United States District Court, D. New Mexico
PROPOSED FINDINGS AND RECOMMENDED
MATTER is before the Court on Defendant CNA Surety's
Motion for Award of Damages. Doc. 59. On November 10, 2016,
Senior United States District Judge Leroy C. Hansen referred
this matter to me to conduct a hearing and issue a report and
recommendation determining the amount of damages. Doc. 56. On
January 20, 2017, I held an evidentiary hearing and received
evidence regarding CNA Surety's alleged damages. For the
following reasons, I find that CNA Surety's Motion should
be granted and that CNA Surety should be awarded $20, 000 in
compensatory damages and $5, 538.93 in attorney's fees
and costs incurred in defending this action.
24, 2015, Plaintiff Jaime Melendez Torres filed suit against
Defendant Juan Altamirano, doing business as Cross Country
Auto (hereinafter Cross Country Auto), and CNA Surety, doing
business as Western Surety Company, based on allegations that
Defendant Altamirano sold Plaintiff a used vehicle which had
more miles on it than the odometer, which had been
fraudulently tampered with, indicated. Doc. 1. On December
14, 2015, Defendant CNA Surety filed its answer and a
cross-claim for indemnification against “Juan
Altamirano d/b/a Cross Country Auto and Juan Altamirano a/k/a
Juan Tamirano-Leon, personally, for Indemnification.”
Doc. 9 at 1, 5. CNA Surety alleged that Juan Altamirano and
Cross Country Auto were issued a bond by CNA Surety and that
Juan Altamirano signed the bond application as an indemnitor.
Doc 9 at 6. CNA Surety alleged that the bond application
provided that Cross Country Auto agreed
To completely indemnify [CNA Surety] from and against any
liability, loss, cost, attorneys' fees and expenses
whatsoever which [CNA Surety] shall at any time sustain as
surety or by reason of having been surety on this bond or any
other bond issued for applicant and or indemnitor, or for the
enforcement of this agreement, or in obtaining a release or
evidence of termination under such bonds, regardless of
whether such liability, loss, costs, damages, attorneys'
fees and expenses are caused, or alleged to be caused, by the
negligence of [CNA Surety].
Doc. 9 at 6-7. The bond further provided that “if [CNA
Surety] shall well and truly comply with the provisions of
[NMSA] Section 66-4-7…then no liability shall attach
to surety on this bond.” Doc. 9 at 7. CNA Surety
accordingly sought indemnification for any damages awarded
against CNA Surety in Plaintiff's favor, any
attorneys' fees and costs, pre-judgment or post-judgment
interest assessed against CNA Surety in favor of Plaintiff,
and any attorney's fees and costs associated with CNA
Surety's defense of Plaintiff's claims and with CNA
Surety's pursuit of its cross-claim. Doc. 9 at 7.
Altamirano did not timely file an answer to Plaintiff's
Complaint. A Clerk's Entry of Default was entered against
Defendant Altamirano on October 29, 2015 but later vacated at
the request of Plaintiff on January 14, 2016. Docs. 7, 15.
Although Defendant Altamirano filed both an unsigned and,
subsequently, a signed answer to Plaintiff's Complaint,
neither he nor Cross Country Auto responded to CNA
Surety's cross-claim in any way. Accordingly, on February
16, 2016, a Clerk's Entry of Default was entered against
Defendant Altamirano and Cross Country Auto as to CNA
Surety's cross-claim. Doc. 22.
fully set out in Chief Magistrate Judge Molzen's Proposed
Findings and Recommended Disposition, Defendant
Altamirano's appearances in this lawsuit have been
sporadic at best. See Doc. 32. Due to Defendant
Altamirano's failure to appear at the Rule 16 Initial
Scheduling Conference, Chief Magistrate Judge Molzen filed an
Order to Show Cause on March 9, 2016 directing Defendant
Altamirano to respond by March 21, 2016, and show cause as to
why sanctions, including default judgment, should not be
imposed as a result of his failure to attend the Initial
Scheduling Conference. Doc. 31. After Defendant Altamirano
failed to respond to the Order to Show Cause, Chief
Magistrate Judge Molzen recommended that default judgment be
entered against Defendant Altamirano due to his failure to
participate in the formulation of the Joint Status Report,
attend the Initial Scheduling Conference, answer or otherwise
respond to Defendant CNA Surety's cross-claims, or
respond to the Order to Show Cause. Doc. 32. After the time
passed for objections without a response from Defendant
Altamirano, Judge Hansen entered an Order Adopting Magistrate
Judge's Proposed Findings and Recommended Disposition and
entered a default judgment against Defendant Altamirano. Doc.
23, 2016, Plaintiff and CNA Surety jointly moved to dismiss
Plaintiff's claims against CNA Surety. Doc 36. CNA Surety
was dismissed as a defendant on June 7, 2016, but remained in
the case as a cross-claimant against Defendants Altamirano
and Cross Country Auto. Doc 37. Thereafter, both Plaintiff
and CNA Surety moved for damages against Defendants
Altamirano and Cross Country Auto and requested a hearing.
Docs. 35, 59. At a status conference held before me on
November 8, 2016, all parties, including Defendant
Altamirano, indicated that a hearing would be appropriate in
lieu of a jury trial on damages. Doc. 55. After this status
conference and before I could hold a damages hearing,
however, Plaintiff settled his claims against Defendants
Altamirano and Cross Country Auto. Doc. 63. Thus, on January
20, 2017, I held a damages hearing on the only remaining
claim - CNA Surety's cross-claim against Defendants
Altamirano and Cross Country Auto. See Doc. 65.
Defendants Altamirano and Cross Country Auto did not respond
to CNA Surety's motion for damages and also failed to
appear at the damages hearing.
default judgment for money damages must be supported by
proof.” Villanueva v. Account Discovery Systems,
LLC, 77 F.Supp.3d 1058, 1075 (D. Colo. 2015).
“Although upon default the factual allegations of a
complaint relating to liability are taken as true, those
allegations relating to the amount of damages suffered
ordinarily is not.” Id. (internal quotation
marks and citation omitted). “It is a familiar practice
and an exercise of judicial power for a court upon default,
by taking evidence when necessary or by computation from
facts of record, to fix the amount which the plaintiff is
lawfully entitled to recover and to give judgment
accordingly.” Two Old Hippies, LLC v. Catch the
Bus, LLC, 277 F.R.D. 448, 460 (D.N.M. 2011) (internal
quotation marks and citation omitted).
noted above, CNA Surety's entitlement to damages flows
from a bond it entered into with Defendants Altamirano and
Cross Country Auto. At the hearing, CNA Surety requested
compensatory damages in the amount of $20, 000 and
attorneys' fees and costs in the amount of $5538.93.
Through the testimony of Christopher Vinatieri, the claims
analyst for CNA Surety who handled this particular claim, CNA
Surety submitted evidence that CNA Surety settled the matter
with Plaintiff for $20, 000. Evidentiary Hearing, Jan. 20,
2017, Audio Tr. 13:50-15:10. Mr. Vinatieri testified that
based upon his review of Plaintiff's claims in this suit,
this amount constituted a fair settlement of the claims.
Audio Tr. 17:30. Because Defendants Altamirano and
Cross-Country Auto failed to appear at the hearing, there is
no evidence in the record to counter Mr. Vinatieri's
testimony. Further, given the fraudulent conduct of
Defendants Altamirano and Cross Country Auto and my review of
the evidence presented, I agree with Mr. Vinatieri's
assessment and recommend awarding CNA Surety $20, 000 in
Vinatieri further testified that CNA Surety hired the West
Law Firm to defend CNA Surety against Plaintiff's claims.
Audio Tr. 15:30. Mr. Vinatieri verified that billing invoices
submitted by the West Law Firm as part of its motion for
damages constituted the true and correct amounts CNA Surety
paid the West Law Firm in defense of Plaintiff's claims.
Audio Tr. 15:45-17:20; Doc. 59-1. I find that the $5538.93
requested is supported by the billing invoices and reasonable
in light of the efforts the West Law Firm expended in
defending this action.
I further recommend clarifying that the default judgment in
this case is entered against both Defendant Altamirano in his
personal capacity and Defendant Juan Altamirano d/b/a Cross
Country Auto. Due to the redundancy of “Juan
Altamirano” in both Defendants' names, there is
some confusion as to whether the default judgment previously
entered against “Defendant Altamirano” applied to
both Defendants. I inquired regarding this issue at the
hearing and, as Ms. Snow clarified, CNA Surety is seeking
default judgment damages against both Juan Altamirano, in his
personal capacity, and Juan Altamirano d/b/a Cross Country
Auto as CNA Surety pled in its cross-claim. Audio Tr. 30:05.
I recommend that the final order entered in this case reflect
this important distinction.