United States District Court, M.D. Florida, Orlando Division
DALTON JR. UNITED STATES DISTRICT JUDGE.
Federal Trade Commission (“FTC”)
commenced this action against Defendants Dequan M. Sicard
(“Sicard”) and Hardco Holding
Group, LLC, S&H Financial Group, Inc., and Daryl M. Hall
under the Federal Trade Commission Act, 15 U.S.C. §
53(b) (“FTCA”) and Fair Debt
Collection Practices Act, 15 U.S.C. § 16921(a)
(“FDCPA ”) alleging that they
engaged in a scheme to defraud consumers. (Doc. 1
(“Complaint”).) Among other
things, the FTC sought temporary, preliminary, and permanent
injunctive relief and restitution. (Id. ¶ 1.)
properly being served, Sicard failed to timely answer or
otherwise respond, so the FTC sought the clerk's entry of
default against him. (Doc. 51.) That was granted (Doc. 52),
and following Sicard's continued failure to timely defend
the action, the FTC moved for default judgment against him
and requested entry of a permanent injunction against Sicard.
(Doc. 69 (“Motion).)
referral, U.S. Magistrate Judge Thomas B. Smith recommended
granting the Motion in part, by entering a permanent
injunction against Sicard and finding him jointly liable with
Co-Defendants for $702, 059.00. (Doc. 70
(“R&R”).) Sicard, currently
incarcerated and proceeding pro se, did not object
to the R&R, but separately filed a motion for relief from
default judgment and the Court's order entering a
permanent injunction against Co-Defendants-which did not
apply to Defendant. (Doc. 72
(“Response”).) The FTC opposed,
construing the Response as an objection to the R&R. (Doc.
74.) The Court agrees that the Response should be construed
as an objection, and, on de novo review, finds that the
R&R is due to be adopted and the Response denied.
party objects to a magistrate judge's findings, the
district court must “make a de novo determination of
those portions of the report . . . to which objection is
made.” 28 U.S.C. § 636(b)(1). The district court
“may accept, reject, or modify, in whole or in part,
the findings or recommendations made by the magistrate
judge.” Id. The district court must consider
the record and factual issues based on the record independent
of the magistrate judge's report. Ernest S. ex rel.
Jeffrey S. v. State Bd. of Educ., 896 F.2d 507, 513
(11th Cir. 1990).
commenced this action on July 10, 2017, alleging that Sicard
and Co-Defendants engaged in a pattern of deceptive and
abusive debt collection practices that defrauded consumers of
more than $690, 000. (Doc. 1, ¶¶ 1 2 -2 7 .) With
the Complaint, the FTC moved ex parte for a
temporary restraining order (Doc. 4
(“TRO”)), which the Court
granted that same day (Doc. 15.) The FTC also sought a
preliminary injunction against all defendants, which the
Court set for a hearing. (Id. ¶¶ XXIV.)
Before that hearing, the FTC filed a consent motion with
Co-Defendants stipulating to the entry of a preliminary
injunction. (Doc. 27.) At the hearing-where Sicard did not
appear, despite notice and an opportunity to appear
telephonically-the Court addressed the proposed preliminary
injunction and inquired about the appointed Receiver's
opinion about its sufficiency. (Doc. 32.) Finding it
sufficient, the Court then preliminarily enjoined
Co-Defendants and separately entered a preliminary injunction
against Sicard. (Docs. 35, 36.)
case progressed, and Co-Defendants filed an answer to the
Complaint. (Doc. 39.) Sicard did not. At the appropriate
time, the FTC moved for an entry of default against Sicard
(Doc. 51), which was granted (Doc. 52.) Co-Defendants and the
FTC then moved to stay the case pending consideration of a
settlement agreement (Doc. 57), which the Court allowed (Doc.
59). The case against Co-Defendants was therefore
administratively closed. (See id.)
November 20, 2017, Sicard submitted his first filings in the
case: (1) a motion seeking to extend his time to answer the
Complaint until May 9, 2018; and (2) a motion to dissolve the
then-defunct Temporary Restraining Order. (Docs. 60, 61.)
Finding Sicard's extension motion deficient, Magistrate
Judge Smith denied Sicard's request in a comprehensive
order that explained filing procedures, given Sicard's
pro se status. (Doc. 61.) Following this, Sicard
made no attempt to file a corrected version of that motion.
The FTC the moved for default judgment against Sicard (Doc.
64), which Magistrate Judge Smith denied without prejudice
based on a computational error (Doc. 68).
the FTC reached a stipulated permanent injunction with
Co-Defendants and moved for the Court's approval. (Doc.
66.) This was granted, so resolving all claims against
Co-Defendants. (Doc. 67.) Turning its efforts toward Sicard,
the sole remaining defendant, the FTC renewed its motion for
default judgment with a corrected judgment amount. (Doc. 69.)
As support, the FTC relied on the facts alleged in its
Complaint-which Sicard admitted by virtue of his default-to
establish his participation in a debt collection scheme that
violated the FTCA and FDCPA. (Doc. 69-1, pp. 3-7.) Sicard, as
a key perpetrator of the scheme, was liable for these
violations along with Co-Defendants, so the FTC argued it was
entitled to injunctive and equitable monetary relief.
(Id. at 8-10.) The FTC also contended that the scope
of its proposed order for permanent injunctive relief was
appropriate in light of Sicards conduct. (Id. at
10-14.) Sicard failed to respond.
Judge Smith then issued his R&R finding default judgment
against Sicard appropriate and recommending that the Court
issue the permanent injunction. (Doc. 70.) On careful review,
however, he found that the FTC's proposed monetary
judgment did not reflect the joint and several nature of
Sicard's liability with Co-Defendants. (Id. at
9-10.) Rather, he found that the FTC's proposed judgment-
seeking $702, 059 from Sicard, the same amount it sought from
Co-Defendants-ran afoul of the “one satisfaction
rule” and would allow for duplicative recovery.
(Id. at 10.) To cure this, Magistrate Judge Smith
recommended modifying the judgment against Sicard by finding
him jointly liable with Co-Defendants for $702, 059 and leave
collection matters outside the terms of the judgment.
did not object to the R&R, but Sicard filed a motion
seeking relief from default judgment and the entry of a
permanent injunction. (Doc. 72.) The FTC responded in support
of the R&R. The matter is therefore ripe for review.
seems to generally oppose the entry of default and opposes
the FTC's motion for default judgment against him, as
well as the entry of a permanent injunction against him.
(Id.) His Response does not address the R&R, but
the Court will nonetheless construe this as an
objection. Upon review, the Court finds Sicard's
arguments unavailing. Thus the R&R is due to be adopted
and Sicard's Response denied.
Entry of Default
Rule of Civil Procedure 55(a) allows entry of default against
a party who has failed to plead or otherwise defend. Entry of
default may be set aside for “good cause, ” which
is a variable standard that takes into account whether: (1)
the default was culpable or willful; (2) the defaulting party
has a meritorious defense; or (3) the defaulting party acted
promptly to correct the default. See F.R.C.P. 55(c);
Compania Interamericana Export-Import, S.A. v. Compania
Dominicana de Aviacion, 88 F.3d 948, 951 (11th Cir.
1996). “[I]f a party willfully defaults by displaying
either an intentional or reckless disregard for judicial
proceedings, the court need make no other findings in denying
relief.” Id. at 951- 52 (citation omitted).
entry of default was warranted because Sicard failed to
answer or otherwise defend this action. (See Docs.
51, 52.) Nonetheless, Sicard seeks to set this a side,
claiming: (1) “excusable neglect” due to his
current incarceration; (2) “meritorious
defenses”; and (3) “due diligence.” (Doc.
72.) But none of these arguments demonstrate good cause to
set aside the entry of default. Rather, the Court finds that
Sicard willfully defaulted by failing to timely respond to
the FTC's numerous filings, despite knowledge of this
proceeding and the FTC's diligent attempts to induce his
cooperation. (See, e.g., Doc. 21 (FTC filing a
motion on Sicard's behalf to allow him to appear
telephonically at a hearing, which Sicard did not attend);
Doc. 45 (reflecting FTC performed in-person service for
Sicard).) Thus, the entry of default against Sicard remains.
the Court finds that default judgment is appropriate here.
Under Federal Rule of Civil Procedure 55(b)(2), a court may
enter default judgment against a properly-served defendant
who fails to appear or otherwise defend an action against
him. Through default, a defendant “admit[s] the
plaintiff's well-pleaded allegations of fact” for
liability purposes. Buchanan v. Bowman, 820 F.3d
359, 361 (11th Cir. 1987). So long as the factual allegations
of the complaint provide a sufficient legal basis to support
entry of default judgment, a court may do so. See Eagle
Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d
1298, 1307 (11th Cir. 2009). To that end, a complaint must be
founded on “ well-pleaded allegations.”
as established above, Sicard failed to answer or otherwise
defend this action. Therefore, default is appropriate so long
as the Complaint's allegations are well-plead. Against
this standard, the Complaint clearly suffices. It alleges
that Sicard, along with Co-Defendants, engaged in a scheme to
defraud consumers “through the collection of payments
for debts that consumers do not actually owe or that
Defendants do not have authority to collect” since at
least June 2015. (Doc. 1, ¶ 12.) It details how the
scheme operated, Sicard's role, and how such conduct
violates the FTCA and FDCPA. (See Id. ¶¶
9, 12-44.) All in all, the Complaint's well-pleaded
allegations support default judgment against Sicard and none
of Sicard's previously-discussed arguments persuade the
established that default judgment is appropriate here, the
only remaining issue is what relief to award. The FTC seeks
equitable relief in the form of injunctive and monetary
relief, as provided for by § 13(b) of the FTCA, 15
U.S.C. § 53(b), and Section 814(a) of FDCPA, 15 U.S.C.
§ 16921(a), to prevent Sicard from engaging in a variety
of behavior related to debt collection. (See Docs.
1, ¶ 46; 64-4.) Looking at the Complaint and the
Court's findings when it issued the TRO, preliminary
injunction, and stipulated order entering a permanent
injunction against Co-Defendants, Magistrate Judge Smith
found the injunctive relief acceptable, and the monetary
judgment appropriate to the extent Sicard is held jointly and
severally liable with Co-Defendants for $702, 059. (Doc. 70,
pp. 8-10.) Sicard has not rebutted this finding. Therefore,
the Court finds that both injunctive and monetary relief are
appropriate to the extent identified in the R&R.
Permanent Injunction and Monetary Relief
Court, having considered the memoranda and exhibits filed in
support of said motion, and all other pleadings and files in
this action, and now being fully advised in the premises,
GRANTS the FTC's Motion and HEREBY ORDERS, ADJUDGES, AND
DECREES as follows:
FTC brings this action pursuant to Section 13(b) of the FTC
Act, 15 U.S.C. § 53(b), and Section 814 of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692l. The FTC seeks both permanent
injunctive relief and disgorgement of unjust enrichment for
alleged deceptive and unfair acts or practices by Defendant
Sicard in connection with the collection of purported
FTC has the authority under Section 13(b) of the FTC Act and
Section 814 of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692l, to
seek the relief it has requested.
Court has jurisdiction over the subject matter of this action
and has jurisdiction over Defendant Sicard. Venue in the
Middle District of Florida is proper, and the Complaint
states a claim upon which relief may be granted against
Defendant Sicard under Section 13(b) of the FTC Act and
Section 814 of the Fair Debt Collection Practices Act
(“ FD CPA”), 15 U.S.C. § 1692l.
activities of Defendant Sicard, as alleged in the Complaint,
were in or affecting commerce, as defined in Section 4 of the
FTC Act, 15 U.S.C. § 44. Defendants are “debt
collectors” collecting “debts, ” as those
terms are defined in Sections 803(6) and 803(5) of the FDCPA,
15 U.S.C. §§ 1692a(6) and (5).
Process and service of process as to Defendant Sicard is
Defendant Sicard is not an infant or an incompetent or in
military service or otherwise exempted under the
Soldiers' and Sailors' Civil Relief Act of 1940.
Defendant Sicard failed to file a timely answer or otherwise
file any timely response to the Complaint. Accordingly,
Defendant Sicard is in default.
Since at least 2015, Defendants, acting in common enterprise,
operated a multi-million dollar debt collection scheme that
successfully swindled over $700, 000 dollars from
unsuspecting and terrified consumers. Defendants contacted
consumers and third parties falsely claiming that a lawsuit
had been filed against the consumer. When consumers tried to
learn more about the purported lawsuits, Defendants'
collectors threatened consumers with arrest or other legal
action if they did not send funds for a purported payday loan
or other debt. In fact, either consumers did not owe any debt
or, in situations where consumers did have an outstanding
debt, Defendants had no authority to collect that debt. In
either case, Defendants merely pocketed the money they
collected from intimidated consumers.
alleged in Counts I, II, V(a), V(b), V(c), V(d), and V(e) of
the Complaint, in numerous instances, Defendants used false
and misleading representations to collect debts, including
claiming that consumers were delinquent on a payday loan or
other debt that Defendants had authority to collection;
consumers had a legal obligation to pay Defendants; consumers
would be arrested for failing to pay; and Defendants had
filed or would file legal action against consumers. These
misleading representations were likely to mislead consumers
acting reasonably under the circumstances. Therefore,
Defendants' practices constitute a deceptive act or
practice in violation of Section 5(a) of the FTC Act, 15
U.S.C. § 45(a). In making these representations,
Defendants also (a) misrepresented the character, amount, or
legal status of a debt in violation of Section 807(2)(A) of
the FDCPA, 15 U.S.C. § 1692e(2)(A); (b) misrepresented
that any individual is an attorney or that any communication
is from an attorney in violation of Section 807(3) of the
FDCPA, 15 U.S.C. § 1692e(3); (c) misrepresented that
nonpayment of a debt would result in the arrest or
imprisonment of any person or the seizure, garnishment,
attachment, or sale of any property or wages of any person in
violation of Section 807(4) of the FDCPA, 15 U.S.C. §
1692e(4); (d) threatened to take any action that could not
legally be taken or that was not intended to be taken in
violation of Section 807(5) of the FDCPA, 15 U.S.C. §
1692e(5); and (e) used false representations or deceptive
means to collect or attempt to collect a debt in violation of
Section 807(10) of the FDCPA, 15 U.S.C. § 1692e(10).
alleged in Count III of the Complaint, in numerous instances,
Defendants engaged in unlawful communications with third
parties in violation of Section 805(b) of the FDCPA, 15
alleged in Count IV of the Complaint, in numerous instances,
Defendants placed telephone calls to consumers without
meaningful disclosure of their identity in violation of
Section 806(6) of the FDCPA, 15 U.S.C. § 1692d(6).
alleged in Count V(f) of the Complaint, in numerous
instances, Defendants failed to disclose in their initial
communications with consumers that the debt collector is
attempting to collect a debt and that any information
obtained would be used for that purpose, and failed to
disclose in subsequent communications that the communication
was from a debt collection, in violation of Section 807(11)
of the FDCPA, 15 U.S.C. § 1692e(11).
alleged in Count V(g) of the Complaint, in numerous
instances, Defendants used business, company, or organization
names other than their true names in violation of Section
807(14) of the FDCPA, 15 U.S.C. § 1692e(14).
alleged in Count VI of the Complaint, in numerous instances,
Defendants failed to provide consumers with required
validation notices in violation of Section 809(a) of the
FDCPA, 15 U.S.C. § 1692g(a).
Defendant Sicard is the de facto principal and
manager of the Corporate Defendants. He is listed as the vice
president of Defendant S & H Financial Group, Inc. on
corporate records, and as the president on merchant account
applications. He has signatory authority over the Corporate
Defendants' bank accounts and their telephone service.
Defendant Sicard formulated, directed, controlled, had the
authority to control, or participated in ...