J.D. Holdings, LLC v. BD Ventures, LLC
766 F. Supp. 2d 109
D.D.C.2011Background
- Plaintiff loaned $500,000 to the defendants on Nov 1, 2006 for Baltimore real property development.
- Amendment on Dec 1, 2008 extended maturity to July 1, 2009; Laettner and Davis personally guaranteed.
- Defendants failed to repay after amendment; default notice issued July 2, 2009.
- Plaintiff filed suit Nov 5, 2009 for breach of contract, damages, interest, and fees; defendants served but did not appear.
- Settlement with Davis and Laettner reached June 3, 2010; BD Ventures was a third-party beneficiary but not a party to the settlement.
- Settlement included a Confession of Judgment provision authorizing judgment if default occurred; Davis and Laettner failed to meet settlement terms, triggering default.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Default judgment against BD Ventures warranted? | BD Ventures breached amended note; no appearance; settlement did not release BD Ventures. | BD Ventures not a party to settlement and contested entry of default. | Default judgment against BD Ventures granted. |
| Confession of judgment available against Davis and Laettner? | Settlement allowed confession to secure Full Amount Claimed. | Federal rules do not authorize confession judgments; DC rules apply. | Confession judgment available; DC rules applied. |
| Amount of judgment and post-judgment fees? | Total due per settlement and confession; plus additional fees if applicable. | No opposition or clarification provided. | Judgment total of $671,309.74; potential for additional amounts within 10 days. |
Key Cases Cited
- Int'l Painters and Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56 (D.D.C. 2008) (default judgment standard; relief when unresponsive party)
- FDIC v. Deglau, 207 F.3d 153 (3d Cir. 2000) (confession judgments are a state-law device with no federal analogue)
- Costin v. Hollywood Credit Clothing Co., 140 A.2d 696 (D.C. 1958) (confession judgments should be scrutinized but binding when voluntary and signed)
- D.H. Overmyer Co. v. Frick Co., 405 U.S. 174 (U.S. 1972) (recognizes constitutionality of confession judgments in certain factual situations)