United States District Court, W.D. New York
ORDER DECISION AND ORDER
MICHAEL A. TELESCA, United States District Judge.
by counsel, Corey Hill (“Hill” or
“Plaintiff”) instituted this action against CACH,
LLC (“CACH” or “Defendant”) alleging
violations of the Fair Debt Collection Practices Act, 15
U.S.C. § 1692 et seq. (“FDCPA”) and
New York General Business Law (“NYGBL”) §
349. This Court has jurisdiction under 15 U.S.C. §
1692k(d) and 28 U.S.C. § 1331. Supplemental jurisdiction
exists for Plaintiff's state law claims pursuant to 28
U.S.C. § 1367.
Factual Background and Procedural History
is a natural person residing in the County of Monroe, State
of New York. Plaintiff alleges that CACH is a limited
liability company organized under the laws of the State of
Delaware, authorized to do business in New York State, and
engaged in the business of collecting debts in New York State
and elsewhere. Plaintiff alleges that CACH is a debt
collector as defined by FDCPA, 15 U.S.C. § 1692a(6), and
she is an individual consumer pursuant to the FDCPA, i.e., a
natural person allegedly obligated to pay any debt.
March of 2016, CACH instituted a collection action against
Plaintiff in Supreme Court of the State of New York, Monroe
County, captioned CACH, LLC v. Corey Hill, Index No.
2016/2727 (“the Collection Action”).
Defendant's complaint in the Collection Action alleged
that it purchased and was assigned a credit card account on
which Plaintiff originally had been liable for $5, 875.90 to
an unnamed original creditor; this creditor's rights were
assigned to Defendant. Plaintiff retained an attorney to
defend her in the Collection Action, and incurred liability
for attorney's fees in the amount of $1, 000.00, as well
as court costs in the amount of$140.00. Plaintiff filed a
motion for summary judgment in the Collection Action, based
on Defendant's lack of standing and inability to prove
that it was the owner of the alleged credit card account on
which the Collection Action was based. Plaintiff argued that
because Defendant, as a debt buyer, could not show that it
purchased and was assigned a credit card account in the
amount of $5, 875.90 on which Plaintiff was purportedly
liable, Defendant had no basis on which to attempt to collect
any such debt from Plaintiff through the Collection Action or
otherwise. The Monroe County Supreme Court granted summary
judgment in Plaintiff's favor by an order entered in the
Monroe County Clerk's Office on January 30, 2017.
then filed her Complaint in this action on February 16, 2017.
The Clerk's Office issued a summons the same day. The
Summons was returned executed on February 23, 2017. The
Affidavit of Service indicated that CACH was served with the
Summons and Complaint on February 17, 2017. CACH's Answer
accordingly was due no later than March 10,
CACH has not filed an Answer or otherwise appeared in this
action. For the reasons discussed herein, the Court directs
the Clerk of Court to enter a default against CACH.
entry of defaults and default judgments is governed by
Federal Rule of Civil Procedure 55 (“Rule 55”).
“The procedural steps contemplated by the Federal Rules
of Civil Procedure following a defendant's failure to
plead or defend as required by the Rules begin with the entry
of a default by the clerk upon a plaintiff's
request” pursuant to Rule 55(a). Meehan v.
Snow, 652 F.2d 274, 276 (2d Cir. 1981) (citing
Fed.R.Civ.P. 55(a) (“When a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend as provided by these rules and that fact
is made to appear by affidavit or otherwise, the clerk shall
enter the party's default.”)). The Second Circuit
has endorsed a broad interpretation of Rule 55(a)'s
phrase “otherwise defend, ” holding that an entry
of default is proper whenever the defendant fails to engage
in litigation, regardless of the stage at which such failure
occurs. City of N.Y. v. Mickalis Pawn Shop, LLC, 645
F.3d 114, 129-31 (2d Cir. 2011). “Entry of a default is
a prerequisite to entry of a default judgment under Rule
55(b).” Systems Indus., Inc. v. Han, 105
F.R.D. 72, 74 (E.D. Pa. 1985) (citing 6 J. Moore, W. Taggart,
& J. Wicker, Moore's Federal Practice ¶
55.02 (2d ed. 1983); 10 C. Wright, A. Miller, & M.
Kane, Federal Practice and Procedure: Civil 2d
§ 2682, at 406 (1983)), vacated on other
grounds, 1986 WL 10551 (E.D. Pa. Sept. 15, 1986).
Second Circuit has explained, “[a]lthough Rule 55(a)
contemplates that entry of default is a ministerial step to
be performed by the clerk of court, ” City of N.Y.
v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir.
2011) (citing Pinaud v. Cnty. of Suffolk, 52 F.3d
1139, 1152 n. 11 (2d Cir. 1995)), “a district judge
also possesses the inherent power to enter a default, ”
id. (citing Beller & Keller v. Tyler,
120 F.3d 21, 22 n. 1 (2d Cir. 1997)); see also Allstate
Prop. & Cas. Ins. Co. v. Haslup, No.
2:10-CV-0191-WCO, 2012 WL 12953465, at *6 (N.D.Ga. Jan. 12,
2012) (“‘The fact that Rule 55(a) gives the clerk
authority to enter a default is not a limitation on the power
of the court to do so.'”) (quoting Charles Alan
Wright, Arthur R. Miller, and Mary Kay Kane, 10A Federal
Practice and Procedure § 2682, at 19 (3d ed.
1998)); Singh v. Jackson, No. 86 CIV. 2668(MJL),
1986 WL 12514, at *1-2 (S.D.N.Y. Oct. 31, 1986) (“This
Court's inherent power to manage its caseload, however,
provides the authority to sua sponte enter a default judgment
against a litigant who has failed to prosecute his case with
reasonable diligence and who has not complied with the
Court's rules of procedure.”) (citing Flaksa v.
Little River Marine Construction Co., Inc., 389 F.2d
885, 887 (5th Cir.), cert. den. 392 U.S. 928
(1968)). Whether a district judge “should perform the
ministerial function of entering default that is assigned to
the clerk by the text of Rule 55(a) is vested within the
judge's sound discretion.” Liberty Mut. Ins.
Co. v. Fleet Force, Inc., No. CV-09-S-773-NW, 2013 WL
3357167, at *2 (N.D. Ala. July 1, 2013) (citing Commodity
Futures Trading Comm'n v. Harrison, No.
8:13-CV-00327-GRA, 2013 WL 812054, at * 1 (D.S.C. Mar. 5,
2013) (holding that “it is within a district
court's ‘sound discretion' in deciding whether
to direct that entry of default be made as to a party”)
(further citations omitted)).
Court finds that it is a proper exercise of discretion to
direct the Clerk of Court to enter a default against CACH.
Since being served with process in February of 2017, CACH has
taken no action whatever with respect to this lawsuit. CACH
has not filed an answer, and thus has failed to
“plead” in response to the Complaint within the
meaning of Rule 55(a). See Fed.R.Civ.P. 7(a)
(listing the types of pleadings, including an answer, that
are allowed). CACH has also failed to “otherwise
defend” for purposes of Rule 55(a), because it has not
filed an “attack[ ] on the service, or a motion[ ] to
dismiss, or for better particulars, [or] the like, which may
prevent default without presently pleading to the
merits.” Bass v. Hoagland, 172 F.2d 205, 210
(5th Cir. 1949).
because CACH has been properly served but has failed to
answer or otherwise defend this case, entry of default is
warranted, notwithstanding Plaintiff's failure to move
for such relief. See, e.g., Singapore
Tong Teik PTE Ltd. v. Coppola, No. 04-CV-3440 FB RLM,
2007 WL 2375796, at *4 (E.D.N.Y. Aug. 17, 2007); Trustees
of Local 813 I.B.T. Ins. Trust v. Chinatown Carting
Corp., No. 1:06-CV-05967-NGG, 2008 WL 5111108, at *3
(E.D.N.Y. Dec. 4, 2008) (entering default under Rule 55(a)
against a defendant who failed to answer or appear even
though the plaintiff moved only for summary judgment);
Singh v. Jackson, No. 86 CIV. 2668(MJL), 1986 WL
12514, at *2 (S.D.N.Y. Oct. 31, 1986); Systems Indus.,
Inc. v. Han, 105 F.R.D. at 74 & n.1 (entering
default under Rule 55(a) even though the “plaintiff has
not filed any application with the Clerk for entry of a
default” but had instead filed only a motion seeking
default judgment under Rule 55(b)).
Court further finds that entry of a default judgment is
appropriate. Once a defendant is in default, the factual
allegations of the complaint, except those relating to the
amount of damages, will be taken as true. Singh,
1986 WL 12514, at *2 (citing C. Wright & A. Miller,
Federal Practice & Procedure: Civil 2d §
2688 at 444 (2d Ed. 1983)). The Court finds that the
allegations in Plaintiff's complaint, if taken as true,
state claims for violations of the FDCPA and GBL § 349.