United States v. Cafe Gallery III Inc.
- Analisa Torres
- 1:20-cv-01904
- U.S. District Court · Southern District of New York
- 3
In United States v. Cafe Gallery III Inc., Judge Torres granted the Government’s default-judgment motion and awarded $440,200.71 plus statutory interest.
The judgment affects the United States, which was awarded $440,200.71 plus statutory post-judgment interest, and the defendants Café Gallery III Inc. and Unsuk Lee, against whom the default judgment was entered.
What happened
In United States v. Cafe Gallery III Inc., the Government alleged that Café Gallery III Inc. and Unsuk Lee defaulted on a commercial loan and personal guaranty. Neither defendant answered the complaint, defended the action, or responded to the court’s order to show cause.
The court found that the Government had established the loan, the default, the guaranty, and the amount owed. It awarded $280,562.49 in unpaid principal, $110,207.60 in administrative fees, and $49,430.62 in interest, totaling $440,200.71.
Judge Analisa Torres granted the Government’s motion for default judgment. She also awarded post-judgment interest at the statutory rate and directed the Clerk of Court to close the case.
The detailed version
- United States v. Cafe Gallery III Inc. · No. 1:20-cv-01904
- Analisa Torres
- May 27, 2021
Background
The Government sued Café Gallery III Inc. and Unsuk Lee, alleging that they defaulted on a commercial loan and personal guaranty. The Government moved for a default judgment under Federal Rule of Civil Procedure 55. The Clerk entered certificates of default, and the Court ordered the defendants to show why a default judgment should not be entered. The Government filed affidavits stating that the relevant papers had been personally served on the defendants.
Liability
The defendants did not answer the complaint, otherwise defend the action, or respond to the order to show cause. In a default case, the court treats the complaint’s well-pleaded allegations concerning liability as true. For the loan claim, the Government had to show the existence of the loan, the payment default, and the amount owed. For the guaranty claim, it had to show an absolute and unconditional guaranty, the underlying debt, and the guarantor’s failure to pay.
The Government submitted the loan authorization, note, certificate of indebtedness, and guaranty. The certificate showed $280,562.49 in unpaid principal, $24,870.02 in interest, and $110,207.60 in administrative fees. The Court concluded that the Government had shown its entitlement to judgment on its default claim against the defendants.
Damages and interest
The Court determined damages based on the Government’s submissions. It awarded $280,562.49 in unpaid principal and $110,207.60 in administrative fees. It also awarded $49,430.62 in interest, including interest through August 6, 2020, and additional interest calculated at $49.96 per day until final judgment. The loan’s interest rate was 6.5% at the time of default.
The Court also held that the Government was entitled to post-judgment interest at the statutory rate under 28 U.S.C. § 1961, beginning when the judgment was entered.
Disposition
The Court GRANTED the Government’s motion for default judgment. It awarded a total of $440,200.71, consisting of unpaid principal, administrative fees, and interest, plus post-judgment interest at the statutory rate. The Clerk of Court was directed to close the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.