United States District Court, S.D. New York
MEMORANDUM & ORDER
J. NATHAN, District Judge
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 to vacate the default judgment. For the
reasons provided below, the Court denies the motion.
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.
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.
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.
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.
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.
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.
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.
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.
The Court Construes the Motion as Pursuant to Rule
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 ...