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LPP Mortgage Ltd. v. Taz, Inc.

United States District Court, S.D. Mississippi, Eastern Division

August 28, 2014

LPP MORTGAGE LTD., Plaintiff,
v.
TAZ, INC. f/k/a CHAPMAN SYSTEMS, INC., CHARLES BRUCE CHAPMAN, and VICTOR LYNN CHAPMAN, Defendants.

MEMORANDUM OPINION AND ORDER

KEITH STARRETT, District Judge.

This matter is before the Court on the Plaintiff LPP Mortgage Ltd.'s Motion for Default Judgment as to Victor Lynn Chapman [10]. Having considered the motion, the record, and the applicable law, the Court finds that the motion should be granted in part and denied in part.

I. BACKGROUND

On March 19, 2014, LPP Mortgage Ltd. ("LPP") filed suit against TAZ, Inc. f/k/a Chapman Systems, Inc. ("TAZ"), Charles Bruce Chapman, and Victor Lynn Chapman in this Court. ( See Compl. [1].) Subject matter jurisdiction is asserted on the basis of diversity of citizenship under Title 28 U.S.C. § 1332. The Complaint indicates that LPP is a Texas limited partnership, that TAZ is an administratively dissolved Mississippi corporation, and that the individual Defendants are adult resident citizens of Mississippi. The Complaint requests damages well in excess of $75, 000.

LPP alleges that the Defendants are liable for breach of contract pursuant to the terms of a Note and certain Guaranties. The following facts and circumstances alleged in the Complaint underlie this contention. On or about November 8, 1997, TAZ executed and delivered a Note [1-2] in favor of the U.S. Small Business Administration ("SBA") in the principal sum of $306, 600.00 and maturing on November 8, 2027. Also on or about November 8, 1997, Charles Bruce Chapman ("Chapman") and Victor Lynn Chapman ("Victor") both executed Guaranties [1-3] in favor of the SBA and its successor and assigns in consideration of the SBA's loan to TAZ. In accordance with their Guaranties, Victor and Chapman unconditionally guaranteed prompt "payment when due, whether by acceleration or otherwise, of the principal and interest and all other sums payable, or stated to be payable, with respect to the Note, together with the reasonable costs and expenses incurred to enforce and collect the same including, without limitation, attorneys' fees and costs." (Compl. [1] at ¶ 9.) The Defendants also executed two Deeds of Trust to secure financing from the SBA. One Deed of Trust [1-4] pledged certain property located at 1104 Broad Street, Columbia, Mississippi, 39429 (the "Broad Street Property") as collateral. The other Deed of Trust [1-5] pledged certain property located at 703 Park Avenue, Columbia, Mississippi, 39429 (the "Park Avenue Property") as collateral. In or about August of 2000, the SBA assigned the Deeds of Trust and the Note to LPP. LPP is the current owner of the Note.

LPP alleges that the Defendants went into default under the terms and conditions of the Note, Deeds of Trust, and/or Guaranties by failing to make timely payments of principal and interest. LPP subsequently declared the entire indebtedness immediately due and payable, and initiated foreclosure proceedings on the Broad Street Property and Park Avenue Property (collectively referred to as the "Real Property Collateral") after the Defendants failed to cure the default. LPP asserts that the Park Avenue Property was sold to the highest bidder for $46, 852.00 on March 22, 2013, while the Broad Street Property was sold to the highest bidder for $182, 000.00 on November 8, 2013. LPP contends that a deficiency balance remains on the Note despite the foreclosure sales of the Real Property Collateral.

The Complaint seeks a judgment against the Defendants, jointly and severally, for the remaining deficiency owed and "all costs incurred by LPP in connection with the enforcement of the loan documents, including reasonable attorneys' fees." (Compl. [1] at ¶ 20.) LPP calculated the total due as of Mach 11, 2014, at $154, 157.48.

The docket reflects the following time line of events pertinent to the subject motion:

(i) On April 14, 2014, Victor Lynn Chapman was served with process. ( See Doc. No. [7].)
(ii) On May 8, 2014, LPP moved for the Clerk's entry of default as to Victor Lynn Chapman. ( See Doc. No. [8].)
(iii) On May 9, 2014, the Clerk's Entry of Default [9] was entered as to Victor Lynn Chapman.
(vi) On June 11, 2014, LPP filed its Motion for Default Judgment as to Victor Lynn Chapman [10].

LPP now requests a default judgment in the amount of $160, 350.35, "representing the principal, interest, attorneys' fees, and legal and collection expenses owed to LPP as of May 27, 2014, plus any applicable pre-judgment interest or postjudgment interest...." (Mot. for Default J. [10] at p. 3.) LPP has submitted an affidavit from Tom Martin (a portfolio manager for CLMG Corp., who is LPP's authorized loan servicer) and from James J. McNamara IV (one of its attorneys) in support of the requested default judgment. ( See Martin Aff. [10-1]; McNamara Aff. [10-2].) The affidavit executed by LPP's legal counsel states, inter alia, "that Victor Lynn Chapman is not currently on active ...


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