United States District Court, D. Utah
MARIA WINDHAM, as Receiver for MARQUIS PROPERTIES, LLC, Plaintiff,
NATHANIEL ROBERT ALLEN, et al., Defendants.
MEMORANDUM DECISION AND ORDER GRANTING IN PART AND
DENYING IN PART MOTIONS FOR DEFAULT JUDGMENTS
N. PARRISH, UNITED STATES DISTRICT COURT JUDGE.
the court are three motions for entry of default judgment
against defendants who have failed to answer the
Receiver's complaint. [Docket 137, 140, 169]. The court
ordered the Receiver to provide additional evidence and
argument in support of its motions. Having reviewed the
Receiver's response, the court addresses each motion for
default judgment below.
court requested additional evidence regarding commission
payments made to Judd Simpson and to provide argument as to
why a default judgment would not be premature in light of
Hunt v. Inter-Globe Energy, Inc., 770 F.2d 145, 147
(10th Cir. 1985) (per curiam). In this opinion, the Tenth
Circuit held that “when one of several defendants who
is alleged to be jointly liable defaults, judgment should not
be entered against him until the matter has been adjudicated
with regard to all defendants, or all defendants have
defaulted.” Id. (quoting 10 C. Wright, A.
Miller & M. Kane, Federal Practice And Procedure §
Receiver responded by providing copies of the checks and wire
transfers supporting her claim to recover $21, 000 in
commission payments from Simpson. The evidence shows that
$20, 000 was paid directly to Simpson as commissions for
convincing individuals to invest in the Ponzi scheme at the
heart of this case. Another $1, 000 was paid to Pro Equity
Homes, allegedly for the benefit of Simpson. The Receiver
sued both Simpson and Pro Equity to recover these amounts,
but only Simpson defaulted.
Receiver argues that it can recover the $1, 000 paid to Pro
Equity from either Pro Equity or Simpson. By definition, this
is joint liability. Under Hunt, therefore, the court
may not enter a default as to the $1, 000 payment until Pro
Equity homes defaults or the claims against it have been
resolved. At this time, the Receiver may only obtain
a default judgment against Simpson for the $20, 000 in
commission payments made directly to him.
Receiver also requested an award of prejudgment interest in
the amount of $2, 956.40. But this interest is calculated
from the full $21, 000 in commission payments. The court
ORDERS the Receiver to provide a prejudgment interest
calculation based upon the $20, 000 paid to Simpson within 14
days of this Order.
THE CHRISTENSEN DEFENDANTS
Receiver seeks a default judgment against Brian Christensen
and Renewable Rentals, LLC, which it refers to collectively
as “the Christensen Defendants, ” in the amount
of $32, 800. [Docket 140.] The Receiver has provided further
evidence showing that this amount is comprised of $12, 800
paid to Christensen, $2, 000 paid to Renewable Rentals, and
$18, 000 paid to Innovative Research, LLC. Christensen and
Renewable Rentals defaulted in this action, but Innovative
Research answered the complaint.
Receiver argues that all of the payments were made for the
benefit of Christensen, so he and Renewable Rentals should be
held accountable for the full amount of these payments. For
the same reasons stated above, however, the court may not
enter a default judgment for the $18, 000 paid to Innovative
Research until the claims against it have been resolved. At
this time, the court may only enter a default judgment
against Christensen for the $12, 800 paid directly to him and
a default judgment jointly against Christensen and Renewable
Rentals in the amount of $2, 000.
Receiver also requested $5, 981.24 in prejudgment interest.
But, once again, the Receiver calculated this interest based
upon the full $32, 800 it requested in its motion. The court
ORDERS the Receiver to calculate separately the prejudgment
interest for the $12, 800 for which Christensen is liable and
the $2, 000 for which Christensen and Renewable Rentals is
the Receiver sought a default judgment against Ryan Farr for
$41, 500 in commission payments made to him. [Docket 169.]
The court requested additional evidence supporting the motion
for entry of a default judgment. In response, the Receiver
produced evidence of $40, 650 in commissions paid directly to
Farr. The Receiver noted that she had accidentally included
an amount paid to another defendant in her initial motion.
Therefore, the Receiver is entitled to a default judgment for
$40, 650 in commissions.
Receiver also requested $7, 461.91 in prejudgment interest.
But this amount is predicated upon the erroneous sum sought
in the motion for a default judgment. The court ORDERS the
Receiver to provide a prejudgment interest calculation based