United States District Court, D. Hawaii
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY
IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND
DECREE OF FORECLOSURE AGAINST DEFENDANTS ALEX, LLC, DONALD
DWIGHT HODGE, AND INFINITY CAPITAL FINANCE
TRADER UNITED STATES MAGISTRATE JUDGE
LOAN FUNDER LLC, SERIES 2130 (“Loan Funder”)
filed a Motion for Default Judgment and Decree of Foreclosure
Against Defendants ALEX, LLC, DONALD DWIGHT HODGE, AND
INFINITY CAPITAL FINANCE CORPORATION (individually referred
to as “Alex”, “Hodge”,
“Infinity” and collectively referred to as
“Defendants”), on March 28, 2019
(“Motion”). ECF No. 29.
Hodge, and Infinity were served with a copy of the Motion,
and did not file an opposition or otherwise respond to the
Motion. The Motion came on for hearing on May 9, 2019, before
the Honorable Rom Trader. Dana A. Barbata and Janjeera S.
Hail appeared on behalf of Loan Funder. Defendant ABRAHAM
ANTONIO RAMOS, JR. represented himself pro se. No. other
party made an appearance, three calls being made at 9:50 am.
careful consideration of the Motion, its supporting
declarations and exhibits, and the record established in this
action, the Court FINDS AND RECOMMENDS that the Motion be
GRANTED IN PART AND DENIED IN PART.
Funder provided financing to Alex for the purchase and
renovation of property located at 3608 Kumulani Street,
Honolulu, Hawaii 96822, designated as Tax Map Key No. (1)
2-9-064-049 (the “Property”). Complaint, ¶
7. To that end, Loan Funder and Alex executed a Promissory
Note dated August 16, 2017 in the amount of $917, 681.00 with
an annual interest rate of 10.99% or 45% per year in the case
of default, and a maturity date of August 15, 2018
(“Promissory Note”). Id. at ¶ 9 and
Exhibit “1”. Hodge executed a Commercial Guaranty
dated August 16, 2017, unconditionally guaranteeing payment
of the Promissory Note (“Guaranty”). Id.
at ¶ 10 and Exhibit “2”. The Promissory Note
is secured by Alex's interest in the Property pursuant to
a Mortgage recorded in the Hawaii Bureau of Conveyances as
Document No. A-64510304 (“Mortgage”).
Id. at ¶11; see also Motion, Exhibit
“3”. Pursuant to the Mortgage, any failure by
Alex to pay any installment payment of principal or interest
under the Promissory Note within five days after it becomes
due and payable constitutes an event of default. Motion,
Exhibit “3”, art. 2.01.
also executed an assignment of leases and rents to Loan
Funder, recorded in the Hawaii Bureau of Conveyances as
Document No. A-64510305 as security for the repayment of the
Promissory Note (“Assignment”). Complaint, ¶
12; Motion, Exhibit “4”.
Funder, Alex, and Hodge executed an Extension Agreement dated
August 15, 2018 to reconfirm the loan obligations and
Guaranty and to extend the maturity of the Promissory Note to
November 15, 2018 (“Extension”). Complaint,
¶ 13; Motion, Exhibit “5”.
Promissory Note matured and is payable in full. On October 4,
2018, Loan Funder submitted a notice of default to Alex
demanding prompt payment in full. Motion, Exhibit
“6”. On January 14, 2019, Loan Funder filed its
Complaint against Alex, Hodge, and Ramos to recover the full
amounts due and owing under the Promissory Note, as secured
by the Guaranty, Mortgage, Assignment, and Extension. Despite
demand for payment, Alex and Hodge have not responded. The
facts stated above are admitted by their default.
See ECF No. 18.
may have or may claim to have an interest in the Property by
virtue of a mortgage dated August 16, 2017, recorded in the
Hawaii Bureau of Conveyances on August 30, 2017 as Document
No. A-64510307. Complaint, ¶ 20. By reason of its
default, Infinity does not dispute Loan Funder's claims.
See ECF No. 21.
Clerk entered default against Defendants pursuant to Rule
55(a) of the Federal Rules of Civil Procedure on February 13,
2019 and February 28, 2019. ECF Nos. 17 and 21. The present
Court may enter default judgment upon application by the
party entitled to the judgment. Fed.R.Civ.P. 55(b)(2).
State Farm Fire & Cas. Co. v. Tan, No. CV
12-00187 SOM-KSC, 2013 WL 3187933, at *1 (D. Haw. June 21,
2013); see also Carlone v. Lion & The Bull Films,
Inc., 861 F.Supp.2d 312, 318 (S.D.N.Y. 2012). Default
judgment may be entered for the plaintiff if the defendant
has defaulted by failing to appear and the plaintiff's
claim is for a “sum certain or for a sum which can by
computation be made certain[.]” Hawaii Glaziers Tr.
Funds v. Island Glazing, Inc., No. CV 13-00448 SOM-RLP,
2014 WL 819208, at *1 (D. Haw. Mar. 3, 2014) (citing to
Fed.R.Civ.P. 55(b)(1), (2)).
court should consider the following factors in deciding
whether to grant a motion for default judgment:
(1) the possibility of prejudice to the plaintiff;
(2) the merits of plaintiff's substantive claim;
(3) the sufficiency of the complaint;
(4) the sum of money at stake in the action;
(5) the possibility of a dispute concerning material facts;
(6) whether the default was due to excusable neglect; and
(7) the strong policy underlying the Federal Rules of Civil
Procedure favoring decisions on the merits.
Hawaii Glaziers, at *2 (citing to Eitel v.
McCool, 782 F.2d 1470, 1470-72 (9th Cir.