HSBC Bank, N.A. v. PAKs Holdings, LLC

Background

Judge Gardephe had entered a default judgment against Anthony Riccardi on August 28, 2020, and against Patricia Riccardi and PAKS Holdings LLC on October 22, 2020. A default judgment is a judgment entered when a defendant fails to participate in the case. Judge Gardephe referred the case to Magistrate Judge James L. Cott to conduct a damages inquest, meaning a proceeding to determine the amount of money, if any, the plaintiff may recover.

Evidence Required for Damages

Judge Cott explained that a defendant’s failure to appear does not automatically establish the amount of damages. HSBC had to submit admissible evidence—evidence that may properly be considered by the court—sufficient to establish damages with reasonable certainty. The order required HSBC to serve the defendants and file proposed findings of fact and conclusions of law concerning all damages and other monetary relief permitted by the default judgments by November 20, 2020.

The proposed findings had to connect each damages figure to the legal claims for which liability had been established, explain how HSBC calculated each figure, and cite supporting affidavits or documents. An affidavit is a written statement made under oath. Any factual assertions about liability had to cite the complaint. HSBC also had to provide an affidavit from someone with personal knowledge addressing liability, the proposed damages, and facts supporting the court’s authority over the defendants and the subject matter of the case.

Attorney’s Fees, Costs, and Procedure

Any request for attorney’s fees had to include contemporaneous time records listing each attorney’s service dates, hours, and work performed. Counsel also had to provide each attorney’s years of bar admission, hourly rate, any appropriate fee charts, the legal basis for the requested fees, and documents supporting any requested costs. HSBC could submit a memorandum of law instead of conclusions of law to explain the legal principles supporting its damages, interest, fees, or costs.

The defendants’ responses, if any, were due by December 11, 2020. The court notified the parties that it might conduct the damages inquest solely from written submissions. A party seeking an evidentiary hearing had to explain why written submissions were insufficient and identify the witnesses and evidence that would be presented.

Disposition

Judge James L. Cott’s order set the schedule and proof requirements for the damages inquest. It did not award a specific amount of damages or decide any request for attorney’s fees or costs. The opinion does not state the legal claims underlying the default judgments or the amount HSBC intended to seek.