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Loan Funder LLC v. Alex, LLC

United States District Court, D. Hawaii

January 6, 2020

LOAN FUNDER LLC, SERIES 2130, Plaintiff,
v.
ALEX, LLC; DONALD DWIGHT HODGE; ABRAHAM ANTONIO RAMOS, JR.; and INFINITY CAPITAL FINANCE CORPORATION, Defendants.

         ORDER READOPTING FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND DECREE OF FORECLOSURE WITH RESPECT TO ALEX, LLC, DONALD DWIGHT HODGE, and INFINITY CAPITAL FINANCE CORPORATION (ECF NO. 37); ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CONFIRMATION OF SALE, DEFICIENCY JUDGMENT, WRIT OF POSSESSION AND MERGER OF NOTICE OF PENDENCY OF ACTION

          SUSAN OKI MOLLWAY UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION.

         This is a foreclosure action in which three of the named Defendants--Alex, LLC, Donald Dwight Hodge, and Infinity Capital Finance Corporation, have defaulted. The fourth Defendant, Abraham Antonio Ramos, Jr., filed an answer in this matter. Ramos filed for bankruptcy, but this court, unaware of that, earlier adopted Magistrate Judge Rom Trader's Findings and Recommendation to Grant in Part and Deny in Part Plaintiff's Motion for Default Judgment and Decree of Foreclosure with Respect to Alex, LLC, Donald Dwight Hodge, and Infinity Capital Finance Corporation, ECF No. 37. That adoption occurred while the bankruptcy stay was in effect. To eliminate any issue on that score, this court here readopts the F&R now that the bankruptcy stay has been lifted.

         Before this court is Plaintiff Loan Funder, LLC, Series 2130's Motion for Confirmation of Sale, Deficiency Judgment, Writ of Possession and Merger of Notice of Pendency of Action, ECF No. 48. That motion is granted except with respect to its request for attorneys' fees and costs, which is denied without prejudice to the filing of a separate motion. With respect to such a motion for attorneys' fees and costs, this court is very concerned with the amount requested and directs the Magistrate Judge to carefully consider those fees and costs before awarding them.

         II. BACKGROUND.

         Alex, LLC, executed a promissory note dated August 16, 2017, for $917, 681.00 as part of a loan from Loan Funder to purchase property in Honolulu, Hawaii. The note had an interest rate of 10.99%, with a default rate of 45%. The note required Alex, LLC, to make interest payments from October 1, 2017, through August 1, 2018, at which time the principal of the note had to be paid. Donald Dwight Hodge and Abraham Antonio Ramos, Jr., executed guarantees to further secure the loan. The note was secured by a mortgage on the property. The note states that it shall be governed by New York law. The Guarantees state that they shall be governed by New Jersey law.

         According to the Complaint, Defendant Infinity Capital may have or may claim an interest in and to the property at issue because of a junior mortgage on the property.

         On January 14, 2019, Loan Funder filed the present action against Alex, LLC, Hodge, Ramos, and Infinity Capital Finance Corporation. See ECF No. 1.

         While Ramos answered the Complaint, the other Defendants did not. Default was entered against Alex, LLC, Hodge, and Infinity Capital (the “defaulted Defendants”). On March 28, 2019, Loan Funder moved for default judgment and a decree of foreclosure with respect to the defaulted Defendants. See ECF No. 29. On May 9, 2019, a hearing was held before Magistrate Judge Rom Trader at which he found and recommended that the motion be granted in part and denied in part. See ECF No. 35. On June 24, 2019, this court, unaware that Ramos had begun bankruptcy proceedings, adopted the unopposed F&R. See ECF No. 41. On December 3, 2019, this court gave Ramos the opportunity to object to this court's readoption of the default judgment F&R, telling Ramos that he would be deemed to have waived any objection to proceedings against the defaulted Defendants if Ramos failed to object. Ramos did not object. Accordingly, this court readopts the F&R and deems Ramos to have waived any right to challenge the propriety of proceeding in this manner.

         III. ANALYSIS.

         On October 30, 2019, Loan Funder filed a motion for confirmation of sale, deficiency judgment, and writ of possession. See ECF No. 48. All Defendants were served with a copy of the motion via U.S. mail at their last known addresses. See ECF No. 48-4. Although this court has expressed concern about the 45% default interest rate, see ECF No. 53, the court nevertheless grants the motion except with respect to its request for attorneys' fees and costs. Loan Funder may submit another motion for fees and costs to the Magistrate Judge assigned to this case.

         A. While the Court is Concerned About the Default Interest Rate, the Defaulted Defendants Have Waived Any Right to Challenge that Rate.

         Because the note and the guarantees state that they shall be governed by New York and New Jersey law, respectively, this court turns to the law of those states with respect to the requested default interest rate. This court has previously ...


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