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First National Bank of Pennsylvania v. Oceanic Protective Services, LLC

United States District Court, W.D. Texas, San Antonio Division

May 31, 2019

FIRST NATIONAL BANK OF PENNSYLVANIA, Plaintiff,
v.
OCEANIC PROTECTIVE SERVICES, LLC, STEPHEN R. HILL, and VICTORIO E. CASTILLO, Defendants.

          ORDER ON MOTIONS FOR DEFAULT JUDGMENT

          XAVIER RODRIGUEZ UNITED STATES DISTRICT JUDGE

         On this date, the Court considered Plaintiff's motions for default judgment against Oceanic Protective Services, LLC (docket no. 17) and against Stephen R. Hill and Victorio E. Castillo (docket no. 22). After careful consideration, Plaintiff's motions are GRANTED.

         Background

          Plaintiff First National Bank of Pennsylvania filed its complaint on February 15, 2019, alleging Defendants Oceanic Protective Services, LLC (“Oceanic”), Stephen Hill, and Victorio Castillo defaulted on two promissory notes. Docket no. 1.

         On September 30, 2015, Oceanic executed Small Business Administration Notes of $510, 000 (“Note 1”) and $75, 000 (“Note 2”) and delivered them to a predecessor to Plaintiff, Yadkin Bank.[1] Id. at 3. The same day, Hill and Castillo each executed agreements unconditionally guaranteeing payment of both notes, rendering themselves jointly and severally liable for the obligation. Id. at 4. Plaintiff alleges Defendants last made the required monthly payments on January 30, 2018, and on July 24, 2018, Plaintiff notified Defendants of their defaults. Id. at 7. This Default Notice informed Defendants that Plaintiff was accelerating the amounts owed under the notes. Id. Plaintiff alleges Defendants have not paid and now owe $476, 461.51 on Note 1 and $67, 517.39 on Note 2. Id. at 8.

         Plaintiff brings claims for breach of contract against Oceanic and guarantors Hill and Castillo. On February 27, 2019, Plaintiff filed a return of service indicating Oceanic was served, docket no. 9, and after Oceanic did not answer or otherwise respond the Court ordered Plaintiff to move for entry of default and default judgment, docket no. 10. Plaintiff moved for entry of default against Oceanic, docket no. 11, and then for default judgment, docket no. 17.

         As to Hill and Castillo, Plaintiff filed a motion for substituted service after eight unsuccessful attempts to serve these defendants. Docket no. 12. This motion included a known residence at which Plaintiff believed Hill and Castillo could be found. Id. The Court granted this motion and ordered that the summons be left with anyone over the age of 16 at this address and that a copy be mailed First Class to this address. Docket no. 13. Plaintiff filed returns of service for Hill and Castillo, docket nos. 14, 15, and moved for entry of default, docket no. 18. Plaintiff then moved for default judgment against Hill and Castillo. Docket no. 22.

         Legal Standard

         Pursuant to Rule 55(a), a default judgment is proper “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” However, in considering any motion for default judgment, a court must examine jurisdiction, liability, and damages. The Court examines each in turn.

         Analysis

         I. Jurisdiction

         When a party is seeking entry of default judgment under Rule 55, “the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.” System Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001) (quoting Williams v. Life Savings and Loan, 802 F.2d 1200, 1203 (10th Cir. 1986)).

         Federal courts have subject matter jurisdiction over any civil action that involves a question of federal law, or where there is diversity of citizenship between the parties and the amount in controversy exceeds $75, 000. For diversity jurisdiction to be proper, the “court must be certain that all plaintiffs have a different citizenship from all defendants.” Getty Oil Corp., a Div. of Texaco, Inc. v. Insur. Co. of N.A., 841 F.2d 1254, 1258 (5th Cir. 1988). The party asserting federal jurisdiction must “distinctly and affirmatively allege” the citizenship of the parties. Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001); see also Mullins v. Test America, Inc., 564 F.3d 386, 397 (5th Cir. 2009).

         A corporation is a citizen of its state of incorporation and the state where its principal place of business is located, 28 U.S.C. § 1332(c)(1), and a natural person is a citizen of the state where the person is domiciled. The citizenship of an LLC, however, depends on the citizenship of all its members. Tewari De-Ox Systems, Inc. v. Mountain States/Rosen, LLC, 757 F.3d 481, 483 (5th Cir. 2014); Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008) (“All federal appellate courts that have addressed the issue have reached the same conclusion: like ...


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