Wright v. CrossCountry Mortg.

1

ANTHONY ARAGON WRIGHT, Plaintiff, v. CROSSCOUNTRY MORTGAGE, LLC,Defendant.

No. 2:23-cv-383-JLB-KCD

United States District Court, M.D. Florida, Fort Myers Division

February 21, 2024

REPORT & RECOMMENDATION

Kyle C. Dudek United States Magistrate Judge

Before the Court is Plaintiff Anthony Wright's Motion for Entry of Default Judgment against CrossCountry Mortgage, LLC. (Doc 79).^[1] A clerk's default was entered against CrossCountry (Doc 28) because it did not answer despite having been served (Doc. 10). CrossCountry also failed to respond to the pending motion, and the time to do so has passed.

Having reviewed Wright's motion and the complaint, the Court recommends entering default judgment as to CrossCountry's liability under Florida Consumer Collection Practices Act (“FCCPA”). The Court further recommends awarding Wright $1,000 in statutory damages while deferring judgment on actual and punitive damages until an evidentiary hearing can be held. Additionally, Wright's request for attorney's fees and costs is premature under Local Rule 7.01. Thus, the Court recommends directing him to move separately for those fees. Finally, the Court recommends dismissing Wright's Fair Credit Reporting Act (“FCRA”) claim because it has been abandoned.

I. Background

The Court takes the facts below from the complaint, which are admitted by CrossCountry's default. Wright had the misfortune of buying a home just before Hurricane Ian arrived and damaged it. (Doc. 1 ¶¶ 26-28.) The hurricane also caused him to lose wages and incur emergency expenses, making it difficult to afford his mortgage payments. (Id. ¶¶ 30-33.) Wright relayed these concerns to his lender, CrossCountry, which recommended he seek relief through its forbearance program. (Id. ¶ 34.) Wright applied and was granted a forbearance, suspending his mortgage payments for three months. (Id. ¶¶ 3436, 38.) But CrossCountry never honored the forbearance. According to Wright, CrossCountry wrongfully tried to collect the mortgage and reported him in default. (Id. ¶¶ 170-84.) Wright's credit score and standing were thereby reduced. (Id. ¶ 75.)

This lawsuit under the FCRA and FCCPA followed. Despite having been served, CrossCountry did not answer or otherwise appear, and the Clerk has entered a default against it. (Docs. 10, 28.) That brings us to the current motion. Wright now seeks a final judgment against CrossCountry. (Doc. 79.)

II. Legal Standard

“When a defendant has failed to plead or defend, a district court may enter judgment by default.” Golembiewski v. Waters Pointe Apartments, LLC, No. 823CV00081KKMAEP, 2023 WL 4931218, at *2 (M.D. Fla. June 27, 2023). “The Federal Rules of Civil Procedure establish a two-step process for obtaining default judgment.” Petition of Daytona Beach Aqua Safari, Inc. v. Castle, No. 6:22-CV-740-CEM-DCI, 2023 WL 2329090, at *1 (M.D. Fla. Feb. 10, 2023). First, when a defendant “fails to plead or otherwise defend,” the Clerk enters default. Id. By defaulting, the defendant admits the well-pleaded factual allegations in the complaint. Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009). “Second, after obtaining [a] clerk's default, the plaintiff must move for default judgment.” Daytona Beach Aqua Safari, Inc., 2023 WL 2329090, at *1.

“Before entering default judgment, the court must ensure that it has jurisdiction over the claims and parties, and that the well-pled factual allegations in the complaint, which are assumed to be true, adequately state a claim for which relief may be granted.” Golembiewski, 2023 WL 4931218, at *2. “The validity of an order of a federal court depends upon that court's having jurisdiction over both the subject matter and the parties.” Nu Image, Inc. v. Does 1-3,932, No. 2:11-CV-545-FTM-29, 2012 WL 1890829, at *2 (M.D. Fla. May 24, 2012).

III. Discussion

A. Subject Matter Jurisdiction

Wright claims CrossCountry violated the FCRA and the FCCPA. (Doc. 1 ¶ 170-184.) The Court has original jurisdiction over Wright's claim under the FCRA because it presents a federal question. 28 U.S.C. § 1331. And the Court has supplemental jurisdiction over his FCCPA claim because it “arise[s] out of a common nucleus of operative fact” and “form[s] part of the same case or controversy.” Williams v. Monroe Cnty. Dist. Att'y, 702 Fed.Appx. 812, 815 (11th Cir. 2017); Lucero v. Trosch, 121 F.3d 591, 597 (11th Cir. 1997). Thus, the Court has subject matter jurisdiction over these proceedings.

B. Personal Jurisdiction

“The Due Process Clause . . . protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations.” Thomas v. Brown, 504 Fed.Appx. 845, 847 (11th Cir. 2013). Thus, before entering default judgment, the Court must assure itself that service was proper, Florida's long-arm statute reaches CrossCountry, and maintenance of the suit would not offend due process. Golembiewski, 2023 WL 4931218, at *3. If any of these requirements are missing, the default judgment against CrossCountry would be void. Nu Image, Inc., 2012 WL 1890829, at *2.

1. Wright Properly Served CrossCountry

Rule 4(h) governs service on a corporation. It provides Wright could serve CrossCountry by delivering copies of the summons and complaint to its registered agent. Fed.R.Civ.P. 4(h)(1)(B).

CrossCountry is a citizen of Delaware. According to the Delaware Secretary of State's website, its registered agent is The Corporation Trust Company in Wilmington, Delaware. See Delaware Department of State, Division of Corporations, File Number 7633475. Wright's return of service attests that a copy of the summons and complaint were served on Robin Hutt Banks, an “intake manager” for the Corporation Trust Company. (Doc. 10 at 3.) This establishes a prima facie case of proper service. Udoinyion v. The Guardian Sec., 440 Fed.Appx. 731, 735 (11th Cir. 2011); see United States v. Formoso, No. 6:22-CV-1639-RBD-EJK, 2022 WL 17738710, at *1 (M.D. Fla. Dec. 16, 2022) (finding proper service on the defendant's registered agent under Rule 4(h)(1)(B) when the complaint was left with the agent's intake specialist).

2. This Court has Specific Personal Jurisdiction Over CrossCountry Under Florida's Long-Arm Statute

CrossCountry is a citizen of Delaware and Ohio. But that does not place CrossCountry beyond this Court's reach. Florida's long-arm statute empowers this Court to exercise jurisdiction over citizens of other states. Two sections apply here.

First, “[t]he long-arm statute confers personal jurisdiction over nonresidents who [c]ommit[ ] a tortious act within [Florida].” Sean Dawkins v. Blue Dart Ventures, LLC, Steven Craig Mitchem, & Joshua Lane Mitchem, No. 8:20-CV-2353-MSS-TGW, 2021 WL 2823454, at *2 (M.D. Fla. Apr. 1, 2021). “[F]irmly established precedent interprets this provision to apply to defendants committing tortious acts outside the state that cause injury in Florida.” Id.

Second, citizens of other states who “own or hold a mortgage or lien on real property within [Florida]” are subject to this Court's jurisdiction if “the plaintiff's claim arose from” the defendant's ownership of that mortgage or lien. § 48.193(1)(a)(3) Fla. Stat. (2023); Wells Fargo Equip. Fin., Inc. v. Bacjet, LLC, 221 So.3d 671, 674 (Fla. Dist. Ct. App. 2017). “For a plaintiff's claim to arise from the defendant's actions, there must be a direct affiliation, nexus, or substantial connection between the basis for the plaintiff's claim and the defendant's activity in the state.” Bacjet, LLC, 221 So.3d at 674.

The long-arm statute empowers this Court to exercise jurisdiction over CrossCountry under either section. Violations of the FCCPA are tortious acts. Dawkins, 2021 WL 2823454, at *3. And Wright alleges CrossCountry violated the FCCPA when it mismanaged the mortgage it held on his property in Florida. (Doc. 1 ¶ 26). As a result, the complaint alleges enough facts to bring CrossCountry within this Court's orbit.

3. Exercising Jurisdiction over CrossCountry Would Not Offend Due Process

Determining whether jurisdiction over CrossCountry offends due process is a distinct analysis from defining the reach of Florida's long-arm statute. CJS Sols. Grp., LLC v. Tokarz, No. 3:20-CV-65-MMH-JRK, 2021 WL 848159, at *9 (M.D. Fla. Mar. 5, 2021). And “the Court must engage in the [Eleventh Circuit's] three-part due process analysis” before exercising jurisdiction over CrossCountry. Id.

The test “examines: (1) whether [Wright]'s claims arise out of or relate to at least one of [CrossCountry]'s contacts with the forum; (2) whether [CrossCountry] purposefully availed [it]self of the privilege of conducting activities within [Florida], thus invoking the benefit of [Florida]'s laws; and (3) whether the exercise of personal jurisdiction comports with traditional notions of fair play and substantial justice.” Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1355 (11th Cir. 2013). Wright bore the burden of establishing the first two factors. Id. CrossCountry was responsible for the third. Id.

The first factor is satisfied. Wright obtained a mortgage loan from CrossCountry for his home in Florida. CrossCountry granted him forbearance after Hurricane Ian but never honored it. Instead, CrossCountry sought to collect payment through phone calls and letters, increasing Wright's monthly payments to cover the “principal, interest and late fees” from the three months the loan was in forbearance, and threatening to “withhold the insurance proceeds from the damage caused to Plaintiff's home by Hurricane Ian.” (Doc. 1 ¶¶ 49-51, 126-31, 171.) These allegations form the foundation of Wright's FCCPA claim. And they form a direct causal relationship between...