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Bank of America, N.A. v. Hewitt

November 7, 2008

BANK OF AMERICA, N.A., PLAINTIFF,
v.
ROBERT J. HEWITT, DEFENDANT.



The opinion of the court was delivered by: Greenaway, Jr., U.S.D.J.

OPINION

This matter comes before this Court on the motion for entry of default judgment against defendant Robert J. Hewitt ("Hewitt") by plaintiff Bank of America, N.A. ("Bank of America" or "Plaintiff"), pursuant to FED. R. CIV. P. 55(b)(2). For the reasons stated below, this motion shall be denied.

I. FACTS

Bank of America has a properly perfected security interest in a 1994 Maule aircraft, model number MX-7-160, serial number 19023C, Federal Aviation Administration ("FAA") registration number N3034V (the "Aircraft"). (Decl. of Martin Smith ("Smith Decl.") at ¶ 2.) The Aircraft was owned by David A. Baston ("Baston"). (Id. at ¶ 3.) After Baston's death, the Aircraft was surrendered voluntarily to Plaintiff by an authorized representative of Baston's estate, so that Plaintiff could liquidate the Aircraft in accordance with applicable law. (Id.)

After reviewing the FAA records for the Aircraft, Bank of America discovered that on October 14, 2005, Hewitt recorded a "Mechanic's or Materialman's Lien Statement" with respect to the Aircraft (the "Hewitt Lien"). (Id. at ¶ 4.) Hewitt claims an interest in the Aircraft by way of a verbal lease or purchase agreement. (Id.) As a result of this verbal agreement, Hewitt claims to have advanced money to Baston for the benefit of the Aircraft. (Id.) At no time did Hewitt provide the necessary service or products to benefit the Aircraft. (Id. at ¶ 6.)

Plaintiff filed a Complaint against Hewitt on September 21, 2007, seeking a declaratory judgment that Plaintiff has a superior security interest and priority lien on the Aircraft to that of Hewitt. Plaintiff asks this Court to direct Hewitt to release his lien on the Aircraft, or invalidate Hewitt's lien on the Aircraft. Plaintiff also seeks the award of reasonable attorneys' fees and costs.

II. LEGAL STANDARD

Rule 55(b)(2) states:

In all other cases, the party must apply to the court for a default judgment. A default judgment may be entered against a minor or incompetent person only if represented by a general guardian, conservator, or other like fiduciary who has appeared. If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 3 days before the hearing. The court may conduct hearings or make referrals--preserving any federal statutory right to a jury trial--when, to enter or effectuate judgment, it needs 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. "It is well settled . . . that the entry of a default judgment is left primarily to the discretion of the district court." Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984).

"Default establishes the defaulting party's liability for the well-pleaded allegations of the complaint." United States v. Gant, 268 F. Supp. 2d 29, 32 (D.D.C. 2003) (citing Brock v. Unique Racquetball & Health Clubs, Inc., 786 F.2d 61, 65 (2d Cir. 1986)). Default does not establish liability for the amount of damages claimed by the plaintiff. Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974) ("While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation."). "The district court must instead conduct ...


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