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Guardian Life Insurance Co. of America v. Premier Wealth Group, LLC

United States District Court, S.D. New York

March 16, 2017

Guardian Life Insurance Company of America, Plaintiff,
Premier Wealth Group, LLC & Stuart Ryan Jaramillo, Defendants.


          ALISON J. NATHAN, District Judge

         On October 2, 2015, the Court granted default judgment in this case against Defendant Stuart Ryan Jaramillo and his solely-owned limited liability company, Defendant Premier Wealth Group, LLC. Before the Court is Jaramillo's June 27, 2016 motion[1] to vacate the default judgment. For the reasons provided below, the Court denies the motion.

         I. Background

         Plaintiff, the Guardian Life Insurance Company of America ("Guardian"), is a New York corporation that sells insurance, retirement services, investment products, and employee benefits programs. Compl. ¶¶ 2, 9 (Dkt No. 1). From approximately 2003 to 2011, Defendants Stuart Jaramillo ("Jaramillo") and Jaramillo's solely-owned limited liability corporation, Premier Wealth Group, LLC ("Premier Wealth"), worked with Guardian at one of Guardian's New Mexico agencies. Compl. ¶¶ 4-5, 10-12. During this time period, Jaramillo worked as a "Career Development Manager, " a "General Agent, " and a "Career Development Supervisor, " while Premier Wealth Group was a "Corporate General Agent." Compl. ¶¶ 10-13. Defendants' responsibilities included soliciting applications for Guardian's products, maintaining existing insurance policies, and providing assistance to existing and new policyholders. Compl. ¶ 13.

         In connection with this working relationship, Defendants entered into various contractual agreements with Guardian. Compl. ¶ 14. In these agreements, Guardian agreed to loan Defendants money for the operating costs of the New Mexico agency. Compl. ¶ 15. In 2011, Jaramillo terminated his relationship with Guardian with his loan obligations still outstanding. Compl. ¶¶ 20-23. As of September 30, 2012, Defendants allegedly owed Guardian over $600, 000. Compl. ¶ 26.

         When Defendants failed to repay their loan obligations, Guardian sued. On December 13, 2012, Guardian filed a complaint alleging, inter alia, breach of contract. Dkt No. 1. Premier Wealth was served with the summons and complaint on December 19, 2012, and Jaramillo waived service on January 28, 2013. Dkt Nos. 5, 8. An attorney appeared on behalf of the defendants and, after receiving an extension of time, Defendants filed an answer to the complaint on March 22, 2013. Dkt Nos. 3-4, 12-13, 17. On April 3, 2013, Defendants informed the Court that Jaramillo had filed a petition for relief under Title 11 of the Bankruptcy Code. Dkt Nos. 19, 24. The Court accordingly stayed the case pending resolution of the bankruptcy case. Dkt No. 27.

         Around the same time, Defendants' attorney filed a motion to withdraw. Dkt No. 21. The motion stated that Defendants no longer had financial ability to pay for their attorney's services. Id. at 2. It also explicitly stated that Defendants understood that "[Premier Wealth] will be unrepresented, without the ability to defend itself in this mater, if [the attorney] is permitted to withdraw." Id. The Court granted the motion to withdraw, and Defendants at that point became unrepresented. Dkt No. 29.

         On April 7, 2015, the Court received a letter from Guardian stating that Jaramillo's bankruptcy petition had been dismissed. Dkt No. 34; see also In re Jaramillo, 526 B.R. 404 (D.N.M. 2015). Guardian therefore requested that the case be restored to the active case docket. Dkt No. 34. The Court granted the motion and scheduled an initial pretrial conference. Dkt No. 35. This order once again warned Premier Wealth that it needed to have an attorney file a notice of appearance, as "limited liability companies must be represented by counsel." Id. at 2-3. On May 19, 2015, the Court received a letter from Jaramillo in which he acknowledged that he understood that there was a lawsuit against him but nonetheless stated that "the outcome [wa]s out of [his] hands" and that he would not "defend the lawsuit" due to financial constraints. Dkt No. 36. In anticipation of the initial pretrial conference, Guardian filed a letter and proposed case management plan. Dkt No. 38. But in light of Jaramillo's letter and Premier Wealth's continued failure to obtain counsel, the Court adjourned the initial pretrial conference and required the Defendants to file a response to Guardian's proposed case management plan by June 15, 2015. Dkt No. 39. No response was filed, so the Court gave Guardian until July 31, 2015 to file a motion for default judgment. Dkt No. 42.

         On July 29, 2015, the Clerk of the Court issued a certificate of default. Dkt No. 43. On August 6, 2015, the Court issued an order to show cause why a default judgment should not be entered, and the Court scheduled a hearing. Dkt No. 44. Defendants did not appear at the default judgment hearing. Accordingly, on October 2, 2015, the Court entered a default judgment in the sum of $673, 659.74 plus post-judgment interest against Defendants. Dkt No. 49.

         On June 27, 2016, Jaramillo filed a motion to set aside the default judgment. Dkt Nos. 50-53. Guardian opposed the motion. Dkt No. 56. The Court now resolves the motion.

         II. Discussion

         As explained below, the Court denies the motion to set aside the default judgment. The Court cannot set aside the default judgment against Premier Wealth because it is unrepresented, and a solely-owned limited liability companies must have counsel to litigate before this Court. With respect to the individual defendant, Stuart Jaramillo, the Court concludes that setting aside the judgment in this case is not warranted because Jaramillo's default was deliberate and because he has failed to assert a meritorious defense.

         A. The Court Construes the Motion as Pursuant to Rule 60(b)

         As an initial matter, Guardian argues that the Court should deny Jaramillo's motion because it "is improperly brought pursuant to Fed.R.Civ.P. 55(c)." Opp. at 1 (Dkt ...

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