United States District Court, N.D. New York
MEMORANDUM-DECISION AND ORDER
Lawrence E. Kahn, U.S. District Judge
the Court is plaintiff Nationstar Mortgage LLC's motion
for default judgment, seeking the foreclosure and sale of
real property owned by defendant Ronald Mohr. Dkt. No. 12
(“Motion”); see also Dkt. No. 13
(“Attorney Affidavit”). For the following
reasons, Nationstar's Motion is denied and its complaint
is dismissed for lack of subject matter jurisdiction.
case, Nationstar seeks a judgment for unpaid amounts on
Mohr's home mortgage, along with the foreclosure and sale
of the property in order to satisfy this debt. Dkt. No. 1
(“Complaint”) ¶¶ 1, 9-12. Nationstar
claims that this Court has subject matter jurisdiction based
on diversity of the parties' citizenships. Id.
¶ 7. Specifically, the Complaint alleges that Nationstar
is a citizen of Delaware (by way of a tortuous chain of
ownership), that Mohr is a citizen of Indiana, and that
Mortgage Electronic Registration Systems, Inc.
(“MERS”)-which is named as a defendant here due
to its holding a subordinate mortgage on the property-is a
citizen of Rhode Island. Id. ¶¶ 2-4.
Importantly, the Complaint notes that MERS “is named
solely as nominee for Advanced Financial Services,
Inc.” and that “[a]ll substantive interest in the
mortgage remains in the hand of Advanced Financial
Services.” Id. ¶ 4.
and MERS failed to appear in this action, and the Clerk of
the Court entered their default on September 28, 2016. Dkt.
No. 10. Nationstar then moved for default judgment. Mot.
Pursuant to the Local Rules, Nationstar's counsel
supplied an Attorney Affidavit with the Motion, which
included a copy of the Complaint, a proposed judgment, the
entry of default, calculations of damages and fees, and sworn
statements attesting that the defendants were properly served
but nonetheless failed to appear. Attorney Aff. ¶¶
3-4, 7, 9; Dkt. Nos. 13-1 to -8. But the Attorney Affidavit
did not include sworn statements that Mohr 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).
Additionally, Nationstar's request for attorney's
fees states that because counsel plans to charge Nationstar
“a flat fee for foreclosure work, individual time
sheets are not maintained.” Dkt. No. 13-5 (“Fees
Affirmation”) ¶ 4.
Subject Matter Jurisdiction
matter jurisdiction is a fundamental predicate to judgment in
the federal courts. “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 must show the basis for jurisdiction on the face
of its pleading, and-if challenged-must prove 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 at 108.
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 189-90. “[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),
aff'd, 873 F.2d 38 (2d Cir. 1989)).
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, ”
and no part has been paid; and (5) “[t]he disbursements
sought to be taxed have been made in the action or will
necessarily be made or incurred.” L.R. 55.2(a).