Clemson Grande Lakefront Condominiums, LLC v. First Financial Equities Commercial, LLC (In re Clemson Grande Lakefront Condominiums, LLC)Clemson Grande Lakefront Condominiums, LLC v. First Financial Equities Commercial, LLC (In re Clemson Grande Lakefront Condominiums, LLC)
ORDER
This matter is before the Court for consideration of an Affidavit of Default (“Affidavit”) filed by Clemson Grande Lakеfront Condominiums, LLC (“Plaintiff’) on June 1, 2012. This adversary proceeding was initiated on January 4, 2012, and a Summons to First Finanсial Equities Commercial, LLC, Transamerica Equities, LLC, and James “Jim” Ludlow, individually (collectively, “Defendants”) was issued on January 5, 2012. Defendants’ Answers were due February 6, 2012, and no Answers were filed with the Court. On May 25, 2012, the Court entеred an Order requiring Plaintiff to explain the absence of progress in the proceeding or to file an affidavit of default and proposed order for judgment within fourteen (14) days. On June 1, 2012, Plaintiff filed an Affidavit of Default and Proposed Order.
Fed.R.Civ.P. 55, made applicable to adversary procеedings by Fed. R. Bankr.P. 7055, provides:
(a) Entering a Default. When a party against whom a judgment for affirmative reliеf is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.
(B)Entering a Default Judgment.
(1) By the Clerk. If the plaintiffs claim is for a sum certain or a sum that can be mаde certain by computation, the clerk — on the plaintiffs request, with an affidavit showing the amount duе — must enter judgment for that amount and costs against a defendant who has been defaulted for not аppearing and who is neither a minor nor an incompetent person.
(2) By the Court. In all other cases, the party must apply to the court for a default judgment. A default judgment may be entered against а minor or incompetent person only if represented by a general guardian, conservаtor, or other like fiduciary who has appeared. If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its reprеsentative must be served with written notice of the application at least 7 days before thе hearing. The court may conduct hearings or make referrals — preserving any federal statutоry right to a jury trial — when, to enter or effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
Thus, obtaining a default judgment is a two-step process. First, an affidavit of default must be filed requesting that the
The Motion for Default Judgment must be denied. The merе fact that a defendant is in default does not entitle the plaintiff to default judgment. In re Rowell,
The adversary Complaint seeks to avoid a fraudulent trаnsfer under 11 U.S.C. § 548(a)(1)(B). The Complaint alleges that on December 3, 2007, Plaintiff transferred $10,000 to Defendants to sеcure a $1,200,000 loan. Plaintiffs chapter 11 petition was filed on November 11, 2011.
11 U.S.C. § 548(a)(1)(B) provides:
(a)(l)The trustee may avoid any transfer (including any transfer to or for the benefit of an insider under an employment contraсt) of an interest of the debt- or in property, or any obligation (including any obligation to or for thе benefit of an insider under an employment contract) incurred by the debtor, that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily—
(B)(i) received less than a reasonably equivalent value in exchange for such transfer or оbligation; and
(ii)(D was insolvent on the date that such transfer was made or such obligation was incurred, оr became insolvent as a result of such transfer or obligation;
(II) was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remаining with the debtor was an unreasonably small capital;
(III) intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such debts matured; or
(IV) made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, undеr an employment contract and not in the ordinary course of business.
Section 548 sets forth sevеral requirements, one of which is that the transfer must have occurred indicates that the transfer at issue occurred on December 3, 2007. The bankruptcy petition was filed November 11, 2011; thus, clearly mоre than 2 years elapsed between the transfer and the date of the bankruptcy filing. As a result, Plаintiff is not entitled to default judgment. Plaintiffs Motion for Default
AND IT IS SO ORDERED.