United States District Court, D. South Carolina, Florence Division
Bryan Harwell United States District Judge.
matter is before the court on Plaintiff's motion for
default judgment against Defendant. [Doc. 11]. On September
13, 2017, Plaintiff filed her Complaint against Defendant
seeking damages for Defendant's violations of the South
Carolina Unfair Trade Practices Act (“SCUTPA), Fraud,
and Breach of Contract. [Doc. 1]. On October 17, 2017, after
Defendant failed to file an Answer or otherwise defend,
Plaintiff filed a Motion for Entry of Default with the Clerk
of Court. On October 25, 2017, the Clerk of Court entered
default against Defendant. [Doc. 10]. Thereafter, on December
19, 2017, Plaintiff filed her Motion for Default Judgment.
[Doc. 11]. Defendant was served with each of these documents
and, despite the passage of time, has failed to file any
response with this court.
reasons set forth below, the court grants Plaintiff's
Motion in its entirety. It is hereby ORDERED, ADJUDGED, AND
DECREED that judgment be entered against Defendant as set
judgment is available under Rule 55 when a party against whom
a judgment for affirmative relief is sought has failed to
plead or otherwise defend as provided by these rules and that
fact is made to appear by affidavit or otherwise.”
Home Port Rentals, Inc. v. Ruben, 957 F.2d 126, 133
(4th Cir. 1992) (internal quotation omitted). “Rule 55
of the Federal Rules of Civil Procedure authorizes the entry
of a default judgment when a defendant fails ‘to plead
or otherwise defend' in accordance with the Rules.
Although the clear policy of the Rules is to encourage
dispositions of claims on their merits...trial judges are
vested with discretion, which must be liberally exercised, in
entering such judgments and in providing relief
therefrom.” United States v. Moradi, 673 F.2d
725, 727 (4th Cir. 1982)(internal citations omitted).
“A party who is in default and who has not appeared is
deemed to have waived the right to be heard on the assessment
of damages to be awarded by the Court.” Connelly
Mgmt. v. McNicoll, No.: 2:02-CV-2440-PMD-GCK, 2006 U.S.
Dist. LEXIS 97580, at *28 (D.S.C. Mar. 15, 2006).
virtue of its default, Defendant has admitted the factual
allegations set forth in Plaintiff's Complaint and
Defendant is prohibited from contesting said facts as true on
appeal. See DIRECTV, Inc. v. Rawlins, 523 F.3d 318,
322 n.2 (4th Cir. 2008). The Court finds that the following
facts relevant to the causes of action for which Plaintiff
seeks an award of damages:
about November 15, 2016, Plaintiff entered into a contract
with Defendant regarding her New York property. [Doc. 1,
¶9]. Defendant represented to Plaintiff that the
mortgage on her New York home was a predatory mortgage, and
that as a result, Plaintiff was entitled to a lower interest
rate on her mortgage and having the arrearage wiped out.
Id. In reliance on those representations, Plaintiff
paid $16, 785.00 to Defendant for its representation of her
on the New York mortgage. Id. Thereafter, Defendant
reviewed Plaintiff's South Carolina mortgage and informed
Plaintiff that the South Carolina mortgage was also a
predatory mortgage. Id. Defendant told Plaintiff
that, if she paid Defendant $3, 700.00, Defendant would wipe
out any arrearage on the South Carolina mortgage and get the
interest rate lowered. Id. Plaintiff paid Defendant
the $3, 700.00 and entered into a contract with Defendant
regarding her South Carolina property. Id.
Defendant's representation as to the predatory nature of
Plaintiff's mortgages resulted in Plaintiff paying
Defendant a total of $20, 485.00, completely wiping out her
family's life savings. Id.; [Doc 11-1, ¶3].
Defendant also instructed Plaintiff to stop all contact with
the holders of her notes and mortgages, and to stop all
payments on the South Carolina loan. Id. In full
reliance of Defendant's representations and instructions,
Plaintiff ceased all communications with both the New York
and South Carolina lenders, and also stopped making payments
on the South Carolina mortgage. [Doc. 1, ¶10].
advertises to consumers throughout South Carolina and the
entire United States of America. [Doc. 1, ¶11]. On its
website, Defendant specifically states that it connects
consumers “with fully licensed and accredited local
professionals for all of your Mortgage Related Needs.”
Id. Under the “Foreclosure Protection”
section, Defendant advertises that consumer “may select
the applicable real estate or legal professional that will
keep you protected under their umbrella while you complete
the process.” Id. Plaintiff was never
protected by any legal professional employed by Defendant
while she was waiting for Defendant to erase the arrearage on
her mortgages and have the interest rates reduced.
Id. It is Defendant's practice to advertise its
services to homeowners across the country fraudulently
claiming that those homeowners are the victims of illegal and
predatory mortgages, and then defraud said homeowners into
paying Defendant a large retainer agreement so that Defendant
can then allegedly “negotiate” with the
homeowner's lender to help the homeowners escape those
mortgages. [Doc 1, ¶27]. In practice, Defendant does not
represent consumers in rectifying an allegedly illegal
mortgage. Id. Instead, Defendant simply takes the
consumers' money and attempts to negotiate a loan
modification with the lender. Id. After failing to
obtain a loan modification, Defendant washes its hands of
said consumer and instructs the consumer to file bankruptcy.
Id. Defendant has no attorneys licensed to practice
law in New York or South Carolina who can actually represent
Plaintiff, or any other consumer, in a foreclosure action.
Id. at ¶28. Defendant continues to represent
and advertise its services throughout South Carolina and
thus, the actions of the Defendant have a real and
substantial potential for repetition and are a threat to the
public interest. Id. at ¶29.
represented to Plaintiff that it would represent her
concerning her “illegal” and
“predatory” mortgages and, if Defendant was
unsuccessful in getting Plaintiff's mortgages, payments,
or interest rate reduced, it would refund Plaintiff's
retainer fees. [Doc. 1, ¶33]. Defendant's
representations were false. Defendant had no basis for
believing that Plaintiff was in an “illegal” or
“predatory” mortgage and had no intention of
providing Plaintiff with any service. Id. at
¶34. Defendant also had no intention of ever refunding
Plaintiff's retainer fees. Id. Defendant's
representations to Plaintiff were material to her decision to
pay the retainer fees to Defendant. In fact, the only reason
Plaintiff entered into her agreements with Defendant was
because Defendant represented to her that she had been the
victim of “illegal” and “predatory”
mortgages and that Defendant would refund her money if
Defendant failed in remedying her “illegal” and
“predatory” mortgages. Id. at ¶35.
defrauded Plaintiff into paying $20, 485.00 and did not
provide Plaintiff with any of the services promised. After
failing to meet the terms of its own contract, Defendant then
refused to honor its refund policy and refused to return any
amount of money to Plaintiff. [Doc 1., ¶26].
contract entered into between Plaintiff and Defendant
provided for a refund if specific instances of
“successful loss mitigation or debt relief
performance” were not achieved by Defendant. Defendant
failed to achieve the relief that was set forth in the
contract. [Doc. 1, ¶12, ¶13]. Plaintiff and
Defendant entered into two contracts, one concerning her New
York property and the second her South Carolina property.
Id. at ¶43. Defendant breached both contracts
with Plaintiff after failing to provide a refund as provided
in said contracts. Id. at ¶44.
Plaintiff's South Carolina Unfair Trade ...