United States District Court, N.D. New York
U.S. BANK TRUST, N.A., as Trustee for LSF9 Master Participation Trust, Plaintiff,
OWEN MONROE, individually and as surviving spouse of Phyllis Monroe, Defendant.
MEMORANDUM-DECISION AND ORDER
LAWRENCE E. KAHN, U.S. DISTRICT JUDGE
before the Court is plaintiff U.S. Bank Trust, N.A.'s
motion for default judgment, seeking the foreclosure and sale
of real property owned by defendant Owen Monroe. Dkt. No. 12
(“Motion”); see also Dkt. No. 13
(“Attorney Affidavit”). For the following
reasons, U.S. Bank's Motion is denied and the complaint
is dismissed for lack of subject matter jurisdiction.
December 14, 2015, U.S. Bank-through its attorneys, Gross
Polowy, LLC-filed its complaint in this action, alleging
nonpayment of a mortgage by Monroe. Dkt. No. 1
(“Complaint”) ¶ 11. U.S. Bank seeks a
judgment for the outstanding amount under the loan, along
with the foreclosure and sale of Monroe's property to
satisfy this debt. Id. ¶¶ 1, 11-13.
Bank asserts subject matter jurisdiction based on diversity
of citizenship, claiming that it is a citizen of Delaware
while Monroe is a citizen of New York. Id.
¶¶ 2-3, 6. In support of its own citizenship, U.S.
Bank alleges that it “is a national association with
its principal place of business [in] . . . Wilmington,
DE.” Id. ¶ 2. U.S. Bank brings this case
on behalf of the LSF9 Master Participation Trust, for which
it serves as trustee. Id. ¶ 10; see also
id. ¶ 2 (“Plaintiff is the owner and holder
of the subject Note and Mortgage or has been delegated
authority to institute this Mortgage foreclosure action by
the owner and holder of the subject Note and
Mortgage.”); id. Schedule A (noting assignment
to the LSF9 Master Participation Trust, and then to U.S. Bank
as its trustee, in endorsements to the note). The Complaint
does not contain any details concerning U.S. Bank's role
as trustee or the powers it has over the trust property
(including the mortgage here).
failed to appear in this action, and on February 2, 2016, the
Clerk of the Court noted his default. Dkt. No. 8. On March
17, 2016, U.S. Bank moved for default judgment. Mot. The
Motion was supported by an Attorney Affidavit, which included
a copy of the Complaint, a proposed judgment, the entry of
default, calculations of damages and fees, and sworn
statements attesting that Monroe was properly served but
nonetheless failed to appear. Attorney Aff. ¶¶ 3,
7, 9; Dkt. Nos. 13-1 to -9. This affidavit did not include
sworn statements that Monroe is not an infant or otherwise
incompetent, that he is not in the military service, that the
amount sought “is justly due and owing, ”
“that no part has been paid, ” and that the
“disbursements sought to be taxed” either have
been or necessarily will be made. L.R. 55.2(a).
Subject Matter Jurisdiction
fundamental predicate to judgment in the federal courts is
the existence of subject matter jurisdiction.
“Dismissal of a case for lack of subject matter
jurisdiction . . . is proper ‘when the district court
lacks the statutory or constitutional power to adjudicate
it.'” Ford v. D.C. 37 Union Local 1549,
579 F.3d 187, 188 (2d Cir. 2009) (per curiam) (quoting
Makarova v. United States, 201 F.3d 110, 113 (2d
Cir. 2000)). A lack of subject matter jurisdiction cannot be
waived, and may be raised by motion or sua sponte at any
time. E.g., Transatlantic Marine Claims Agency,
Inc. v. Ace Shipping Corp., 109 F.3d 105, 107 (2d Cir.
1997); see also Fed.R.Civ.P. 12(h)(3) (“If the
court determines at any time that it lacks subject-matter
jurisdiction, the court must dismiss the action.”). The
party asserting subject matter jurisdiction carries the
burden of proving its existence by a preponderance of the
evidence. E.g., Makarova, 201 F.3d at 113;
Augienello v. FDIC, 310 F.Supp.2d 582, 587-88
(S.D.N.Y. 2004). This is true even on a motion for default
judgment, since the principle that a default deems the
well-pleaded allegations of the complaint to be admitted is
inapplicable when a court doubts the existence of subject
matter jurisdiction. Transatlantic Marine, 109 F.3d
Rule of Civil Procedure 55 provides a two-step process that
the Court must follow before it may enter a default judgment
against a defendant.” Elec. Creations Corp. v.
Gigahertz, Inc., No. 12-CV-1423, 2013 WL 3229125, at *3
(N.D.N.Y. June 25, 2013) (quoting Robertson v. Doe,
No. 05-CV-7046, 2008 WL 2519894, at *3 (S.D.N.Y. June 19,
2008)). “First, under Rule 55(a), when a party fails to
‘plead or otherwise defend . . . the clerk must enter
the party's default.'” Id. (alteration
in original) (quoting Robertson, 2008 WL 2519894, at
*3). Second, under Federal Rule of Civil Procedure 55(b)(2),
“the party seeking default judgment is required to
present its application for entry of judgment to the
court.” Id. (quoting Robertson, 2008
WL 2519894, at *3).
a default is entered, the defendant is deemed to have
admitted all of the well-pleaded factual allegations in the
complaint pertaining to liability.” Bravado
Int'l Grp. Merch. Servs., Inc. v. Ninna, Inc., 655
F.Supp.2d 177, 188 (E.D.N.Y. 2009) (citing Greyhound
Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d
155, 158 (2d Cir. 1992)). “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 of mathematical computation.”
Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974);
accord, e.g., Bravado Int'l, 655
F.Supp.2d at 190. “[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.” United States v.
Hill, No. 12-CV-1413, 2013 WL 474535, at *1 (N.D.N.Y.
Feb. 7, 2013) (alteration in original) (quoting Overcash
v. United Abstract Grp., Inc., 549 F.Supp.2d 193, 196
(N.D.N.Y. 2008)). “The burden is on the plaintiff to
establish its entitlement to recovery.” Bravado
Int'l, 655 F.Supp.2d at 189. “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 (quoting Fustok v. Conticommodity Servs.,
Inc., 122 F.R.D. 151, 156 (S.D.N.Y. 1988)).
Local Rule 55.2(b), the moving party must submit with its
motion for default judgment: (1) a clerk's certificate of
entry of default, (2) a proposed form of default judgment,
(3) a copy of the pleading to which no response has been
made, and (4) an affidavit. L.R. 55.2(b). The affidavit must
set forth that: (1) the party against whom judgment is sought
is not an infant, incompetent, or in military service; (2)
the party against whom judgment is sought “has
defaulted in appearance in the action”; (3) service was
properly effected under Federal Rule of Civil Procedure 4;
(4) the amount sought “is justly due and owing, ...