LG Capital Funding, LLC v. Veriteq Corporation

Background

LG Capital Funding, LLC brought a claim against Veriteq Corporation for breach of a promissory note, or alternatively unjust enrichment. LG Capital sought compensatory damages, costs, expenses, and attorney’s fees. Veriteq was served with the complaint but did not answer, otherwise respond, or appear in the case.

The court entered a default judgment against Veriteq as to liability on March 31, 2022. A default judgment establishes liability because the defendant did not participate; the court then referred the case to Judge Sarah Netburn to determine damages.

Damages Recommendation

Judge Netburn recommended awarding LG Capital the note’s outstanding principal of $49,900.00, regular interest of $3,926.38 accrued through the date of default, and interest on the principal at 16% annually from the date of default through entry of final judgment. She also recommended $3,167.00 in costs and expenses.

Court’s Review and Ruling

Because neither party objected to the report and recommendation, Judge Engelmayer reviewed it for clear error, meaning an obvious mistake apparent from the record. He found no such error and adopted the report in its entirety. The court also stated that the parties’ failure to object waived objections and prevented appellate review of the report’s recommendations.

The court awarded LG Capital $49,900.00 in outstanding principal, $3,926.38 in regular interest through default, and 16% annual interest on the principal from the date of default through entry of final judgment. It also awarded $3,167.00 in costs and expenses. The court directed the Clerk to enter judgment in LG Capital’s favor, terminate the pending motions, and close the case.