Midland Bank in Buffalo, New York. The loan was disbursed in one payment of $2, 000.00 on November 16, 1978 at 7.00 percent interest per annum. The loan obligation was guaranteed by New York State Higher Education Services Corporation ("NYSHES") and then reinsured by the Department of Education under Title IV-B of the Higher Education Act of 1965, 29 U.S.C. §§ 1071 et seq. The holder of the note, demanded payment according to the terms of the note, and credited $111.53 to the outstanding principal owed on the loan. On March 15, 1981, defendant defaulted on the loans and the holder filed a claim on the loan guarantee. Due to this default, NYHESC, as the guarantee agency, paid the claim amount of $1, 888.47 to the holder. NYHESC was subsequently reimbursed by the U.S. Department of Education under its reinsurance agreement. Pursuant to 34 C.F.R. § 682.410(b)(4), NYHESC attempted, unsuccessfully, to collect the debt from the defendant. Accordingly, on January 18, 1993, NYHESC assigned its right and titled to the loan to the U.S. Department of Education. The U.S. Department of Education remains the owner and holder of the note. The Certificate of Indebtedness provides that, as of January 14, 2011, defendant owes the following:

Principal $1, 888.47 Interest $2, 000.92 Total $3, 889.39

The Certificate also provides that, "[i]nterest accrues on the principal shown here at a rate of $0.36 per day".

On May 31, 2012, plaintiff filed the complaint (Dkt. No. 1) alleging that defendant owes a principal of $1, 888.47 and accrued interest of $2, 179.19. Plaintiff seeks the sum above plus prejudgment interest through the date of judgment and all administrative costs allowed by law and post-judgment interest pursuant to 28 U.S.C. § 1961.

III. DISCUSSION

A. Default Judgment

"Under Rule 55(b) default judgment shall be entered if a defendant has failed to plead or otherwise defend an action." Parise v. Riccelli Haulers, Inc., 672 F.Supp. 72, 74 (N.D.N.Y.1987). Fed.R.Civ.P. 55(b)(2) and Local Rule 55.2 set forth the procedural prerequisites plaintiffs must meet before a motion for default motion may be granted. Plaintiff must: (1) properly serve defendant with a summons and complaint (to which no response has been made); (2) obtain an entry of default; and (3) provide an affidavit setting forth the facts required by L.R. 55.2(a), including an affidavit of non-military service and evidence that defendant is neither an infant nor incompetent. See Fed.R.Civ.P. 55(b)(2); N.Y.N.D.L.R. 55.1 and 55.2.

As referenced above, plaintiff filed a complaint on May 31, 2012. On July 18, 2012, plaintiff filed the return of service with the Court. Plaintiff avers that defendant never answered or otherwise moved with respect to the complaint, thus on August 17, 2012, plaintiff requested a clerk's entry of default. Said default was entered on August 20, 2012. On September 21, 2012, plaintiff filed a notice of motion for default judgment pursuant to Fed.R.Civ.P. 55(b). Plaintiff has ...


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