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United States v. Native Link, LLC

United States District Court, E.D. Washington

April 17, 2018

NATIVE LINK, LLC, a Delaware limited liability company; NATIVE LINK CONSTRUCTION, LLC, a Delaware limited liability company; PATRICK L. NOLAN, a Canadian citizen; and MELINDA ANN WALK, a Washington State resident now known as Melinda Thompson, Defendants.



         BEFORE THE COURT, without oral argument, is a motion by the United States for default judgment against Defendants Patrick Nolan, Native Link, LLC (“Native Link”), and Native Link Construction, LLC (“Native Link Construction”), and for summary judgment against Defendant Melinda Ann Walk, who represents that she is now known as Melinda Ann Thompson. ECF No. 14. Ms. Thompson, the only Defendant to appear and answer the complaint in this matter, did not respond to the motion for default and summary judgment. Having reviewed the United States' motion, supporting declarations, and the remaining record, the Court finds that judgment shall be entered for the United States against all Defendants for the reasons that follow.


         The United States filed this action on November 30, 2016, to recover funds that the United States guaranteed when Defendants took out a loan for a maximum draw amount of $750, 000 in 2014 for their business ventures. See ECF No. 1 at 1- 2. The United States provided a ninety percent guaranty for Defendants' loan to the lending bank. Defendants Ms. Thompson and Mr. Nolan personally guaranteed the loan. ECF No. 1-1 at 38-44.

         Both the guaranty and the promissory note provided that the borrowers agreed to pay, in the event of default and to the extent permitted by law, “all expenses of collection, enforcement or protection of [the lender's] rights and remedies under” the documents relating to the debt. ECF No. 1-1 at 43.

         As Ms. Thompson admitted in her answer, the parties defaulted on the loan in or around October 2015. See ECF Nos. 1 at 6; 10 at 2; see also ECF No. 1-1 at 46, 54. After the lender bank unsuccessfully tried to collect from Defendants, the bank submitted a claim to the United States for the guaranteed portion of the loan. The United States paid the guaranty to the bank, and the bank assigned its rights in the loan to the United States. ECF No. 1-1 at 53-56.

         As of September 13, 2016, Defendants were indebted in the amount of $351, 877.75 to the United States. ECF No. 5-1 at 1. In January 2017, Defendants agreed to provide the chattel securing the loan to the United States to sell at public auction and apply the proceeds, less the auction costs, to their debt. See ECF No. 5-1. After the United States auctioned off the equipment, Defendants owed a balance of $281, 843.14, as of February 13, 2018. ECF No. 16-2 (Certificate of Indebtedness).

         Ms. Thompson answered the United States' complaint on January 26, 2018. In Ms. Thompson's answer, she agreed that she had executed a promissory note, that she had personally guaranteed the loan, and that Defendants had defaulted on payments for the loan. ECF No. 10 at 2. Ms. Thompson disputes the Government's allegation that she owes attorney's fees. Id.


         Default Judgment

         A court may exercise its discretion to order default judgment following the entry of default by the Clerk of the Court. Fed.R.Civ.P. 55(b); see also Local Rule (“LR”) 55.1; Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (“The district court's decision whether to enter a default judgment is a discretionary one.”).

         The Ninth Circuit has prescribed the following factors to guide the district court's decision regarding the entry of a default judgment: “(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

         Once the Clerk of Court enters default, the well-pleaded allegations of the complaint, except those concerning damages, are deemed true. Fed.R.Civ.P. 8(b)(6); see TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). In conjunction with moving for default judgment, Plaintiff must provide evidence of all damages sought in the complaint, and the damages sought must not be different in kind or exceed the amount demanded in the pleadings. Fed.R.Civ.P. 54(c).

         In addition, the party seeking the entry of a default judgment must file an affidavit setting forth: (1) whether the party against whom judgment is sought is an infant or an incompetent person, as required by Fed.R.Civ.P. Rule 55(b); (2) that the Service members Civil Relief Act of 2003 does not apply; (3) that written notice of the motion was served on the defaulting party if the party appeared personally or by a ...

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