1

 Plaintiff applied for, and was granted, permission to proceed in this matter

in forma pauperis and for service by the Marshal. (Dkt. 2, 4).

Report and Recommendation

Motion for Default Judgment

1 Seldon v. Lehman; 09-13162

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

VENESSA SELDON, Case No. 09-13162

Plaintiff, Gerald E. Rosen

vs. United States District Judge

LEHMAN BROTHERS, INC., et al, Michael Hluchaniuk

United States Magistrate Judge

Defendant.

 /

REPORT AND RECOMMENDATION

MOTION FOR DEFAULT JUDGMENT (Dkt. 10)

I. PROCEDURAL HISTORY

On August 11, 2009, plaintiff filed a complaint against defendants Lehman

Brothers, Inc. (Lehman), Mortgage Electronic Registration Systems (MERS), and

Freddie Mac. (Dkt. 1). Counsel for defendants MERS and Freddie Mac appeared

and filed an answer to the complaint. (Dkt. 6, 7). No counsel has appeared for

Lehman. 

On November 9, 2009, the United States Marshals Service1

 filed the U.S.

Postal Service Delivery Confirmation Receipt, which included a letter to plaintiff

dated October 29, 2009 from the law firm of Hughes Hubbard. (Dkt. 9). Sarah

Loomis Cave, the author of the letter, wrote that Hughes Hubbard is counsel to
2

 A motion for default judgment is dispositive because it is “substantially

similar to several of the listed motions” is 28 U.S.C. § 636(b)(1)(A). Callier v.

Gray, 167 F.3d 977, 981 (6th Cir. 1999). If a motion is dispositive, a magistrate

judge may issue only proposed findings and recommended dispositions in response

to that motion. See 28 U.S.C. § 636(b)(1)(B). Only a district court judge can issue

a dispositive order. Id. 

Report and Recommendation

Motion for Default Judgment

2 Seldon v. Lehman; 09-13162

James W. Giddens, the Trustee for Liquidation of the business of Lehman, in a

bankruptcy case pending in the Southern District of New York, Case No. 08-8119. 

Id. Ms. Cave informed plaintiff that the New York District Court had entered an

automatic stay on September 19, 2008, which was still in effect. Ms. Cave further

informed plaintiff that the Trustee took the position that her complaint, to the

extent it was filed against Lehman, violated the automatic stay. Ms. Cave

requested that plaintiff withdraw her complaint against Lehman. Plaintiff filed a

motion for default judgment2

 against Lehman, asserting that it had been served by

mail by the Marshals Service and failed to answer the complaint. (Dkt. 10).

This matter is ready for report and recommendation. For the reasons set

forth below, the undersigned RECOMMENDS that the Court DENY plaintiff’s

motion for default judgment. 

II. ANALYSIS AND CONCLUSIONS

The undersigned recommends that the Court deny plaintiff’s request for

entry of default judgment against Lehman because such action would violate the

automatic stay in the pending bankruptcy case. Section 362(a) (1) of the
Report and Recommendation

Motion for Default Judgment

3 Seldon v. Lehman; 09-13162

Bankruptcy Code provides that the filing of a voluntary petition in bankruptcy

stays the commencement or continuation of a judicial proceeding against the

debtor to recover a claim that arose prior to the commencement of the bankruptcy

proceeding. Actions taken in violation of the stay are generally void even where

the creditor has no notice. Smith v. First America Bank (In re Smith), 876 F.2d

524, 525-26 (6th Cir. 1989). A post-petition entry of default judgment is a

continuation of judicial proceeding within the meaning of § 362(a)(1) and is thus a

violation of the automatic stay. In re Vierkant, 240 B.R. 317, 320-21 (B.A.P. 8th

Cir. 1999); see also, Raimondo v. Village of Armeda, 197 F.Supp.2d 833, 839-840

(E.D. Mich. 2002) (Defendant who filed personal bankruptcy before service of the

complaint showed good cause to set aside the clerk’s entry of default because

service of the complaint violated the automatic stay.). Plaintiff has not offered any

evidence that the stay has been lifted. Thus, the filing of this action and an entry of

default judgment would violate the automatic stay put in place by the New York

District Court. 

In addition, the undersigned recommends that the Court deny such request

because no default was first entered by the clerk of the court as required by Rule

55. Wright, Miller & Kane, 10A Fed. Prac. & Proc. Civ.3d § 2682 (“Prior to

obtaining a default judgment under either Rule 55(b)(1) or Rule 55(b)(2), there

must be an entry of default as provided by Rule 55(a).”); Hickman v. Burchett,
Report and Recommendation

Motion for Default Judgment

4 Seldon v. Lehman; 09-13162

2008 WL 926609, *1 (S.D. Ohio 2008) (“entry of default under Rule 55(a) must

precede grant of a default judgment under Rule 55(b).”) (internal quotation marks

omitted, collecting cases). Thus, plaintiff’s motion for default judgment is

procedurally defective and should be denied. 

III. RECOMMENDATION

For the reasons set forth above, the undersigned RECOMMENDS that

plaintiff’s motion for default judgment be DENIED.

s/Michael Hluchaniuk 

Date: March 15, 2010 Michael Hluchaniuk

United States Magistrate Judge

CERTIFICATE OF SERVICE

I certify that on March 15, 2010 I electronically filed the foregoing paper

with the Clerk of the Court using the ECF system, which will send electronic

notification to the following: Courtney D. Roschek and Martin S. Frenkel, and I

certify that I have mailed by United States Postal Service the paper to the following

non-ECF participant(s): Venessa Seldon, Post Office Box 531444, Livonia, MI

48153 and Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York,

New York 10004-1482.

s/Tammy Hallwood 

Case Manager

U.S. District Court

600 Church Street

Flint, MI 48502

(810) 341-7887

tammy_hallwood@mied.uscourts.gov