United States District Court, N.D. New York
OVERTON, RUSSELL, DOERR &LINDA L. DONOVAN, ESQ. DONOVAN,
LLP Attorneys for Plaintiff
MEMORANDUM-DECISION AND ORDER
D'Agostino, U.S. District Judge
October 5, 2015, the United States of America
("Plaintiff") commenced this action alleging that
Marcia Marshall ("Defendant") defaulted on a
promissory note. See Dkt. No. 1 at 2. On July 18,
2016, the Court granted Plaintiff's motion for default
judgment with respect to liability, but denied the demanded
relief with leave to reapply for damages. See Dkt.
No. 11 at 5-6. Currently before the Court is Plaintiff's
motion for entry of damages. See Dkt. No. 15.
Court has taken the facts set forth below from
Plaintiff's complaint, the Certificate of Indebtedness
from the United States Department of Education executed on
August 26, 2016 (the "Certificate of
Indebtedness"), an affidavit submitted by
Plaintiff's counsel, and attached exhibits. Defendant is
a resident of Chenango County, New York. See Dkt.
No. 1 at 1. Defendant executed a master promissory note on or
about August 4, 2002 for a loan under the William D. Ford
Federal Direct Loan Program. See Id. at 2; Dkt. No.
1-1 at 1; Dkt. No. 15 at 3.
Certificate of Indebtedness shows that the following loan
disbursements were made: $4, 060.00 on October 8, 2002 to
January 9, 2003; $2, 665.00 on October 8, 2002 to January 9,
2003; $4, 060.00 on August 27, 2003 to January 20, 2004; $2,
665.00 on August 27, 2003 to January 20, 2004; $2, 665.00 on
August 17, 2004 to January 14, 2005; and $4, 060.00 on August
27, 2004 to January 14, 2005, all of which were subject to a
variable rate of interest established annually. Dkt. No. 15
at 3. Defendant defaulted on the promissory note on July 25,
2009. Id. After the default, pursuant to 34 C.F.R.
§ 685.202(b), $2, 938.19 in unpaid interest was
capitalized and added to the principal balance. See
id. According to the Certificate of Indebtedness,
Defendant owed $20, 102.84 in principal and $881.33 in
interest as of August 26, 2016. Id. Currently,
interest accrues on the principal at a rate of 2.65% with a
daily rate of $1.47 through June 30, 2017. Id.
October 26, 2015, Plaintiff served Defendant with the
complaint. See Dkt. No. 4. Plaintiff filed a request
for entry of default on November 24, 2015. See Dkt.
No. 6. On the same day, the Clerk of the Court entered
default against Defendant pursuant to Rule 55(a) of the
Federal Rules of Civil Procedure. See Dkt. No. 8;
Fed.R.Civ.P. 55(a). On December 2, 2016, Plaintiff filed a
motion for default judgment pursuant to Rule 55(b) of the
Federal Rules of Civil Procedure. See Dkt. No. 10.
18, 2016, this Court granted Plaintiff's motion for
default judgment with respect to liability, but denied
Plaintiff's motion with respect to damages because
Plaintiff failed to meet its burden to establish a basis for
the damages claimed. See Dkt. No. 11 at 5-6. While
Plaintiff did submit the master promissory note, Plaintiff
failed to satisfy Local Rule 55.2, which requires the
interest rate submitted to be calculated at a per diem rate
as well as the per annum rate. See Id. at 4; see
also Local Rules N.D.N.Y. 55.2(a). Additionally, the
Court found that Plaintiff could not recover server and
travel fees for serving Defendant with the summons and
complaint without proving that these costs were actually
incurred. See Dkt. No. 11 at 5.
order to establish its entitlement to the damages claimed,
Plaintiff was directed to submit a certificate of
indebtedness, a full promissory note, disbursement history,
demand for payment, evidence of the date of default, and
evidence of the amount of the loan applied for and actually
received. See Id. On August 12, 2016, Plaintiff
submitted a letter request for an additional 30 days to
obtain the necessary documentation to establish its claimed
damages. See Dkt. No. 13. On September 7, 2016,
Plaintiff submitted an attorney Affidavit of Amount Due and
the Certificate of Indebtedness. See Dkt. No. 15.
a default occurs, the well-pleaded factual allegations set
forth in a complaint relating to liability are deemed
true." Gesualdi v. Seacost Petroleum Prod.,
Inc., 97 F.Supp.3d 87, 95 (E.D.N.Y. 2015) (citing
Greyhound Exhibitgroup, Inc. v. E.L. U.L. Realty
Corp., 973 F.2d 155, 158 (2d Cir. 1992) (other citations
omitted)). "While a default judgment constitutes an
admission of liability, the quantum of damages remains to be
established by proof unless the amount is liquidated or
susceptible [to] mathematical computation." Flaks v.
Koegel, 504 F.2d 702, 707 (2d Cir. 1974) (citations
omitted); see also Joseph v. HDMJ Rest., Inc., 970
F.Supp.2d 131, 149 (E.D.N.Y. 2013) (citations omitted).
"[E]ven upon default, a court may not rubber-stamp the
non-defaulting party's damages calculation, but rather
must ensure that there is a basis for the damages that are
sought." Overcash v. United Abstract Group,
Inc., 549 F.Supp.2d 193, 196 (N.D.N.Y. 2008) (citing
Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183
F.3d 151, 155 (2d Cir. 1999)). "The burden is on the
plaintiff to establish its entitlement to recovery."
Bravado Int'l Grp. Merch. Servs., Inc. v. Ninna,
Inc., 655 F.Supp.2d 177, 189 (E.D.N.Y. 2009) (citation
omitted). "While 'the court must ensure that there
is a basis for the damages specified in a default judgment,
it may, but need not, make the determination through a
hearing.'" Id. at 190 (quotation omitted).
was directed to submit specific documentary evidence
sufficient to "ascertain the amount of damages with
reasonable certainty." Alcantara, 183 F.3d at
155 (citation omitted). "[A] document containing both
the borrower's signature and the amount of the loan
applied for and disbursed" may serve as a basis for an
award of damages. See United States v. Linn, No.
10-CV-5289, 2011 WL 2848208, *3 (E.D.N.Y. July 14, 2011). In
addition, damages have been awarded "relying solely on
Certificates of Indebtedness." United States v.
Reeves, No. 5:12-CV-0886, 2013 WL 4508721, *2 (N.D.N.Y.
Aug. 23, 2013) (citing United States v. Zdenek, No.
10-CV-5566, 2011 WL 6754100, *2 (E.D.N.Y. Dec. 22, 2011)).
has provided a Certificate of Indebtedness signed under
penalty of perjury by a loan analyst. See Dkt. No.
15 at 3. As discussed above, the Certificate of Indebtedness
sets forth the loan disbursements and the amounts due on the
loan as of August 26, 2016. As of that date, Defendant owed
$20, 102.84 in principal and $881.33 in interest, for a total
debt of $20, 984.17. See Id. Currently, interest
accrues on the principal at a rate of 2.65% with a daily rate
of $1.47 through June 30, 2017. See Id. As such, an
additional $270.48 in interest has ...