MULLIGAN FUNDING LLC v. TOMMY INTERIOR CONTRACTING CORP THANAS PANDO (2024)

REPORT AND RECOMMENDATION

Plaintiff Mulligan Funding, LLC commenced this action against Defendants Tommy Interior Contracting, Inc. (“Tommy Interior”) and Thanas Pando (“Pando”) (collectively, “Defendants”), seeking damages for an alleged breach of a business loan and security agreement, dated October 6, 2023 (“the Loan Agreement”). See generally Dkt. No. 1.

Currently pending before this Court, on a referral from the Honorable Ramon E. Reyes, United States District Judge, is Plaintiff's motion for default judgment against Defendants. See Dkt. No. 16; see also Feb. 23, 2024 Dkt. Order. For the reasons set forth below, this Court respectfully recommends that Plaintiff's motion for default judgment be granted in part and denied in part, without prejudice to renew.

I. Background

A. Factual Allegations

The following facts are taken from the complaint, Plaintiff's requests for certificates of default, Plaintiff's motion, and the attachments filed in support of Plaintiff's motion; the facts are assumed to be true for the purposes of this motion. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (in light of defendant's default, a court is required to accept all of plaintiff's factual allegations as true and draw all reasonable inferences in plaintiff's favor); BASF Corp. v. Original Fender Mender, Inc., No. 23-CV-2796 (HG) (JAM), 2023 WL 8853704, at *1 (E.D.N.Y. Dec. 22, 2023), report and recommendation adopted, Dkt. Order (E.D.N.Y. Jan. 9, 2024).

Plaintiff is a limited liability company organized and existing under the laws of Delaware. See Dkt. No. 1 ¶ 2. Plaintiff's principal place of business is located in San Diego, California. Id. ¶ 3. Tommy Interior is a for-profit corporation organized and existing under the laws of the State of New York. Id. ¶ 4. Tommy Interior's principal place of business is “located at 2230 27th St., Astoria, New York, 11105.” Id. ¶ 5. Tommy Interior's registered agent is Kokolakis & Associates, P.C., and its registered office is located at Grand Avenue Plaza, 3116 30th Avenue, Suite 204, Astoria, New York 11102. Id. ¶ 8. Pando is the Chief Executive Officer and owner of Tommy Interior. Dkt. No. 12 ¶ 5; see also Dkt. No. 12-1 at 16; Dkt. No. 12-2. Plaintiff notes that Pando is listed “on the [New York] Secretary of State Corporate and Business Entity Database as the Chief Executive Officer of Tommy Interior,” located at the following link: https://apps.dos.ny.gov/publicInquiry/EntityDisplay.” Dkt. No. 12 ¶ 7; see also Dkt. No. 12-2. Pando is a resident of Astoria, New York. Dkt. No. 1 ¶ 6. Plaintiff asserts that neither of the Defendants is a citizen of either the state of California or Delaware. Id. ¶ 9.

Plaintiff claims that on or about October 6, 2023, FinWise Bank (“FinWise”) and Tommy Interior entered into the Loan Agreement. Dkt. No. 1 ¶ 14. Plaintiff, “as the duly appointed servicer of the loan described in the [ ] Loan Agreement, has been appointed as agent for FinWise and granted all due authority required to enable [Plaintiff] to sue on FinWise's behalf in order to enforce FinWise's rights under” the Loan Agreement. Id. ¶ 15.

According to Plaintiff, the Loan Agreement includes an “ ‘Authorization Agreement for Direct Deposits (ACH ¹ Credit) and Direct Payments (ACH Debits)’ (referred to herein as a ‘Deposit and Debit Authorization’) which is specifically made a ‘part of (and incorporated by reference into) the [ ] Loan Agreement.’ ” Id. ¶ 16. Pursuant to the Deposit and Debit Authorization, Plaintiff disbursed $130,000.00 loaned to Tommy Interior into a bank account designated by Tommy Interior. Id. ¶¶ 17, 18. The Loan Agreement obligated Tommy Interior to repay the loan amount with interest and fees until the total repayment amount of $172,900.00 was paid to Plaintiff. Id. ¶ 19. Tommy Interior was obligated to make “50.4 weekly payments, each in the amount of $3,430.55.” Id. ¶ 20.

According to the terms of the Deposit and Debit Authorization, Tommy Interior enrolled in an automatic payment plan which “authorize[d] [Plaintiff] to collect [P]ayments required under the terms of Borrower's Business Loan and Security Agreement by initiating ACH debit entries to the Designated Checking Account in the amounts and on the dates provided in the Payment Schedule set forth in the accompanying Business Loan and Security Agreement Supplement.” Id. ¶ 21.

Plaintiff attempted to collect payments under the Loan Agreement on at least two consecutive dates when due, but Plaintiff contends that there were insufficient funds in the designated checking account. Id. ¶ 24. Tommy Interior failed to separately satisfy its obligations and “intentionally failed to ‘comply with’ and ‘promptly, punctually and faithfully perform’ its obligations under the [ ] Loan Agreement by failing to make payments to Lender when due.” Id. ¶¶ 25, 26. Accordingly, Plaintiff claims that Tommy Interior is in default of the Loan Agreement. Id. ¶ 28. Plaintiff argues that “[a] balance of $169,594.45 is currently outstanding under the [ ] Loan Agreement.” Id. ¶ 29. Pursuant to section 23 of the Loan Agreement, Tommy Interior is also liable to Plaintiff “on demand” for “any and all expenses, including, but not limited to, collection costs, all attorneys’ fees and expenses, and all other expenses of like or unlike nature which may be expended by [Plaintiff] to obtain or enforce payment” under the [ ] Loan Agreement.” Id. ¶ 30.

On or about October 6, 2023, in order to induce Plaintiff to lend funds to Tommy Interior via the Loan Agreement, Pando also executed a Personal Guaranty included at section 48 of the Business Loan Agreement (the “Guaranty”). Id. ¶ 31. According to Plaintiff, Pando “absolutely and unconditionally guarantee[d] the prompt payment to [Plaintiff], including its successors and assignees, of any and all Obligations incurred by [Tommy Interior] pursuant to” the [ ] Loan Agreement. Id. ¶ 32.

B. Procedural History

On November 30, 2023, Plaintiff filed its complaint against Defendants. See Dkt. No. 1. Plaintiff brings breach of contract claims against Tommy Interior and Pando. Id. Id. ¶¶ 38-49.

On December 19, 2023, Plaintiff filed an affidavit of service against Defendants. See Dkt. No. 9. Plaintiff stated that on December 14, 2023, Plaintiff personally served the summons, complaint with exhibits, and the Individual Practices and Rules of the undersigned on Pando at “2230 27th Street, Astoria, NY 11105.” See Dkt. No. 9, at 1. On the affidavit of service, the party served was described as a “male/white approximately 50 yrs of age” who “[i]dentified himself as Thanos [sic] Pando.” Id. Plaintiff served a copy of the aforementioned documents on Pando via first-class mail as well. Id.

Plaintiff next stated that on December 14, 2023, Plaintiff personally served the summons, complaint with exhibits, and the Individual Practices and Rules of the undersigned on Tommy Interior at “2230 27th Street, Astoria, NY 11105.” See Dkt. No. 9, at 2. On the affidavit of service, the party served was described as a “male/white approximately 50 yrs of age” who “[i]dentified himself as Thanos [sic] Pando.” Id. Plaintiff also served a copy of the aforementioned documents on Tommy Interior via first-class mail. Id.

On January 18, 2024, Plaintiff filed a request for a certificate of default against Defendants. Dkt. No. 10. On January 25, 2024, the Clerk of the Court entered default against only Pando. Dkt. No. 11. On the same date, the Clerk of Court denied the request for a certificate of default against Tommy Interior, as “[t]he affidavit of service fails to state if [ ] Pando is actually authorized (and in what capacity) to accept service on behalf of the Corporate Defendant.” Jan. 25, 2024 Dkt. Entry. On January 26, 2024, the Court ordered Plaintiff to file an amended request for a certificate of default against Tommy Interior by January 30, 2024. See Jan. 26, 2024 Dkt. Order.

On January 30, 2024, Plaintiff filed an amended request for a certificate of default against Tommy Interior. Dkt. No. 12. Plaintiff explained that, as Pando is the Chief Executive Officer of Tommy Interior, he is authorized to receive service of the summons and complaint under Federal Rule of Civil Procedure 4. Id. ¶¶ 5-8. Plaintiff added that “delivery of the Summons and Complaint on Thanas Pando, as Chief Executive Officer of Tommy Interior Contracting is proper service on the corporation under FRCP 4(b),” and that “[s]ervice was proper and complies with Rule 4(b) because the Summons and Complaint together with the assigned Judge's Chambers Rules were handed to Mr. Pando on December 14, 2023 and true copies were also mailed.” Id. ¶¶ 9-10.

On February 1, 2024, the Clerk entered default against Tommy Interior. Dkt. No. 13. On February 21, 2024, Plaintiff filed a motion for default judgment against Defendants. Dkt. Nos. 14, 15. On February 22, 2024, the Court issued the following order:

Denying [Plaintiff's] Motion for Default Judgment as deficient with leave to refile. See Loc. Civ. R. 55.2(b) (requiring that the party seeking default judgment append to the application (1) the Clerk's certificate of default; (2) a copy of the claim to which no response has been made, and (3) a proposed form of default judgment); Monica Colledge v. Steelstone Grp., LLC, No. 22-CV-2873 (EK) (RER), 2023 WL 5152300, at *3 (E.D.N.Y. June 16, 2023), adopted by 2023 WL 5759191 (Sept. 5, 2023) (“That some of the items demanded by Rule 55.2(b) may be found elsewhere on the docket does not absolve a movant of their responsibility to attach copies to their moving papers.”); see also Loc. Civ. R. 7.1 (requiring that all motion papers be accompanied by a memorandum of law, “setting forth the cases and other authorities relied upon in support of the motion, and divided, under appropriate headings, into as many parts as there are issues to be determined”)

Feb. 22, 2024 Dkt. Order.

On February 22, 2024, Plaintiff moved for default judgment against Defendants. See Dkt. Nos. 16, 17. On February 23, 2024, Judge Reyes referred this matter to the undersigned for a report and recommendation. See Feb. 23, 2024 Dkt. Entry.

II. Standard for Default Judgment

“Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). At the first step, the Clerk of Court enters a party's default after an affidavit or other evidence shows that the “party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” Fed. R. Civ. P. 55(a); Esquivel v. Lima Rest. Corp., No. 20-CV-2914 (ENV) (MMH), 2023 WL 6338666, at *3 (E.D.N.Y. Sept. 29, 2023) (“when a party uses an affidavit or other proof to show that a party has ‘failed to plead or otherwise defend’ against an action, the clerk shall enter a default.” (citing Fed. R. Civ. P. 55(a)). “If a claim is for ‘a sum certain or a sum that can be made certain by computation,’ the clerk can enter judgment.” Id. (citing Fed. R. Civ. P. 55(b)(1)).

At the second step, and “[i]n all other cases, the party must apply to the court for a default judgment.” Id. (citing Fed. R. Civ. P. 55(b)(2)). To “enter or effectuate judgment” the Court is empowered to: “(A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.” Fed. R. Civ. P. 55(b)(2).

The Second Circuit “generally disfavor[s]” default judgment and has repeatedly expressed a “preference for resolving disputes on the merits.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). Nevertheless, in evaluating a motion for default judgment, a court accepts as true the plaintiff's well-pleaded factual allegations, except those relating to damages. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); see also Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). A plaintiff bears the burden of alleging “specific facts,” rather than “mere labels and conclusions” or a “formulaic recitation of the elements,” so that a court may infer a defendant's liability. Cardoza v. Mango King Farmers Mkt. Corp., No. 14-CV-3314 (SJ) (RER), 2015 WL 5561033, at *3 (E.D.N.Y. Sept. 1, 2015) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)), report and recommendation adopted, 2015 WL 5561180 (E.D.N.Y. Sept. 21, 2015)).

The decision to grant or deny a default motion is “left to the sound discretion of a district court.” Esquivel, 2023 WL 6338666, at *3 (quoting Shah v. New York State Dep't of Civ. Serv., 168 F.3d 610, 615 (2d Cir. 1999)). A court “possesses significant discretion” in granting a motion for default judgment, “including [determining] whether the grounds for default are clearly established.” Chen v. Oceanica Chinese Rest., Inc., No. 13-CV-4623 (NGG) (PK), 2023 WL 2583856, at *7 (E.D.N.Y. Mar. 21, 2023) (quotations and citation omitted). The Court may also “consider numerous factors, including whether plaintiff has been substantially prejudiced by the delay involved and whether the grounds for default are clearly established or in doubt.” Franco v. Ideal Mortg. Bankers, Ltd., No. 07-CV-3956 (JS) (AKT), 2010 WL 3780972, at *2 (E.D.N.Y. Aug. 23, 2010) (cleaned up), report and recommendation adopted, 2010 WL 3780984 (E.D.N.Y. Sept. 17, 2010). “Courts have significant discretion in granting default judgments and consider the following factors: (1) whether the defendant's default was willful; (2) whether [the] defendant has a meritorious defense to [the] plaintiff's claims; and (3) the level of prejudice the non-defaulting party would suffer as a result of the denial of the motion for default judgment.” Canon U.S.A., Inc. v. Sysorex Gov't Servs., Inc., No. 23-CV-8001 (DLI) (LGD), 2024 WL 1914347, at *3 (E.D.N.Y. May 1, 2024) (internal citations omitted); see also Enron Oil Corp., 10 F.3d at 96; Franco, 2010 WL 3780972, at *2 (listing factors).

III. Jurisdiction and Venue

The Court “must satisfy itself that it has subject matter and personal jurisdiction before rendering judgment against defendants.” Dumolo v. Dumolo, No. 17-CV-7294 (KAM) (CLP), 2019 WL 1367751, at *4 (E.D.N.Y. Mar. 26, 2019); see Covington Indus., Inc. v. Resintex A.G., 629 F.2d 730, 732 (2d Cir. 1980) (“A judgment entered against parties not subject to the personal jurisdiction of the rendering court is a nullity.”).

A. Subject Matter Jurisdiction

The Court has diversity jurisdiction over Plaintiff's claims because Plaintiff seeks damages, exclusive of attorneys’ fees and costs, in excess of $75,000, and the parties are citizens of different states. See 28 U.S.C. § 1332. As noted above, Plaintiff is organized under the laws of Delaware and has a principal place of business in California. Dkt. No. 1 ¶ 11. Tommy Interior is organized under the laws of New York and has a principal place of business in New York. Id. Pando is a resident of and domiciled in New York. Id. Accordingly, this Court respectfully recommends a finding that the Court has subject matter jurisdiction over Plaintiff's claims.

B. Personal Jurisdiction

“A court may not enter default judgment unless it has jurisdiction over the person of the party against whom the judgment is sought, which also means that he must have been effectively served with process.” BASF Corp., 2023 WL 8853704, at *5 (internal quotation marks and citation omitted); Nat'l Cas. Co. v. Runway Towing Corp., No. 19-CV-5091 (DG) (CLP), 2021 WL 5310857, at *2 (E.D.N.Y. Oct. 19, 2021), report and recommendation adopted, 2021 WL 5304055 (E.D.N.Y. Nov. 15, 2021) (“A default judgment may not be granted ‘if the defendant has not been effectively served with process.’ ”) (quoting Doe v. Alsaud, 12 F. Supp. 3d 684, 687 (S.D.N.Y. 2014)). Plaintiff has the burden of showing adequate service. Nat'l Cas. Co., 2021 WL 5310857, at *2.

Indeed, “[e]ven where the Clerk of the Court has entered the defendant's default, [the] court may appropriately review the adequacy of service before entering a default judgment.” Prescription Containers, Inc. v. Cabiles, No. 12-CV-4805 (CBA) (VMS), 2014 WL 1236919, at *5 (E.D.N.Y. Feb. 14, 2014) (quotations and citation omitted), report and recommendation adopted, 2014 WL 1237098 (E.D.N.Y. Mar. 25, 2014).

1. Tommy Interior

Under Fed. R. Civ. P. 4(h)(1)(B), a corporation can be served by “delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process.” The Federal Rules also permit a plaintiff to serve a corporation according to the law of the state where the district court is located. Fed. R. Civ. P. 4(h)(1)(A); see Trustees of the United Teamster Pension Fund a v. Juniors Produce Inc., No. 15-CV-6927 (ARR) (ST), 2016 WL 4995023, at *2 (E.D.N.Y. Aug. 31, 2016), report and recommendation adopted, 2016 WL 4995154 (E.D.N.Y. Sept. 19, 2016).

As relevant here, New York law, like its federal counterpart, allows for a corporation to be served by delivering the summons and complaint to “an officer, director, managing or general agent ․ or to any other agent authorized by appointment or by law to receive service.” N.Y. C.P.L.R. § 311(a)(1). A corporation may also be served via its “registered agent” or the New York Secretary of State in Albany pursuant to section 306 of the New York Business Corporation Law. See N.Y. Bus. Corp. L. § 306(a) (N.Y. C.P.L.R. § 306(b)(1) (“Service of process on the secretary of state as agent of a domestic or authorized foreign corporation shall be made by personally delivering to and leaving with the secretary of state or a deputy, or with any person authorized by the secretary of state to receive such service, at the office of the department of state in the city of Albany duplicate copies of such process together with the statutory fee.”).

“[S]ervice on a corporate defendant is complete once [it] is effectuated through the Secretary of State under N.Y. Bus. Corp. Law § 306(b)(1).” Logan v. World Luxury Cars, Inc., No. 15-CV-248 (ENV) (PK), 2023 WL 156878, at *2 (E.D.N.Y. Jan. 11, 2023) (internal quotation marks omitted) (“New York law requires corporations to advise the Secretary of State of any change of address, and accordingly, because plaintiff served [defendant] through the Secretary of State, service on that defendant was necessarily proper, regardless of whether the address on file was correct.”).

Here, on December 14, 2023, Plaintiff personally served the summons, complaint with exhibits, and the Individual Practices and Rules of the undersigned on Tommy Interior at “2230 27th Street, Astoria, NY 11105.” See Dkt. No. 9, at 2. On the affidavit of service, the party served was described as a “male/white approximately 50 yrs of age” who “[i]dentified himself as Thanos [sic] Pando.” Id. Plaintiff also served a copy of the aforementioned documents on Tommy Interior via first-class mail. Id.

Plaintiff argues that because Pando is the Chief Executive Officer of Tommy Interior, he is authorized to receive service of the summons and complaint under Federal Rule of Civil Procedure 4. Dkt. No. 12 ¶¶ 5-8. Plaintiff's service of the summons and complaint on Tommy Interior is therefore proper under federal and New York law. Accordingly, this Court respectfully recommends a finding that Plaintiff has properly served Tommy Interior.

2. Pando

New York state law permits service to be made by “delivering the summons ․ to a person of suitable age and discretion at the actual place of business ․ of the person to be served and by either mailing the summons ․ to the person to be served at his or her actual place of business” or to the person's last known residence. N.Y. C.P.L.R. § 308(2).

“All that is required of service under Section 308(2) is that process be served on a person of suitable age and discretion at the actual place of business ‘regardless of whether or not that person is an employee or is otherwise officially authorized to accept service on behalf of the defendant.’ ” Nat'l Cas. Co., 2021 WL 5310857, at *2-3 (quoting Dantzig v. County of Westchester, No. 19-CV-8811 (NSR), 2021 WL 1030655, at *5 (S.D.N.Y. Mar. 16, 2021)). “New York courts have construed ‘actual place of business’ to include (1) a place where the defendant regularly transacts business, or (2) an establishment that the defendant owns or operates, where there is a clear identification of the work performed by her within that place of business.” Warshun v. New York Cmty. Bancorp, Inc., 957 F. Supp. 2d 259, 266 (E.D.N.Y. 2013) (citation omitted).

“A person is of suitable age and discretion if they are of sufficient maturity, understanding, and responsibility under the circumstances so as to be reasonably likely to convey the summons to the defendant.” Nat'l Cas. Co., 2021 WL 5310857, at *2-3 (citations omitted). “An adult co-worker can satisfy these requirements; it makes no difference if the individual refuses to give his name or gives a false one.” Maldonado v. Arcadia Bus. Corp., No. 14 CV 4129 (DLI) (RML), 2015 WL 12791329, at *2 (E.D.N.Y. Aug. 27, 2015); see also Miranda v. Astoria Provisions, LLC, No. 19-CV-2923, 2020 WL 5810160, at *1 (E.D.N.Y. Sept. 30, 2020) (collecting cases where co-worker was not identified by full name).

Here, on December 14, 2023, Plaintiff personally served the summons, complaint with exhibits, and the Individual Practices and Rules of the undersigned on Pando at “2230 27th Street, Astoria, NY 11105.” See Dkt. No. 9 at 1. On the affidavit of service, the party served was described as a “male/white approximately 50 yrs of age” who “[i]dentified himself as Thanos [sic] Pando.” Id. Plaintiff served a copy of the aforementioned documents on Pando via first class mail as well. See id. “A properly executed affidavit, like the one executed in this case, ‘is prima facie evidence of proper service.’ ” Nat'l Cas. Co., 2021 WL 5310857, at *2-3 (quoting San Lim v. MTA Bus Co., 190 A.D.3d 493, 493 (1st Dep't 2021). Thus, this Court respectfully recommends a finding that service on Pando was proper in this case.

C. Venue

“A civil action may be brought in ․ a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2). Here, Plaintiff argues that Tommy Interior has its principal place of business in this district and Pando is domiciled in the Eastern District of New York. Dkt. No. 1 ¶ 13. Accordingly, this Court respectfully recommends that venue is proper in this District under 28 U.S.C. § 1391(b)(2).

IV. Local Civil Rules 7.1 and 55.2

“A motion for default judgment will not be granted unless the party making the motion adheres to all of the applicable procedural rules.” Annuity, Welfare & Apprenticeship Skill Improvement & Safety Funds of Int'l Union of Operating Engineers, Loc. 15, 15A, 15C & 15D, AFL-CIO v. Allstate Mapping & Layout, LLC, No. 22-CV-1831 (PKC) (TAM), 2023 WL 1475389, at *1 (E.D.N.Y. Feb. 2, 2023) (quoting Century Surety Company v. Adweek, No. 16-CV-335 (ENV) (PK), 2018 WL 10466835, at *1 (E.D.N.Y. Jan. 9, 2018)). “[L]ocal rules have the force of law, as long as they do not conflict with a rule prescribed by the Supreme Court, Congress, or the Constitution.” Fin. Servs. Vehicle Tr. v. Osmeña, No. 22-CV-7491 (RPK) (CLP), 2023 WL 7000935, at *2 (E.D.N.Y. Aug. 15, 2023) (citations and quotation marks omitted).

Under Local Civil Rule 7.1, a motion for default judgment must consist of a notice of motion, a memorandum of law, and supporting affidavits and exhibits containing any factual information and portions of the record necessary for the decision of the motion. Loc. Civ. R. 7.1(a). Under Local Civil Rule 55.2, a “party seeking a judgment by default ․ shall append to the application (1) the Clerk's certificate of default, (2) a copy of the claim to which no response has been made, and (3) a proposed form of default judgment,” and must mail these three items to the “last known residence” of the defaulting party (if an individual). Loc. Civ. R. 55.2(b)-(c) (emphasis added).

Here, this Court finds that Plaintiff has complied with Local Civil Rules 7.1 and 55.2(b). Plaintiff's motion includes a notice of motion (Dkt. No. 16), a memorandum of law (Dkt. No. 17), and a declaration from Mr. Robert Fair, the Principal Risk and Recovery Manager for Plaintiff (Dkt. No. 16-4), in accordance with Local Civil Rule 7.1. Plaintiff also attaches the complaint, certificate of default, and a proposed form of default judgment to its motion in accordance with Local Civil Rule 55.2(b). See Dkt. Nos. 16-1, 16-5, 16-6.

Plaintiff has complied with Local Civil Rule 55.2(c) only with respect to Tommy Interior. Local Civil Rule 55.2(c) states:

[u]nless otherwise ordered by the Court, all papers submitted to the Court pursuant to Local Civil Rule 55.2(a) or (b) [ ] shall simultaneously be mailed to the party against whom a default judgment is sought at the last known residence of such party (if an individual) or the last known business address of such party (if a person other than an individual). Proof of such mailing shall be filed with the Court. If the mailing is returned, a supplemental affidavit shall be filed with the Court setting forth that fact, together with the reason provided for return, if any.

Loc. Civ. R. 55.2(c) (emphasis added).

Plaintiff served Tommy Interior with a copy of the default judgment motion at its last known business address. Dkt. No. 16-5 (“2230 27th Street, Astoria, New York 11105”). Plaintiff, however, did not comply with Local Civil Rule 55.2(c) regarding service of its motion on Pando. Plaintiff served Pando at the same business address as Tommy Interior (“2230 27th Street, Astoria, New York 11105”). Id. There is no indication that Tommy Interior's business address is also “the last known residence” of Pando per Local Civil Rule 55.2(c).

Given that Plaintiff did not serve Pando with its motion for default judgment at Pando's last known residence, Plaintiff's motion for default judgment against Pando is deficient on its face and should be denied. See, e.g., Yoon v. Toothsavers Dental Lab'y, Inc., No. 19-CV-2283 (ERK) (VMS), 2020 WL 13580466, at *8 (E.D.N.Y. June 22, 2020) (recommending denial of default judgment motion where Plaintiff's submission in support of motion for default judgment did not include “a copy of the Clerk's certificate of default, a copy of the complaint, or a proposed form of default judgment”), report and recommendation adopted, July 27, 2020 Dkt. Order; Apex Mar. Co. v. Furniture, Inc., No. 11-CV-5365 (ENV) (RER), 2012 WL 1901266, at *1 (E.D.N.Y. May 18, 2012) (denying default judgment for, inter alia, plaintiff's failure to submit copy of certificate of default); Badalamenti v. Country Imported Car Corp., No. 10-CV-4993 (SJF) (GRB), 2012 WL 601481, at *2 (E.D.N.Y. Feb. 22, 2012) (“[T]he rules require that the Clerk's certificate of default be appended to the motion,” and failure to comply with “[t]his technicality alone supports [a] denial of [the] plaintiff's motion for a default judgment.”). “As harsh at it may seem,” courts in this district “have repeatedly” denied motions for default judgment based on a movant's failure to adhere to Local Civil Rule 55.2(b). Lugo v. Allstate Ins. Co., No. 19-CV-7150 (JMA) (JMW), 2022 WL 3928727, at *5 (E.D.N.Y. Aug. 10, 2022) (recommending plaintiff's motion for default judgment be denied where “notably absent from Plaintiff's motion [was] the Clerk's certificate of default, a copy of the Complaint, and a proposed form of default judgment”), report and recommendation adopted, 2022 WL 3914981 (E.D.N.Y. Aug. 31, 2022).

Accordingly, as Plaintiff has complied with Local Civil Rules 7.1 and 55.2 with regard to its motion against Tommy Interior, the Court respectfully recommends a finding that Plaintiff's motion against Tommy Interior is procedurally compliant under the Local Civil Rules. The Court respectfully recommends a finding that Plaintiff's motion against Pando be denied, without prejudice, for failure to comply with Local Civil Rule 55.2.

V. The Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act (“SCRA”) requires a plaintiff seeking default judgment to “file with the court an affidavit stating whether or not the defendant is in military service and showing necessary facts to support the affidavit.” 50 U.S.C. § 3931; see also Windward Bora, LLC v. Ortiz, No. 21-CV-04154 (MKB) (JMW), 2022 WL 3648622, at *5 (E.D.N.Y. July 5, 2022), report and recommendation adopted, 2022 WL 3647586 (E.D.N.Y. Aug. 24, 2022); Dominguez v. Hernandez, No. 21-CV-7051 (MKB) (VMS), 2023 WL 2575224, at *20 (E.D.N.Y. Feb. 22, 2023), report and recommendation adopted, 2023 WL 2574876 (E.D.N.Y. Mar. 20, 2023).

“The non-military affidavit must be based not only on an investigation conducted after the commencement of an action or proceeding but also after a default in appearance by the party against whom the default judgment is to be entered.” Apex Mar. Co., 2012 WL 1901266, at *1.

Here, Plaintiff fails to submit any declaration stating that Pando is not in the military and was not in the military at the time that the certificate of default was entered. Instead, the Court makes a passing reference that “[n]either Tommy Contracting [sic] nor Pando are minors, incompetent, or serving in the military.” Dkt. No. 17, at 5. But Plaintiff's assertion—contained in a memorandum of law in a sentence containing the wrong name for the co-defendant entity—is insufficient to show that Plaintiff has complied with the SCRA regarding Pando.

Ultimately, “[t]he court lacks the power to excuse compliance with th[is] statute.” Uribe v. Nieves, No. 17-CV-5155 (RRM) (RER), 2018 WL 4861377, at *1 (E.D.N.Y. Sept. 26, 2018). Should Plaintiff seek to file another motion for default judgment against Pando, Plaintiff can establish compliance with the SCRA by, for instance, “obtain[ing] a report certifying active-duty military status through the Servicemembers Civil Relief Act website.” Morales v. Los Cafetales Rest. Corp., No. 21-CV-1868 (AMD) (RER), 2023 WL 375647, at *5 (E.D.N.Y. Jan. 3, 2023), report and recommendation adopted, 2023 WL 375642 (E.D.N.Y. Jan. 24, 2023) (citing https://scra.dmdc.osd.mil/scra). The Court notes that “Plaintiff's burden in this regard is not a heavy one,” especially since “the Department of Defense maintains a Servicemembers Civil Relief Act website for the purposes of, among other things, determining whether an individual is on active duty.” Alzal Corp. v. Killer Carz LLC, No. 15-CV-4968 (RPK) (MMH), 2024 U.S. Dist. LEXIS 59929, at *9 n.4 (E.D.N.Y. Mar. 29, 2024) (citation omitted); Morales, 2023 WL 375647, at *13 n.3 (“It is possible to obtain a report certifying active-duty military status through the Servicemembers Civil Relief Act website.”).

At bottom, even if it may seem unlikely that Panda was serving in the military at the time of default, “that does not absolve plaintiff[ ] from complying with the procedural requirements of the SCRA.” Guanglei Jiao v. Shang Shang Qian Inc., No. 18-CV-5624 (ARR) (VMS), 2020 WL 5105063, at *2 (E.D.N.Y. Aug. 31, 2020). Accordingly, this Court respectfully recommends a finding that Plaintiff's motion for default judgment against Pando also be denied, without prejudice to renew, for failure to comply with the SCRA.

VI. Liability

As the Court respectfully recommends that Plaintiff's motion for default judgment be denied as to Pando, the Court next evaluates liability with respect to Plaintiff's motion for default judgment against Tommy Interior.

A. Choice of Law

A federal court exercising diversity jurisdiction applies the law of the forum state, including its choice-of-law rules, to determine the applicable substantive law—here, New York law. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 497 (1941). “New York law is clear in cases involving a contract with an express choice-of-law provision: Absent fraud or violation of public policy, a court is to apply the law selected in the contract as long as the state selected has sufficient contacts with the transaction.” Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir. 2000).

Here, the Loan Agreement provides that the laws of the state of Utah applies. See Dkt. No. 1-1 ¶ 40. Accordingly, the Court applies Utah law to Plaintiff's claims.

B. Plaintiff's Breach of Contract Claim

To succeed on a claim for breach of contract under Utah law, Plaintiff must prove the following elements: (1) a contract; (2) that it performed its obligations under the contract; (3) breach of the contract by Tommy Interior; and (4) damages. Komatsu Equip. Co. v. Ravyn & Robyn Constr., LLC, No. 17-CV-2010 (SJF) (AYS), 2018 WL 5456674, at *5 (E.D.N.Y. Aug. 8, 2018), report and recommendation adopted, 2018 WL 4853052 (E.D.N.Y. Sept. 28, 2018), aff'd sub nom. Indus. Water Sols., LLC v. Ravyn & Robyn Constr., LLC, 789 F. App'x 920 (2d Cir. 2020) (citing Northern Regal Homes, Inc. v. Roundpoint Mortg. Serv. Corp., No. 15-CV-0035, 2016 WL 7441634, at *3 (D. Utah Dec. 27, 2016); see also Freight Tec Mgmt. Grp. Inc. v. Chemex Inc., 499 P.3d 894, 909 (Utah App. Feb. 17, 2022) (“The elements of a prima facie case for breach of contract are (1) a contract, (2) performance by the party seeking recovery, (3) breach of the contract by the other party, and (4) damages.”).

Here, there was a contract. See Dkt. No. 1-1. Plaintiff performed its obligations under the contract, to wit, Plaintiff loaned Tommy Interior $130,000.00. Dkt. No. 1 ¶ 18. Plaintiff argues that Tommy Interior breached the contract by “intentionally fail[ing] to ‘comply with’ and ‘promptly, punctually and faithfully perform’ its obligations under the Business Loan Agreement by failing to make payments to Lender when due.” Id. ¶¶ 25, 38-44. Plaintiff then alleges damages against Tommy Interior in an amount of at least $169,594.45. Id. ¶¶ 29, 44.

At the default judgment stage, these allegations are sufficient to establish Tommy Interior's liability for breach of contract. See, e.g., Abularach v. High Wing Aviation LLC, No. 22-CV-1266 (MKB) (RML), 2022 WL 18558800, at *2 (E.D.N.Y. Dec. 19, 2022) (recommending that plaintiff's motion for default judgment be granted with respect to plaintiff's breach of contract claim), report and recommendation adopted, 2023 WL 1766282 (E.D.N.Y. Feb. 3, 2023); Arch Specialty Ins. Co. v. Canbert Inc., No. 19-CV-05920 (EK) (PK), 2021 WL 1200329, at *4 (E.D.N.Y. Mar. 9, 2021) (same), report and recommendation adopted, 2021 WL 1193004 (E.D.N.Y. Mar. 30, 2021).²

Accordingly, this Court respectfully recommends that Plaintiff's motion for default judgment be granted with respect to its breach of contract claim against Tommy Interior.

VII. Damages

As Tommy Interior's liability has been established, the Court turns to evaluate damages. “While a party's default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages.” Greyhound Exhibitgroup, Inc., 973 F.2d at 158. “Rather, the Court must be satisfied that Plaintiff has met the burden of proving damages to the Court with reasonable certainty.” Balhetchet v. Su Caso Mktg. Inc., No. 19-CV-4475 (PKC) (SJB), 2020 WL 4738242, at *3 (E.D.N.Y. Aug. 14, 2020) (cleaned up). A plaintiff may submit documentary evidence or detailed affidavits to support their damages claim. Chen, 2023 WL 2583856, at *14.

Plaintiff requests judgment against Tommy Interior and Pando, jointly and severally, in the principal amount of $169,594.45. Dkt. No. 1 at 7. As set forth above, this Court finds that Plaintiff has adequately proven at least Tommy Interior's liability such that judgment may be entered against Tommy Interior for this amount. See Merch. Cash & Cap., LLC v. Haute Soc'y Fashion, Inc., No. 16-CV-2696 (ILG), 2017 WL 2912452, at *3 (E.D.N.Y. July 6, 2017) (entering default judgment against both defendants for total amount due on plaintiff's breach of contract and breach of guaranty claims); cf. Daimlerchrysler Fin. Servs. Americas LLC v. Kennedy, No. 106-CV-0155 (LEK) (DRH), 2006 WL 8452392, at *1 (N.D.N.Y. May 31, 2006) (“The matter currently at bar, involving breach of contract and guarantees, and payment of indebtedness, appears to concern matters of joint and several liability”).

Plaintiff also requests pre-judgment interest. Dkt. No. 1, at 7. Plaintiff argues that the appropriate interest rate is ten percent per year per Utah Code Ann. § 15-1-1(2).³ To that end, and as set forth in Mr. Fair's declaration, Plaintiff submits that “the amount due in applying the contractual interest rate is $169,594.45,” comprised of “(a) $130,000.00 in principal advanced plus origination fees; (b) $65.00 in fees for insufficient payment; and (c) 39,529.45 in interest through October 6, 2023.” Dkt. No. 17. Plaintiff's calculation for these figures are found in Mr. Fair's data calculation spreadsheet, dated February 15, 2024. See Dkt. No. 16-4, at 4-6.

Plaintiff does not seek post-judgment interest, but “ ‘the very language of 28 U.S.C. § 1961 ensures that an award of post-judgment interest is mandatory in any civil case where money damages are recovered.’ ” Campos Marin v. J&B 693 Corp., No. 19-CV-00569 (JGK) (KHP), 2022 WL 377974, at *13 (S.D.N.Y. Jan. 21, 2022) (quoting Duffy v. Oyster Bay Indus., Inc., 10-CV-3205 (ADS) (ETB), 2011 WL 2259798, at *3 (E.D.N.Y. Mar. 29, 2011), report and recommendation adopted, 2011 WL 2259749 (E.D.N.Y. June 2, 2011)), report and recommendation adopted, 2022 WL 374522 (S.D.N.Y. Feb. 7, 2022); see Tacuri v. Nithin Constr. Co., No. 14-CV-2908 (CBA) (RER), 2015 WL 790060, at *12 (E.D.N.Y. Feb. 24, 2015) (awarding post-judgment interest despite plaintiffs’ failure to request post-judgment interest in default judgment motion). This Court therefore respectfully recommends that Plaintiff be awarded post-judgment interest, to be calculated from the date the Clerk of Court enters judgment in this action until the date of payment, at the rate set forth in 28 U.S.C. § 1961.

VIII. Attorneys’ Fees and Costs

Plaintiff's complaint also seeks to recover attorneys’ fees and costs from Defendants. See Dkt. No. 1, at 7. Plaintiff's memorandum of law, however, is silent on its entitlement to fees or costs (Dkt. No. 17). Indeed, the rest of Plaintiff's motion is also silent about attorneys’ fees and costs, except for a passing references attorneys’ fees and costs in Mr. Fair's declaration. See Dkt. No. 16-4 (noting that “[a]ttorneys’ fees [and] costs are also owed, but are not included in the calculations” on his affidavit). Plaintiff also does not mention attorneys’ fees or costs in its proposed order of judgment. See Dkt. No. 16-6.

The Court therefore finds that Plaintiff has abandoned its request for attorneys’ fees and costs. See, e.g., State Street Bank and Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 172 (2d Cir. 2004) (“When a party fails adequately to present arguments in [its] brief, we consider those arguments abandoned.” (citation omitted)).

Moreover, even if Plaintiff's motion included a proper request for attorneys’ fees and costs, Plaintiff's failure to attach billing records or receipts to its motion would warrant denial of these categories of damages. See, e.g., U.S. Bank Nat'l Ass'n as Tr. for RMAC Tr., Series 2016-CTT v. Swezey, No. 20-CV-91 (FB) (RLM), 2022 WL 1422841, at *10 (E.D.N.Y. Mar. 24, 2022) (“plaintiff has provided no documentation to support any request for attorneys’ fees. Therefore, plaintiff should not be awarded its attorneys’ fees.”), report and recommendation adopted, 2022 WL 2390989 (E.D.N.Y. July 1, 2022); Green Mountain Holdings (Cayman) Ltd. v. Eddington Link, LLC, No. 21-CV-1729 (EK) (RER), 2021 WL 7710107, at *4 n.4 (E.D.N.Y. Dec. 31, 2021) (“Even if Plaintiff had properly requested attorney's fees in this default judgment action, an award of attorney's fees would not be appropriate because Plaintiff did not submit any billing records.”), report and recommendation adopted, 2022 WL 903062 (E.D.N.Y. Mar. 28, 2022); Florez v. Mister Cangrejo NY Corp., No. 20-CV-4745 (AMD) (CLP), 2022 WL 837490, at *7 (E.D.N.Y. Mar. 1, 2022) (recommending denial of request for costs due to lack of documentation), report and recommendation adopted, 2022 WL 837056 (E.D.N.Y. Mar. 21, 2022).

Accordingly, this Court respectfully recommends that Plaintiff is not awarded attorneys’ fees or costs.

IX. Conclusion

Accordingly, for the reasons set forth above, this Court respectfully recommends that Plaintiff's motion for default judgment be granted in part and denied in part. This Court respectfully recommends that Plaintiff is awarded $169,594.45 against Tommy Interior, which is the principal amount due under Loan Agreement plus pre-judgment interest. The Court also respectfully recommends that Plaintiff be awarded post-judgment interest against Tommy Interior. This Court further respectfully recommends that Plaintiff is not awarded attorneys’ fees or costs.

A copy of this Report and Recommendation is being electronically served on counsel. This Court directs Plaintiff's counsel to serve a copy of this Report and Recommendation by overnight mail and first-class mail to Defendants by May 14, 2024.

• Tommy Interior Contracting Corp., 2230 27th St., Astoria, New York, 11105

• Thanas Pando, 2230 27th St., Astoria, New York, 11105

Plaintiff shall file proof of service by May 14, 2024.

Should Plaintiff seek to renew its motion for default judgment against Pando, it must also serve any such motion at the last known residence of Pando, for the reasons explained above.

Any objections to this Report and Recommendation must be filed within 14 days after service of this Report and Recommendation. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2). See also Fed. R. Civ. P. 6(a) & (d) (addressing computation of days). Any requests for an extension of time for filing objections must be directed to Judge Reyes. Failure to file objections within this period designating the particular issues to be reviewed waives the right to appeal the district court's order. See 28 U.S.C. § 636(b); Fed. R. Civ. P. 72(b)(2); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010); Kotlyarsky v. United States Dep't of Just., No. 22-2750, 2023 WL 7648618 (2d Cir. Nov. 15, 2023); see also Thomas v. Arn, 474 U.S. 140 (1985).

SO ORDERED.

FOOTNOTES

1.   Per the Department of the Treasury, “[t]he Automated Clearing House (ACH) is the primary system that agencies use for electronic funds transfer (EFT). With ACH, funds are electronically deposited in financial institutions, and payments are made online.” See https://www.fiscal.treasury.gov/ach/ (last visited on May 13, 2024).

2.   Under New York law, “[i]n order to recover from a defendant for breach of contract, a plaintiff must prove, by a preponderance of the evidence, (1) the existence of a contract between itself and that defendant; (2) performance of the plaintiff's obligations under the contract; (3) breach of the contract by that defendant; and (4) damages to the plaintiff caused by that defendant's breach.” Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 52 (2d Cir. 2011); accord AKF, Inc. v. W. Foot & Ankle Ctr., 632 F. Supp. 3d 66, 74 (E.D.N.Y. 2022). While New York law does not apply to the Loan Agreement, the Court notes that, if New York law did apply herein, Plaintiff will have satisfied the four elements, for the same reasons it satisfies the four elements under Utah law.

3.   As the Utah Supreme Court noted in Wilcox v. Anchor Wate, Co., 164 P.3d 353, 365 (Utah 2007):Title 15 of the Utah Code is entitled ‘Contracts and Obligations in General.’ The interest rate applied by the district court is that specified in chapter 1 of title 15. Chapter 1 provides in relevant part:15–1–1. Interest rates—Contracted rate—Legal rate.(1) The parties to a lawful contract may agree upon any rate of interest for the loan or forbearance of any money, goods, or chose in action that is the subject of their contract.(2) Unless parties to a lawful contract specify a different rate of interest, the legal rate of interest for the loan or forbearance of any money, goods, or chose in action shall be 10% per annum.Id. (citing Utah Code Utah Code Ann. § 15-1-1(2)).

JOSEPH A. MARUTOLLO United States Magistrate Judge