United States District Court, D. New Jersey
Fargo Bank, N.A. ("Wells Fargo") sues defendant IPS
Sky Haven, Inc. ("IPS Sky Haven"), a New Jersey
corporation with its principal place of business in New
Jersey. Standard Chartered Bank ("SCB") and
Rockland Trust Company ("RTC") have been terminated
from the case by stipulation of dismissal. (ECF No. 18).
Defendant IPS Sky Haven has not responded to the complaint,
and the Clerk has entered default. (ECF No. 10). Now before
the court is the unopposed motion of plaintiff Wells Fargo
for default judgment. (ECF No. 20). For the reasons stated
herein, the motion for default judgment is granted.
complaint alleges that IPS Sky Haven, a New Jersey
corporation, opened a Simple Business Checking Account
(Account No. XXXXXX3818) with Wells Fargo. (Complaint
("Compl.", ECF No. 1) 1 9). Ismael Pacheco Sierra
was designated as an authorized signer on the Account.
(Compl. ¶ 10).
January 12, 2017, the Account received a wire transfer from
SCB in the amount of $25, 365.00, and from RTC in the amount
of $152, 867.56. (Compl. ¶¶ 11-12). Around January
13, 2017, IPS Sky Haven initiated a transfer to China
Merchants Bank in the amount of $79, 201.00. (Compl. ¶
13). After that transfer and other debit transactions, the
Account had a balance of $82, 205.56. (Compl. ¶ 14).
days later, SCB and RTC notified Wells Fargo that the two
wire transfers into the Account were fraudulent. (Compl.
¶¶ 15-16). SCB and RTC requested that Wells Fargo
recall the wire transfers and return the funds. (Compl.
¶¶ 15-16). Around February 9, 2017, a substantial
portion of the wire transfer out of the Account to China
Merchants Bank was returned to the Account. That return of
funds, in the amount of $79, 161.00, left the Account with a
balance of $161, 366.56. (Compl. ¶ 17).
Fargo restrained that balance of $161, 366.56 (the
"Restrained Proceeds"). (Compl. ¶ 18). IPS Sky
Haven has failed to provide Wells Fargo with any instuctions
regarding the Restrained Proceeds. (Compl. ¶ 19). The
Restrained Proceeds are not sufficient to cover die claims of
both SCB and RTC. (Compl. ¶ 20).
Fargo, which has no claim of its own to the Restrained funds,
then invoked interpleader. It deposited die Restrained
Proceeds into die Court Registry so that SCB and RTC could
assert their claims to the funds. (Compl. ¶ 21). Wells
Fargo then reached a settiement agreement with SCB, RTC, and
other interested parties. (See ECF No. 20-1).
Haven, however, was not a party to the settlement agreement.
Wells Fargo now seeks a default judgment that restrains IPS
Sky Haven from instituting any action against Wells Fargo to
recover the funds at issue in the settlement agreement.
"[T]he 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) (citing
Tozer v. Charles A. Krause Milling Co., 189 F.2d
242, 244 (3d Cir. 1951)). Because the entry of a default
judgment prevents the resolution of claims on the merits,
"this court does not favor entry of defaults and default
judgments." United States v. $55, 518.05 in U.S.
Currency, 728 F.2d 192, 194 (3d Cir. 1984). Thus, before
entering default judgment, the court must determine whether
the "unchallenged facts constitute a legitimate cause of
action, since a party in default does not admit mere
conclusions of law." DirecTV, Inc. v. Asher,
No. 3-cv-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006)
(citing 10A Wright & Miller, Federal Practice
& Procedure § 2688 (3d ed. 1998)).
are deemed to have admitted the factual allegations of the
Complaint by virtue of their default, except those factual
allegations related to the amount of damages." Doe
v. Simone, No. 12-cv-5825, 2013 WL 3772532, at *2
(D.N.J. July 17, 2013). While "courts must accept die
plaintiffs well-pleaded factual allegations as true,"
they "need not accept the plaintiffs factual allegations
regarding damages as true." Id. (citing
Chanel, Inc. v. Gordashevsky, 558 F.Supp.2d 532, 536
(D.N.J. 2008)). Moreover, if a court finds evidentiary
support to be lacking, it may order or permit a plaintiff
seeking default judgment to provide additional evidence in
support of the allegations in the complaint. Id. at
Prerequisites for Entry of Default Judgment
a court may enter default judgment against a defendant, the
plaintiff must have properly served the summons and
complaint, and the defendant must have failed to file an
answer or otherwise respond to the complaint within the time
period provided by the Federal Rules. See ...