Javelin Global Commodities Ltd. v. Blubaugh

Background

Javelin Global Commodities (UK) Ltd. filed an unopposed motion to enter the defendants’ confession of judgment. The requested judgment amount was $2,500,000, plus interest at the maximum judgment rate permitted under New York law from the date judgment was entered.

Michael A. Blubaugh signed the declaration of confession of judgment for himself and Kingdom Coal LLC and Double Mountain Mining LLC. Scott Haire signed it for KC II Holdings LLC. The declaration stated that the defendants consented to the Southern District of New York’s subject-matter and personal jurisdiction for enforcing the settlement agreement, authorized Javelin to file the declaration, and agreed that $2,500,000 was a fair and reasonable amount of damages against them jointly and severally. The defendants also conceded that judgment should be entered for $2,500,000 and argued that post-judgment interest should be 9% under New York law, beginning on the date of entry.

Court’s analysis

The court explained that the Federal Rules of Civil Procedure do not specifically address entry of judgment by confession, but that a federal court may enter such a judgment when it has subject-matter jurisdiction and the confession was made knowingly and voluntarily. New York law permits a judgment by confession based on an affidavit executed by the defendant, and federal courts generally require a motion seeking entry of the judgment.

The court found subject-matter jurisdiction under the diversity statute because Javelin is a private limited company established under the laws of England and Wales with its principal place of business in the United Kingdom; Blubaugh is a citizen of Texas; and the three defendant limited liability companies are Wyoming companies with principal places of business in Texas. The court also found that the amount in controversy exceeded $75,000 and that the confession was knowingly and voluntarily made. It concluded that the confession contained the information required by New York Civil Practice Law and Rules § 3218(a), including the amount for which judgment could be entered.

The court further stated that parties may contractually agree to a post-judgment interest rate different from the federal rate when their intent is clear and unequivocal. It found that the confession explicitly made New York law applicable and that both parties agreed the New York rate was 9%, which the opinion described as $616.44 per day on the judgment amount.

Disposition

The court ordered that Javelin’s motion was GRANTED. It directed the clerk to terminate the motion and the defendants’ filing identified as ECF Nos. 22 and 26 and to enter judgment in favor of Javelin for $2,500,000.00, plus interest accruing at the rate of 9% per day starting from the date judgment was entered.

The order contains an apparent wording inconsistency: its earlier discussion describes 9% as the applicable New York post-judgment rate and calculates $616.44 per day, while the final directive states “9% per day.”