United States District Court, D. New Hampshire
First Southern National Bank, N.A.
Nick A. Catsam, John A. Catsam, and Joseph Catsam
REPORT AND RECOMMENDATION
K. Johnstone United States Magistrate Judge
First Southern National Bank, N.A. (“First
Southern”) holds a promissory note on which the
borrower defaulted. Defendants Nick A. Catsam, John A. Catsam
and Joseph Catsam (“the Catsams”), executed a
personal Guarantees to help secure the debt underlying the
note. In February 2019, First Southern filed suit to collect
the amount due on the note, asserting claims of breach of
contract, breach of the covenant of good faith and fair
dealing, and unjust enrichment. See Complaint (Doc. No. 1).
The defendants have defaulted. Doc. no. 8. Plaintiff's
unopposed motion for default judgment (Doc. No. 10) is before
the undersigned magistrate judge for a report and
recommendation. For the reasons that follow, the district
judge should grant plaintiff's motion for default
Standard of Review
default is entered and when, as here, the amount at issue is
not a sum certain, “the party must apply to the court
for a default judgment.” Fed.R.Civ.P. 55(b)(2); see
also KPS & Assocs., Inc. v. Designs by FMC, Inc.,
318 F.3d 1, 18-19 (1st Cir. 2003). “Although a defaulting
party admits the factual basis of the claims asserted against
it, the defaulting party does not admit the legal sufficiency
of those claims.” 10 James Wm. Moore, Moore's
Federal Practice § 55.32[b] (3d ed. 2013). Before
entering default judgment, the court must determine whether
“[t]he claimant [has] state[d] a legally valid claim
for relief.” Id.; see also Ramos-Falcon v.
Autoridad de Energia Electrica, 301 F.3d 1, 2 (1st Cir.
virtue of their default, defendants have admitted the
following facts, as set forth in plaintiff's Complaint.
The defendants are members of Raintree Recreational Ventures,
LLC (“RRV”). In 2003 RRV purchased the Newport
Golf Club, forming Newport Golf Club, Inc.
(“NGCI”) to operate the club.
January 30, 2009, RRV and NGCI entered into a loan agreement
with Mascoma Savings Bank (“Mascoma”), for Loan
No. 2038090 in the principal amount of $1, 549, 765.00. In
return, RRV and NGC (collectively “Borrower”)
gave Mascoma a promissory note, whereby Borrower promised to
repay the principal, plus interest calculated pursuant to an
“Interest Calculation Method, ” in ten (10)
years, with a final payment due November 28, 2019. The note
is secured by a mortgage, an assignment of rents and a
fixture filing on real estate located at 112 Unity Road,
Newport, NH (the club's location), and a security
interest in all the business assets of NGCI. The mortgage and
related UCC filings were recorded in the Sullivan County New
Hampshire Registry of Deeds and the New Hampshire Secretary
of State's office.
note is also secured by a “Continuing Guarantee of
Payment and Performance” (the “Guaranty”),
which each of the Defendants executed. The Guaranty provides:
For good and valuable consideration, Guarantor absolutely and
unconditionally guarantees full and punctual payment and
satisfaction of the Indebtedness of Borrower, or any one or
more of them, to Lender, and the performance and discharge of
all Borrower's obligations under the Note and related
Documents. This is a guaranty of payment and performance and
not of collection, so Lender can enforce this Guaranty even
when Lender has not exhausted Lender's remedies against
anyone else obligated to pay the Indebtedness or against any
collateral securing the Indebtedness . . . . Guarantor will
make any payment to Lender or its order, on demand . . . .
Under this Guaranty, Guarantor's liability is unlimited
and Guarantor's obligations are continuing.
Guaranty binds the Guarantor to current and future
“Indebtedness, ” which is defined in relevant
[A]ll of the principal amount outstanding from time to time
and at any one or more times, accrued unpaid interest thereon
and all collection costs and legal expenses related thereto
permitted by law … ‘Indebtedness' includes
… future advances, loans or transactions that renew,
extend, modify, refinance, consolidate or substitute these
debts, liabilities and obligations . . . .
Guaranty is binding on the Guarantor unless and until the
Guarantor revokes it in writing. Any revocation applies only
to new indebtedness created after actual receipt by the
Lender of the Guarantor's written revocation.
defendants each executed a Guaranty, personally guaranteeing
payment of the Indebtedness (“Guarantor” or
collectively the “Guarantors”). Under the
Guaranty, the Guarantors are jointly or severally or jointly
and severally liable for payment of the Promissory Note and
19, 2012, Mascoma sold the Note to First Southern. As part of
that transaction, Mascoma assigned to First Southern the
mortgage, the rents, and the security interests referenced in
its UCC financing statements. The assigned mortgage and UCC
financing statements were filed with the Sullivan County
Registry of Deeds and the New Hampshire Secretary of ...