Matrix Financial Services Corporation v. Hall et al, No. 3:2016cv09438 - Document 29 (S.D.W. Va. 2017)
Court Description: MEMORANDUM OPINION and ORDER GRANTING DEFAULT JUDGMENT and REFORMING DEED OF TRUST granting Matrix Financial Services Corporation's 23 MOTION for Order Granting Default Judgment by the Court against James C. Hall, III and Reforming Deed of Tru st; directing that the Deed of Trust is equitably reformed as more fully set forth herein, effective as of the date the Deed of Trust was first executed, March 31, 2008; further directing that the tax liens recorded by the United States Department of Treasury and the West Virginia Department of Tax and Revenue against defendant Hall are hereby subordinated to the Deed of Trust as reformed by this Order; further directing the Clerk's Office to accept and record a certified copy of this Order to provide notice of the reformation of the Deed of Trust; further directing that this matter be DISMISSED and REMOVED from the docket of the court. Signed by Magistrate Judge Cheryl A. Eifert on 7/25/2017. (cc: James C. Hall, III; counsel of record) (jsa)
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Matrix Financial Services Corporation v. Hall et al Doc. 29 IN TH E U N ITED STATES D ISTRICT COU RT FOR TH E SOU TH ERN D ISTRICT OF W EST VIRGIN IA H U N TIN GTON D IVISION MATRIX FIN AN CIAL SERVICES CORPORATION , Plain tiff, v. Cas e N o .: 3 :16 -cv-0 9 4 3 8 JAMES C. H ALL, III; U N ITED STATES D EPARTMEN T OF TREASU RY, IN TERN AL REVEN U E SERVICE; W EST VIRGIN IA D EPARTMEN T OF TAX AN D REVEN U E, D e fe n d an ts . MEMORAN D U M OPIN ION an d ORD ER GRAN TIN G D EFAU LT JU D GMEN T an d REFORMIN G D EED OF TRU ST Plaintiff Matrix Financial Services Corporation (“Matrix”) filed the instant action seeking an Order from the court reform ing a Deed of Trust. (ECF No. 1). Pending before the Court is Matrix’s Motion for Order Granting Default J udgm ent Against Defendant J am es C. Hall III and Reform ing Deed of Trust, and its Mem orandum of Law in support of its request for entry of default judgm ent against defendant J am es C. Hall, III, (“Hall”). Defendants United States Departm ent of Treasury, Internal Revenue Service, and West Virginia Departm ent of Tax and Revenue do not oppose the requested relief as indicated by the signatures of their respective counsel to the Motion requesting relief. The parties have consented to disposition of this action by a United States Magistrate J udge. (ECF No. 17 at 3). Therefore, for the reasons that follow, the Court GRAN TS the Motion for 1 Dockets.Justia.com Default J udgm ent against J am es C. Hall, III, and further GRAN TS the relief sought by Matrix and consented to by the United States Departm ent of Treasury, Internal Revenue Service, and the West Virginia Departm ent of Tax and Revenue. I. Re le van t H is to ry According to the Com plaint, on March 31, 20 0 8, defendant Hall executed a Deed of Trust, granting a security interest in real property located at 2219 J efferson Avenue, Point Pleasant, West Virginia to secure repaym ent of a loan obtained by Hall from Flagstar Bank. (ECF No. 1). The Deed of Trust explicitly referenced a legal description of the real property, which was supposed to be attached to the Deed of Trust, but when the Deed of Trust was recorded with the Clerk of the County Com m ission of Mason County, West Virginia, the legal description was not attached. (Id.). In 20 11, Flagstar Bank becam e aware that the legal description of the real property was inadvertently om itted when the Deed of Trust was recorded. Therefore, a Corrective Deed of Trust was recorded on J une 10 , 20 11, which had the legal description attached. However, Flagstar Bank failed to obtain Hall’s acknowledgm ent of the Corrective Deed before recording it. (Id.). In Decem ber 20 15, Matrix was assigned the Deed of Trust. Recognizing that Hall’s acknowledgm ent was m issing from the Corrective Deed of Trust, Matrix filed the present civil action seeking to reform the original Deed of Trust recorded in 20 0 8 to attach the legal description that should have been included at the tim e of recording. Matrix claim s that reform ation of the original Deed of Trust will rem ove any potential im pedim ent to title and will allow Matrix to obtain the contem plated benefits of the Deed of Trust. (Id.). Matrix joined the United States Departm ent of Treasury, Internal Revenue Service, and the West Virginia Departm ent of Tax and Revenue as defendants, because each entity has 2 a recorded tax lien against Hall. (Id.). Hall was personally served with the sum m ons and com plaint in this case on Decem ber 13, 20 16. (ECF No. 14). On J anuary 25, 20 17, Hall participated in a Rule 26(f) m eeting, in which he and the other parties consented to resolution of the case by a United States Magistrate J udge. (ECF No. 17 at 3, 5). On February 1, 20 17, the parties stipulated that Hall would have an extension through and including March 1, 20 17 in which to answer or otherwise respond to the com plaint. Despite receiving the extension, Hall never filed a responsive pleading or m otion. On May 30 , 20 17, Matrix filed an application for entry of default. (ECF No. 26). A m otion for entry of default judgm ent was already pending. (ECF Nos. 23). On J une 16, 20 17, the Clerk of Court entered a default as to defendant Hall and sent a copy of the entry of default to Hall at the address on record. (ECF No. 27). However, the entry was returned undeliverable and with no forwarding address. (ECF No. 28). More than five m onths have passed since entry of the parties’ stipulation of extension and m ore than three m onths have passed since Matrix filed its m otion seeking an order of default judgm ent. Consequently, Matrix’s m otion is ready for disposition. II. D is cu s s io n Federal Rule of Civil Procedure 55 sets forth a two-step process for entry of a default judgm ent. First, the plaintiff, or party seeking default judgm ent, m ust request that the Clerk of Court enter a default “[w]hen a party against whom a judgm ent for affirm ative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” Fed. R. Civ. P. 55(a). Second, after entry of default, the plaintiff m ust apply for a default judgm ent. Fed. R. Civ. P. 55(b). When the relief sought is for a sum certain or can be ascertained by com putation, the request for default judgm ent m ay 3 be m ade to the Clerk. However, “[a] plaintiff's assertion of a sum in a com plaint does not m ake the sum ‘certain’ unless the plaintiff claim s liquidated dam ages.” Lopez v. XTEL Const. Grp., LLC, No. CIV. PWG-0 8-1579, 20 11 WL 6330 0 53, at *2 (D. Md. Dec. 16, 20 11). In all other instances, the party seeking default m ust apply to the court, Fed. R. Civ. P. 55(b)(2), and “the com plaint m ust be supported by affidavit or docum entary evidence.” Lopez, 20 11 WL 6330 0 53, at *2. The court m ay conduct hearings on the m otion for default judgm ent when the court needs to “conduct an accounting;” “determ ine the am ount of dam ages;” “establish the truth of any allegation by evidence;” or “investigate any other m atter.” Id. If the party against whom a default judgm ent is sought has appeared personally or by a representative, the party or representative m ust be given seven days’ notice of any hearing. When the party against whom a default judgm ent is sought fails to m ake an appearance or fails to respond to the m otion for default judgm ent, the court m ust determ ine if default judgm ent is appropriate based upon the allegations of the pleading. Ry an v. Hom ecom ings Fin. N etw ork, 253 F.3d 778, 780 -81 (4th Cir. 20 0 1). The court m ust accept well-pleaded factual allegations as true and m ust evaluate whether the allegations support the relief sought. Id. Despite “a strong preference that, as a general m atter, defaults be avoided and that claim s and defenses be disposed of on their m erits,” Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir. 20 10 ), “default judgm ent m ay be appropriate when the adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Law baugh, 359 F. Supp. 2d 418, 421 (D. Md. 20 0 5); Lopez, 20 11 WL 6330 0 53, at *2 (collecting cases). The decision to enter a default judgm ent rests within the sound discretion of the court. Id. (citing Dow v . Jones, 232 F.Supp.2d 491, 494 (D. Md. 20 0 2). 4 Here, Matrix has provided an affidavit and docum entary evidence in support of its Com plaint and Motion for Default J udgm ent. Having reviewed the evidence, the undersigned finds that the allegations of the Com plaint are well supported, and a hearing on the m atter is not necessary. Furtherm ore, the record establishes that defendant Hall was served with the Com plaint and was fully aware of his obligation to respond to the Com plaint no later than March 1, 20 17, but failed to do so. Moreover, Matrix served Hall with the Motion for an Order Granting Default J udgment and Reform ing Deed of Trust on April 25, 20 17, and Hall has m ade no effort to oppose the m otion. Accordingly, the Court GRAN TS the m otion for entry of default judgm ent against defendant Hall. III. Ord e r Re fo rm in g D e e d o f Tru s t an d D is m is s in g Actio n The Court hereby GRAN TS judgm ent in favor of Matrix and ORD ERS as follows: With the consent of defendants United States Departm ent of Treasury and West Virginia Departm ent of Tax and Revenue, the Deed of Trust executed March 31, 20 0 8 by defendant J am es C. Hall III and recorded April 4, 20 0 8, in the Office of the Clerk of the County Com m ission of Mason County, West Virginia, at Book 339, Page 726 is equitably reform ed to attach as Exhibit “A” or otherwise include the legal description, which shall read: Situate in the City of Point Pleasant, Mason County, West Virginia, and m ore particularly bounded and described as follows to-wit: Being Lot No. Ten (10 ) in Block “T” as designated on the plat of North Point Pleasant which said plat is of record in the Office of the Clerk of the County Court of Mason County, West Virginia in Deed Book 70 , at Page 168. and it is further ORD ERED that, by stipulation and agreem ent, the tax liens recorded by the United States Departm ent of Treasury and the West Virginia Departm ent of Tax and 5 Revenue against defendant Hall are hereby subordinated to the Deed of Trust as reform ed by this Order; and it is further ORD ERED that the above reform ation is effective as of the date the Deed of Trust was first executed, March 31, 20 0 8; and it is further ORD ERED that the Clerk’s Office is D IRECTED to accept and record a certified copy of this Order to provide notice of the reform ation of the Deed of Trust as noted above. Lastly, because reform ation of the Deed of Trust resolves all m atters in controversy, the Court ORD ERS that this m atter be D ISMISSED and REMOVED from the docket of the court. The Clerk is instructed to provide a copy of this Order to J am es C. Hall, III, and to counsel of record. EN TERED : J uly 25, 20 17 6
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