PATCH OF LAND LENDING, LLC v. SARANNA HOLDINGS, LLC
2:17-cv-00944
D.N.J.Dec 21, 2017Background
- POL Lending (assignee of Patch of Land, Inc.) loaned Saranna Holdings $120,000 on Feb 4, 2015 via a promissory note; Khan personally guaranteed repayment.
- Saranna granted POL a mortgage on 71.5 Virginia Avenue, Jersey City, and executed a security agreement granting a first lien on personal property at the same address; POL perfected those interests.
- Saranna defaulted on payments; POL notified Saranna and Khan of default on Nov 15, 2016 with ten-day cure periods; defaults were not cured.
- POL assigned the loan documents to POL Lending on Dec 7, 2016 and filed suit Feb 13, 2017 asserting breach of note, breach of guaranty, and foreclosure of mortgage and security agreement.
- Defendants were served Apr 3, 2017, did not respond; Clerk entered default Apr 26, 2017. POL moved for default judgment seeking $139,478.62 plus post-judgment interest and foreclosure sale of mortgaged and personal property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter & personal jurisdiction | Diversity jurisdiction exists; property and events in NJ | No response (default) | Court has diversity jurisdiction and personal jurisdiction over defendants |
| Service of process | Defendants were properly served Apr 3, 2017 | No response (default) | Service was proper |
| Liability for breach of note and guaranty | Saranna breached note by failing to pay; Khan breached guaranty; POL Lending is holder and assignee | No response (default) | Well-pled allegations accepted; liability established on breach of note (Saranna) and guaranty (Khan) |
| Validity of mortgage/security & right to foreclose | Mortgage and security agreement were executed and perfected; POL Lending entitled to enforce and foreclose | No response (default) | Mortgage and security agreement valid; foreclosure authorized; sale of mortgaged and personal property ordered |
| Damages and post-judgment interest | Seeks $139,478.62 (as of Apr 30, 2017) plus 14% interest (per diem $79.91) and sale proceeds applied to debt | No response (default) | Judgment entered jointly and severally against Saranna and Khan for $139,478.62 plus $79.91/day until full repayment; sale ordered and deficiency remains collectible |
Key Cases Cited
- Animal Sci. Prods., Inc. v. China Nat’l Metals & Minerals Imp. & Exp. Corp., 596 F. Supp. 2d 842 (D.N.J.) (default-judgment discretion and preference for merits decisions)
- Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532 (D.N.J.) (standards for reviewing default-judgment sufficiency of pleadings)
- Comdyne I, Inc. v. Corbin, 908 F.2d 1142 (3d Cir.) (accept well-pled allegations as true for liability on default)
- Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171 (D.N.J.) (factors to consider before granting default judgment)
- Nationwide Mut. Ins. Co. v. Starlight Ballroom Dance Club, Inc., [citation="175 F. App'x 519"] (3d Cir.) (failure to respond can show culpability)
- Great Falls Bank v. Pardo, 263 N.J. Super. 388 (Ch. Div.) (issues in foreclosure: validity of mortgage, indebtedness amount, mortgagee’s right)