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Richard Watson Financial, L.L.C. v. Crum

United States District Court, S.D. West Virginia, Charleston Division

January 3, 2017

RICHARD WATSON FINANCIAL, L.L.C., Plaintiff,
v.
WESLEY JOE CRUM, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          JOSEPH R. GOODWIN UNITED STATES DISTRICT JUDGE.

         Pending before the court is the plaintiff's Verified Statement and Accounting Regarding Foreclosure Sale and Motion for Entry of Judgment [ECF No. 21] (“Mot.”) filed on December 1, 2016. The defendants have not filed a response or otherwise made an appearance in this case. For the reasons given below, the plaintiff's Motion is GRANTED.

         I. Background

         On April 22, 2016, the court entered its Amended Order [ECF No. 17], partially granting the plaintiff's Motion for Default Judgment [ECF No. 13] to the extent it requested an Order to permit the plaintiff to repossess and sell certain secured collateral. Am. Order, April 22, 2016, at 8. In its Amended Order, the court stated the following:

The court ORDERS that the plaintiff may sell the equipment in its present condition or following any commercially reasonable preparation or processing in accordance with W.Va. Code § 46-9-610. The court ORDERS that every aspect of the disposition of the equipment, including the method, manner, time, place and other terms, must be commercially reasonable. If commercially reasonable, the plaintiff may dispose of the equipment by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms. See W.Va. Code § 46-9-610(b).
. . .
The court ORDERS that the proceeds from any sale of the equipment be held by the plaintiff's counsel, in trust. Before the plaintiff may apply any proceeds to the defendants' underlying obligations-including reasonable attorney's fees, costs, expenses, interest, etc.-the plaintiff must submit to this court a complete accounting. The court ORDERS the plaintiff to submit this accounting on or before August 15, 2016. Further, the plaintiff must submit a statement regarding the commercial reasonableness of the sale, as defined by West Virginia law, on or before August 15, 2016.

Id. at 7-8. Nevertheless, the plaintiff failed to submit the required information by August 15, 2016, and the court ordered the plaintiff to show cause why it should not be sanctioned for failing to comply with the court's Order. See Order, Aug. 17, 2016 [ECF No. 18]. On August 22, 2016, the plaintiff filed its Verified Statement of Cause and Motion to Expand Time Frame by Ninety Days [ECF No. 19]. The court subsequently granted the plaintiff's motion and ordered that the foreclosure sale occur on or before November 17, 2016. See Order, Sept. 9, 2016 [ECF No. 20]. Additionally, the court ordered the plaintiff to submit an accounting and a statement regarding the commercial reasonableness of the foreclosure sale on or before December 1, 2016. Id. at 2.

         The plaintiff's present Motion and supporting documentation was filed in compliance with the court's previous orders.

         II. Legal Standard

         Rule 55(b)(2) of the Federal Rules of Civil Procedure prescribes the procedure when a judgment is sought against a litigant in default in situations that lie beyond the power delegated to the Clerk under Rule 55(b)(1). Fed. R. Civ. P 55(b)(2). “The court has discretion to decide whether to enter a judgment by default, however, and Rule 55(b)(2) empowers the district judge to hold hearings or ‘order such references as it deems necessary and proper' to aid its exercise of this discretion.” 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2684 (4th ed. 2016) (quoting Fed.R.Civ.P. 55(b)(2)) (footnote omitted). “When a judgment by default is entered, it generally is treated as a conclusive and final adjudication of the issues necessary to justify the relief awarded and is given the same effect as between the parties as a judgment rendered after a trial on the merits.” Id.

         III. Discussion

         On October 24, 2016, the plaintiff sent a Notice of Private Sale to the defendants via Certified Mail, notifying the defendants of the time and location of the sale and inviting them to purchase the collateral. See Mot. Ex. 1, at 2 [ECF No. 21-1] (“Notice”). The collateral was appraised before the sale, and the appraiser determined that the fair-market, private-sale value of the collateral was between $56, 000 and $69, 000. Mot. Ex. 3 [ECF No. 21-1]. On ...


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