Overcasher, Jr. v. Stratus Financial LLC

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
In Re:
David Russell Overcasher, Jr.,
Debtor.
David Russell Overcasher, Jr.,
Plaintiff,
v.
Stratus Financial LLC,
Defendant.
) 	Case No. 25-61672
)
) 	Chapter 7
)
) 	Adv. Pro. No. 26-06004
)
) 	JUDGE MARY ANN WHIPPLE
)
)
)
)
)
)
)
MEMORANDUM OF DECISION AND ORDER GRANTING MOTION FOR DEFAULT
JUDGMENT
This 	adversary 	proceeding 	is 	before 	the 	court 	on 	the 	“Amended 	Complaint 	to 	Determine
Dischargeability of Student Loans” (“Complaint”). [Doc. # 4]. Plaintiff is the debtor in the underlying
Chapter 7 case. Stratus Financial LLC is the named defendant and a creditor in the underlying Chapter 7
case. No attorney has entered an appearance on Defendant’s behalf in this adversary proceeding.
On May 5, 2026, the Clerk issued a summons and notice of pretrial conference. [Doc. #5]. Plaintiff
executed service of summons and the Complaint upon Defendant by first class mail on May 6, 2026.
[Doc. # 6].
The court incorporates by reference in this paragraph and adopts as the findings and orders
of this court the document set forth below. This document has been entered electronically in
the record of the United States Bankruptcy Court for the Northern District of Ohio.
Dated: July 14 2026
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On June 8, 2026, the court held a pretrial scheduling conference as set forth in the summons served
upon Defendant. Plaintiff’s counsel appeared by telephone. There was no appearance by or on behalf of
the Defendant. 	The docket shows the Defendant had not filed an answer or other response to the
Complaint by the deadline of June 4, 2026, nor was there a request for an extension of the answer deadline.
The court directed the Clerk to issue an entry of default and gave Plaintiff seven days to file a motion for
default judgment. [Doc. # 8]. The Clerk’s entry of default was issued on June 15, 2026. [Doc. # 10].
The entry of default has not been set aside or requested to be set aside.
Plaintiff filed his Motion for Default Judgment (“Motion”) on June 15, 2026, and attached the loan
documents to the motion. [Doc. # 11]. The Certificate of Service indicates Plaintiff sent the Motion by
regular mail to Defendant on the same date the Motion was filed with the court. [Id. at 3/27]. The court
scheduled a hearing on the Motion, notice of which was also sent by the Clerk to the Defendant on June
18, 2026. [Doc. ## 12 and 14].
On July 13, 2026, the court conducted a hearing on the Motion, which Plaintiff attended by phone.
There was no appearance of record by or on behalf of the Defendant nor did Defendant or any lawyer for
Defendant communicate with court staff about the hearing or an appearance.
Review of the record reflects no answer or other response to the Complaint having been filed by the
Defendant. 	Pursuant to Fed. R. Civ. P. 55, made applicable by Fed. R. Bankr. P. 7055, the court will
therefore grant Plaintiff’s Motion for Default Judgment.
Plaintiff seeks a determination of dischargeability contending the debts are not qualified education
loans (Count One) and, in the alternative, that 	they impose an undue hardship on Plaintiff if they are
(Count Two). The legal basis for the Complaint is 11 U.S.C. § 523(a):
(a) A discharge under section 727, 1141, 1192, 1228(a), 1228(b), or 1328(b) of this
title does not discharge an individual debtor from any debt –
(8) unless excepting such debt from discharge under this paragraph would
impose an undue hardship on the debtor and the debtor’s dependents, for—
(B) any other educational loan that is a qualified education loan, as
defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred
by a debtor who is an individual;
11 U.S.C. § 523(a)(8)(B).
According to the Complaint, Plaintiff applied for a loan with Stratus Financial LLC for training at
American Winds Aviation, on January 23, 2024. 	Plaintiff further contends the Defendant disbursed
$20,000.00 to American Winds Aviation as of January 31, 2024, and holds the remaining amount of the
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loan in trust. Plaintiff requests declaratory judgment that this debt is not a qualified education loan and
that as such it not be excepted from discharge as such. Alternatively, the Complaint asserts the debt is
dischargeable as an undue hardship upon Plaintiff.
This court has jurisdiction over the Plaintiff’s underlying Chapter 7 bankruptcy case. 	28 U.S.C. §
1334. The case and all related proceedings, including this adversary proceeding, have been referred to
this court for decision. 28 U.S.C. § 157(a) and General Order 2012-7 entered by the United States District
Court for the Northern District of Ohio. 	This adversary proceeding is a core proceeding in which this
court can make a final determination because it involves a determination as to dischargeability of
particular debts. 28 U.S.C. § 157(b)(2)(I).
The court finds that notice, including service of the summons and Complaint pursuant to Fed. R. Bankr.
P. 7004(b)(8), has been duly and properly served upon Defendant at all stages of this adversary
proceeding. Moreover, as a result of being properly served with a summons and the Complaint and the
ensuing default, Defendant has impliedly consented to entry of a judgment against it by the bankruptcy
court. Messr. v. Frye Media, Inc. (In re Fry Festival LLC), 611 B.R. 735, 740 (Bankr. S.D.N.Y. 2020).
The court therefore finds that Defendant has failed to appear, plead, or otherwise defend this action as
required by the applicable rules of procedure.
Defendant’s failure to answer the Complaint does not, standing alone, entitle Plaintiff to a default
judgment as a matter of right. American Express Centurion Bank v. Truong (In re Truong), 271 B.R. 738,
742 (Bankr. D. Conn. 2002); Webster v. Key Bank (In re Webster), 287 B.R. 703, 709 (Bankr. N.D. Ohio
2002); Columbiana County Sch. Empl. Credit Union v. Cook (In re Cook), 342 B.R. 384 at *3 (B.A.P. 6th
Cir. 2006) (unpublished). 	In determining whether a default judgment is appropriate, “the court should
[accept] as true all of the factual allegations of the complaint, except those relating to damages” and afford
plaintiff “all reasonable inferences from the evidence offered.” Au Bon Pain Corp. v. Artect, Inc., 653
F.2d 61, 65 (2d Cir. 1981). 	Yet the court must decide whether the unchallenged facts constitute a
legitimate cause of action, since the party in default does not admit mere conclusions of law. 	Smith v.
Household Fin. Reality Corp. of New York (In re Smith), 262 B.R. 594, 597 (Bankr. E.D.N.Y. 2001).
The court finds that the well-pleaded allegations of the Complaint constitute a valid cause of action
under 11 U.S.C. § 523(a)(8)(B) as it pertains to Count One. Specifically, the Complaint establishes: (1)
American Winds Aviation is not a Title IV eligible institution as recognized under the Higher Education
Act; (2) the loan was originated in an amount exceeding the cost of attendance at the school; and (3) the
debt is not a “qualified education loan” under 26 U.S.C. § 221(d)(1). 	As a creditor, Defendant bears the
burden of establishing the debt is excepted from discharge. In re Bronsdon, 435 B.R. 791, 796 (B.A.P.
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1st Cir. 2010); In re Phillips, 672 B.R. 717, 728-29 (Bankr. M.D. Tenn. 2025). The Defendant has failed
to refute or establish the debt as one excepted from discharge. Accordingly, the court finds Plaintiff has
established the requisite elements in support of his Motion and judgment in his favor as to Count One.
As Plaintiff is entitled to default judgment on Count One, the court deems it unnecessary to address
Count Two as it is moot.
Based on the foregoing reasons and authorities, and additionally for the reasons stated on the record at
the July 13, 2026, hearing,
IT IS ORDERED that Plaintiff’s Motion for Default Judgment [Doc. No. 11] is GRANTED as to
Count One. A separate, final judgment against Defendant and in accordance with this Memorandum of
Decision and Order shall be entered by the court.
# # #
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