LG Funding LLC v. Florida Tilt Inc.
U.S. District Court, Eastern District of New York
15 CV 631 (July 15, 2015)
A default judgment was entered against a man who personally guaranteed credit extended to his business. The business, Florida Tilt Inc. (FTI), suffered from financial hardship, which is why it sought credit from LG Funding LLC in the first place.
When FTI breached the credit agreement, LG Funding filed a debt collection lawsuit against the personal guarantor. Although the guarantor did not file an answer to the debt collection case, FTI did file for bankruptcy protection, and the Bankruptcy Code’s automatic stay provision did stop collection agency lawsuits pending in court.
Eventually, the company’s bankruptcy stay was lifted, at which time the judge entered default judgment against the guarantor. In doing so, the judge noted the company’s bad conduct in diverting money it received to alternate bank accounts, instead of depositing those funds as specified in the corporate funding agreement.
Entry of the default judgment against the guarantor was made pursuant to Federal Rule of Civil Procedure 55, upon the creditor demonstrating:
Defendant’s default in Answering the debt collection summons & complaint
Defendant’s failure to appear after entry of default against him
Plaintiff’s unopposed factual allegations and evidence satisfy the
Many debt collection defendants are unaware of the extensive terms and conditions included in a defaulted loan agreement enforced by the debt collector LVNV Funding.
However the creditor is not required to prove the Defendant’s actual awareness of any particular provision breached. A successful claim for failure to comply with credit terms requires the Plaintiff to show:
The parties entered into a valid contract
The lender performed under the contract as required
The borrower breached the contract by failing to pay the amounts due
The lender has sustained a loss from the borrower’s default.
If a default judgment lawyer takes you to court for failing to pay as promised, let us review the credit card contract breached and discuss options to fight, dismiss or settle your case.