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Leto v. World Recovery Service, LLC

United States District Court, W.D. North Carolina, Charlotte Division

April 27, 2015

GARY R. LETO, Plaintiff,
v.
WORLD RECOVERY SERVICE, LLC, Defendant.

ORDER AND DEFAULT JUDGMENT

MAX O. COGBURN, Jr., District Judge.

THIS MATTER is before the Court on plaintiff Gary Leto's, ("plaintiff") Motion for Default Judgment pursuant to Fed.R.Civ.P. 55(b)(2) (Doc. No. 8). For the reasons set forth below, plaintiff's motion will be granted.

FINDINGS AND CONCLUSIONS

I. Background

On September 5, 2014, Plaintiff filed suit against World Recovery Service, LLC, ("defendant") alleging violations of the Fair Debt Collection Practices Act ("FDCPA") and the North Carolina Collection Agency Act ("NCCAA"). 15 U.S.C. § 1692, et seq.; N.C. Gen. Stat. § 58-70-90, et seq. Based on affidavit of service, the court finds that defendant was properly served with the summons and complaint in this action on September 15, 2014. (Doc. No. 5). Further, this court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1267, and personal jurisdiction over defendant because a substantial part of the events and omissions giving rise to this claim occurred in Charlotte, North Carolina. (Doc. No. 1, exhibit 2-9). Defendant is a corporation and as such is not an infant or incompetent person. Despite being lawfully served, defendant has nonetheless failed to answer or otherwise defend the action within the time permitted by the Federal Rules of Civil Procedure. Pursuant to Fed.R.Civ.P. 55(a), the Clerk of Court properly entered defendant's default on January 14, 2015. (Doc. No. 6). Plaintiff now requests default judgment on its claims, plus an award of attorney's fees. (Doc. No. 8).

II. Applicable Standard

The award of default judgment is governed by Rule 55, which provides in relevant part that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed.R.Civ.P. 55(a). The Fourth Circuit has "repeatedly expressed a strong preference that, as a general matter, defaults be avoided and that claims and defenses be disposed of on their merits." Colleton Preparatory Acad., Inc. v. Hoover Univ., Inc. , 616 F.3d 413, 417 (4th Cir. 2010) (citations omitted). Nonetheless, default judgment "may be appropriate when the adversary process has been halted because of an essentially unresponsive party." SEC v. Lawbaugh , 359 F.Supp.2d 418, 421 (D. Md. 2005). Here, defendant has been totally unresponsive, even to the Clerk's Notice of Default.

Where default is propose and liability is established, the court must then determine damages. Carter Behavior Health, 2011 WL 5325485, at *4 (citing Ryan , 253 F.3d at 780-81; Gaines, 635 F.Supp.2d at 416-17). The court must make an independent determination regarding damages and cannot accept as true factual allegations of damages. Id. (citing Lawbaugh , 359 F.Supp.2d at 422). While the court may conduct an evidentiary hearing to determine damages, it is not required to do so but may rely instead on affidavits or documentary evidence in the record to determine the appropriate sum. See E.E.O.C. v. North Am. Land Corp., No. 1:08-cv-501 , 2010 WL 2723727, at *2 (W.D. N.C. Jul.8, 2010). Here, the court has relied on the record before it in determining an appropriate award of damages.

III. Discussion

To determine damages on these two claims the court relies on affidavits and documentary evidence in the record. (Doc. No. 1 and Doc. No. 8, Attachments 1-5). Plaintiff requests judgment against Defendant as follows:

FDCPA[1] Statutory Damages $1, 000.00 NCCAA[2] Statutory Damages $112, 000.00 FDCPA Actual Damages $10, 000.00 NCCAA Actual Damages $10, 000.00 Attorneys' Fees $3, 235.00 Court Costs $400.00 TOTAL $136, 635

In determining whether to enter default judgment, the court must determine whether the well-pleaded allegations of the complaint support the relief sought. Ryan v. Homecomings Financial Network , 253 F.3d 778, 780 (4th Cir. 2001). The court finds that the allegations in the complaint establish violations of the FDCPA and the NCCAA. Plaintiff alleged that defendant called the plaintiff on two separate occasions with threats of lawsuits and false representations of an alleged debt, patent violations of the FDCPA. (Doc. No. 1). Furthermore, this same conduct violated the applicable state statute as well, the NCCAA. Id. Therefore, the court finds sufficient allegations that support the relief sought, so default judgment is proper.

Plaintiff requests this Court to award statutory damages in the amount of $1, 000 for violations of the FDCPA, and $112, 000 for violations of the NCCAA, and actual damages of $10, 000 for violation of the FDCPA and the NCCAA. Plaintiff explains that he is entitled to this award because defendant's threats to sue plaintiff ...


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