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Susquehanna Commercial Finance, Inc. v. Michael E. French D/B/A Hiram Waste and Recycling

May 5, 2011

SUSQUEHANNA COMMERCIAL FINANCE, INC.
v.
MICHAEL E. FRENCH D/B/A HIRAM WASTE AND RECYCLING, ET AL.



The opinion of the court was delivered by: Surrick, J.

MEMORANDUM

Presently before the Court is Plaintiff's Motion for Default Judgment. (ECF No. 8.) For the following reasons, the Motion will be granted.

I. BACKGROUND

Plaintiff Susquehanna Commercial Finance is a Pennsylvania corporation. Defendants Michael E. French and Laura D. French are residents of Texas. Plaintiff and Michael E. French executed two Commercial Finance Agreements ("Loan One" and "Loan Two"). Under Loan One, Plaintiff loaned $112,170 to French for his acquisition of various items of equipment.*fn1

(Compl. ¶ 5, ECF No. 1.) Under Loan Two, Plaintiff loaned $23,370 to French also for his purchase of equipment.*fn2 (Id. ¶ 7.) Laura D. French signed personal guaranty agreements guaranteeing the performance of Michael E. French under both loans. (Id. ¶¶ 6, 8; id. Exs. B, C.) Plaintiff perfected a security interest in the equipment by duly filing two UCC financing statements. (Id. ¶¶ 9, 10; id. Exs. D, E.) Plaintiff alleges that French has been in default on his monthly payments since July 30, 2010, for Loan One, and August 6, 2010, for Loan Two. Plaintiff alleges that it is owed a total of $80,043. (Id. ¶ 12.)

On December 23, 2010, Plaintiff filed a Complaint, which seeks payment from Michael E. French (Count I) and Laura D. French (Count II) and recovery of the equipment through a replevin action (Count III). On January 28, 2011, Plaintiff filed the instant Motion for Default Judgment. Defendants have not appeared, answered or otherwise responded to Plaintiff's Complaint or Motion. Default was entered by the Clerk of Court on January 31, 2011. The following facts are established by the record in this case.

On January 4, 2011, John Hankenhof, a process server located in Plano, Texas, served a copy of the Summons and Complaint upon Defendants at 17 Wimbledon Court, Heath, Texas, 75032. (Hankenhof Affs. I, II, ECF Nos. 3, 4.) This address matches the billing address listed in both loan agreements. After knocking on the door at 17 Wimbledon Court, a man, who was approximately 50-60 years old, opened the door. Hankenhof asked the man if he was "Michael E. French d/b/a Hiram Waste and Recycling." The man responded that he was Michael E. French. Hankenhof immediately served him with the Summons and Complaint. Hankenhof then asked if Laura D. French was home. Michael E. French responded that she was not. At that point, a woman, approximately 40-50 years old, appeared at the door and asked "What's that about?" Hankenhof completed service on Laura D. French by handing a copy of the Summons and Complaint to her husband, Michael E. French, at their home.

On January 28, 2011, Plaintiff's counsel, Brian C. Engelhardt, submitted an affidavit asserting that Defendants were properly served with a copy of the Summons and Complaint. (Engelhardt Aff., ECF No. 5.) In his affidavit, Engelhardt also states that on January 13, 2011, he received a voicemail message from Robert Fehrle, an employee in the Office of the Clerk of Court. Fehrle advised that the clerk's office had received the original papers that had been served upon each Defendant, accompanied by a cover letter signed by a "Michael T. French." The letter, which is addressed from 17 Wimbledon Ct., Heath, Texas 75032, states:

I, Michael T. French, received papers for my parents and they no longer live here. I bought this house a year ago from them when they decided to move to east Texas. Michael E. French and Laura French no longer live here. I do not see them that often due to the fact that they travel. Please do not contact me or send anything to them here. Thank you for your attention to this matter. (Id. Ex. G.)

In support of the statements made in the Hankenhof affidavit, Plaintiff has submitted redacted copies of Defendants' drivers' licenses, which show that Michael E. French was born in 1951 and Laura D. French was born in 1962. (Id. Ex. H.) These dates of birth place Defendants in the age range estimated by Hankenhof in his affidavit. Plaintiff has also submitted a copy of the public tax information for Defendants' property at 17 Wimbledon Court. (Id. Ex. I.) The records identify Defendants as being the owners of this property.

On March 30, 2011, Plaintiff filed a motion requesting that service of the Motion for Default Judgment be by first-class mail. (ECF No. 11.) In support of the motion Plaintiff filed an affidavit of attempted service by John Hankenhof. In the affidavit Hankenhof states that on March 9, 2011, at 11:42 am, he attempted to personally serve Defendants with the Motion for Default Judgment and related documents. (Hankenhof Aff. III, ECF No. 12.) Hankenhof states that he went to the 17 Wimbledon Court address and knocked on the door. He observed an individual inside who was about to answer the door, but then heard a woman's voice direct the individual not to answer. At that time Hankenhof took a photograph of the license plate of a Chevrolet Suburban that was parked outside the home. (Id. Ex. 1.) The records of the Texas Department of Motor Vehicles reveal that Michael E. French is the owner of the Chevrolet Suburban. (Id. Ex. 2.) The motor vehicle records also identify French's address as 17 Wimbledon Court. The affidavit further states that on March 10, 2011, at 5:43 pm, Hankenhof returned to the 17 Wimbledon Court premises. No one answered. On March 12, 2011, at 12:25 pm, Hankenhof again returned to the property and no one answered the door when he knocked. Hankenhof observed the same Chevrolet Suburban outside the home on this occasion. Based on this information, we granted a motion for alternative service of process for the Motion for Default Judgment. (ECF No. 14.) On April 5, 2011, Plaintiff's counsel submitted an affidavit stating that he sent the Motion and related documents to Defendants by first-class mail. (ECF No. 13.)

Plaintiff's Motion for Default Judgment is now ripe for disposition.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) authorizes the entry of a default judgment upon application to the court by a party. In determining whether to grant a default judgment, courts examine three factors: 1) prejudice to the plaintiff if default is denied; 2) whether the defendant appears to have a litigable defense; and 3) whether the defendant's delay is due to culpable conduct. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). "[T]he factual allegations of the complaint, except those relating ...


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