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United States v. Kephart

United States District Court, W.D. Pennsylvania

March 31, 2015

United States of America, Plaintiff,
v.
Dorothy M. Kephart, Defendant.

REPORT AND RECOMMENDATION

CYNTHIA REED EDDY, Magistrate Judge.

I. RECOMMENDATION

On March 23, 2015, United States of America ("Plaintiff") filed a Motion for Default Judgment [ECF No. 7] against Dorothy M. Kephart ("Defendant"). After careful review of the Complaint [ECF No. 1], the Request for Entry of Default [ECF No. 6], and the Motion for Default Judgment [ECF No. 7], together with the exhibits attached thereto, it is respectfully recommended that Plaintiff's Motion for Default Judgment be granted and the Order set forth at [ECF No. 7-1] regarding damages be entered against Defendant.

II. REPORT

A. Procedural and Factual Background

This action was brought on behalf of the United States of America acting through the Rural Housing Service to foreclose on a Note and Mortgage upon real property situated in Crawford County in the Commonwealth of Pennsylvania and commonly known as 301 Cussewago Street, Conneautville, Pennsylvania. [ECF No. 1, with exhibits A-C]. The Complaint was filed on December 22, 2014, and alleges that Plaintiff made a loan to Defendant, and her deceased spouse Harry M. Kephart, in the sum of $93, 000, payable in monthly installments as evidenced by a Promissory Note dated January 30, 2003. Id . The Note was secured by a mortgage in the sum of $93, 000 ("Mortgage") on the aforesaid property, which was duly recorded on January 30, 2003, in the Recorder of Deeds Office of Crawford County at Record Book 625, page 873. [ECF No. 1, Exhibit B]. During the course of the loan, the Defendant's monthly mortgage payments were subsidized by the Plaintiff. Pursuant to 42 U.S.C. ยง1490(a) and the Real Estate Mortgage, any subsidy received by the Defendant on loans received after January 30, 2003, is subject to recapture upon disposition of the property. The plaintiff is the owner and holder of the Promissory Note and Real Estate Mortgage.

According to the Complaint, Harry M. Kephart died on or about September 10, 2010, leaving Dorothy M. Kephart as the sole surviving owner of the mortgaged premises by operation of law. Defendant is in default under the Note and Mortgage as a result of her failure to make payments when due. As a result of the failure to make payment, Plaintiff accelerated the balance due and Defendant is now in default for failing to pay Plaintiff the accelerated balance. By letter dated April 8, 2014, Plaintiff sent Defendant a Notice of Intention to Foreclose by certified mail to her last known address and to the address of the property. [ECF No. 1, Exhibit C]

The accelerated balance presently due to Plaintiff on the Note is as follows:

Principal and advances $ 80, 514.63 Interest to 07/21/14 $ 10, 376.42 Interest Subject to Recapture $ 29, 579.20 Penalty Charges $ 4, 159.10 Attorney fees $ 1, 500.00

The total amount due and owing is $126, 129.43, together with interest at the rate of 6% per annum to the date of judgment, plus interest from the date of judgment at the legal rate, reasonable attorneys' fees and collection costs.

On December 22, 2014 a copy of the Complaint and a Notice of Lawsuit and Request for Waiver of Service of Summons was mailed to Defendant. Defendant returned an executed Waiver of Service of Summons to Plaintiff's counsel on February 15, 2015. [ECF Nos. 2 and 4]. On March 23, 2015, in light of Plaintiff's failure to answer or assert a defense, Plaintiff filed a Request for Entry of Default as provided by Rule 55(a) of the Federal Rules of Civil Procedure. [ECF No. 6]. Attached to the Request was a declaration under penalty of perjury by Plaintiff's counsel, Attorney Shawn P. McClure, attesting to the aforesaid service by certified mail of Complaint and Notice of Lawsuit and that Defendant returned an executed Waiver of Service of Summons. [ECF No.6-1].

On March 24, 2015, the Clerk of Court entered the Default. [ECF No. 8]. Plaintiff filed a Motion for Default Judgment, pursuant to Rule 55(b)(2) requesting a sum certain total of $126, 129.43, including principal, interest to date, interest credit subject to recapture, penalty charges and attorney fees, together with post judgment interest and reasonable attorneys' fees and collection costs. Plaintiff seeks to sell the subject property to satisfy the judgment. Plaintiff also requests that a judgment in personam be entered ...


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