Opinion
Civil Action 3:21-CV-02161
09-13-2022
BMO HARRIS BANK N.A., Plaintiff, v. JRD TRUCKING, LLC, et al., Defendants.
(MEHALCHICK, M.J.)
REPORT AND RECOMMENDATION
(MARIANI, J.)
Presently before the Court is a motion for default judgment pursuant to Federal Rule of Civil Procedure 55(b)(2) filed by Plaintiff BMO Harris Bank N.A. (“BMO Harris”). (Doc. 8). On December 21, 2021, BMO Harris commenced this action by filing a complaint against Defendants JRD Trucking, LLC, and Richard Wilson (collectively, “Defendants”), seeking repayment of certain equipment financing loans. (Doc. 1). Defendants have yet to appear or defend in this action. For the following reasons, it is recommended that BMO Harris's motion for default judgment be GRANTED, and that damages be awarded in the amount of $218,177.94 in favor of BMO Harris and against Defendants. (Doc. 8).
I. Background and Procedural History
BMO Harris filed the complaint pursuant to 28 U.S.C. § 1332(a) on December 21, 2021, alleging claims of breach of contract and breach of guaranty. (Doc. 1). The Court issued summons as to Defendants on December 28, 2021. (Doc. 2). Summons were served on December 29, 2021, and were returned executed as to Defendants on December 30, 2021. (Doc. 3, at 1; Doc. 4, at 1). On February 9, 2022, BMO Harris filed a request for entry of default as Defendants had failed to plead or otherwise defend against the action more than twenty-one (21) days after it was served with summons. (Doc. 5). On February 11, 2022, the Clerk of Court entered default against Defendants for failure to file an answer and/or otherwise plead, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. (Doc. 7). On May 23, 2022, BMO Harris filed a motion for default judgment. (Doc. 8). As of the date of this report and recommendation, Defendants have not responded to BMO Harris's complaint or otherwise appeared in this action.
In the complaint, BMO Harris contends that on April 12, 2017, BMO Harris, as lender, and Defendants JRD Trucking, as borrower, entered into a Loan and Security Agreement (the “First Loan Agreement”), pursuant to which BMO Harris agreed to finance JRD Trucking's purchase of one (1) 2018 Mack GU713; and one (1) 2017 Summit Alum (collective, the “Fist Loan Collateral”), in exchange for a total payment of $233,961.00, payable in sixty (60) monthly installments of $3,899.35 each, commencing on June 1, 2017. (Doc. 1, ¶ 7; Doc. 1-2, at 2-6). As consideration for entering into the First Loan Agreement, JRD Trucking granted BMO Harris a security interest in and to the First Loan Collateral, and Plaintiff perfected its security interest in and to the First Loan Collateral by recording its lien with the State of New Jersey Motor Vehicle Commission. (Doc. 1, ¶ 8; Doc. 1-2, at 3; Doc. 1-3, at 2-3). As further consideration for entering into the First Loan Agreement, on or about April 12, 2017, Wilson, as guarantor, executed a certain Continuing Guaranty in favor of Plaintiff absolutely and unconditionally guarantying JRD Trucking's present and future obligations to BMO Harris, including those obligations under the First Loan Agreement (the “First Loan Guaranty”). (Doc. 1, ¶ 9; Doc. 1-4, at 2). On August 30, 2019, JRD Trucking and BMO Harris entered into a Modification Agreement (the “First Loan Modification Agreement”), which modified the terms of the First Loan Agreement. (Doc. 1, ¶ 10; Doc. 15, at 2-4).
On November 29, 2017, JRD Trucking and BMO Harris entered into a Master Vehicle Lease Agreement (the “Lease Agreement”), pursuant to which BMO Harris leased to JRD Trucking one (1) 2018 Mack GU713; and one (1) 2017 Summit Alum (collectively, the “Lease Collateral”). (Doc. 1, ¶ 11; Doc. 1-6, at 2-9). JRD Trucking promised to pay BMO Harris sixty (60) monthly rent payments of $3,208.22 each, commencing on January 1, 2018, and continuing on the like date of each month thereafter. (Doc. 1, ¶ 11; Doc. 1-6, at 8). BMO Harris avers that the Lease Agreement together with each Schedule constitutes an equipment lease. (Doc. 1, ¶ 12). BMO Harris perfected its security interest in and to the Lease Collateral by possession of the original Certificate of Title for the Lease Collateral and recording its liens with the State of New Jersey Motor Vehicle Commission. (Doc. 1, ¶ 13). As further consideration for entering into the Lease Agreement, on or about November 29, 2017, Wilson, as guarantor, executed a certain Continuing Guaranty in favor of BMO Harris absolutely and unconditionally guarantying JRD Trucking's present and future obligations to BMO Harris, including those obligations under the Lease Agreement (the “Lease Guaranty”). (Doc. 1, ¶ 14; Doc. 1-8, at 2). On or about August 30, 2019, JRD Trucking and BMO Harris entered into a Modification Agreement (the “Lease Modification Agreement”), which modified the terms of the Lease Agreement. (Doc. 1, ¶ 15; Doc. 1-9, at 2-4).
On June 15, 2018, JRD Trucking, as borrower, and BMO Harris, as lender, entered into a Loan and Security Agreement (the “Second Loan Agreement”), pursuant to which BMO Harris agreed to finance JRD Trucking's purchase of one (1) 2019 Mack GR64F; and one (1) 2018 Brandon Dump (collectively, the “Second Loan Collateral”), in exchange for a total payment of $233,166.24, payable in seventy-two (72) monthly installments of $3,238.42 each, commencing on August 1, 2018. (Doc. 1, ¶ 16; Doc. 1-10, at 2-6). As consideration for entering into the Second Loan Agreement, JRD Trucking granted BMO Harris a security interest in and to the Second Loan Collateral, and BMO Harris perfected its security interest in and to the Second Loan Collateral by recording its lien with the State of New Jersey Motor Vehicle Commission. (Doc. 1, ¶ 17; Doc. 1-11, at 2-3). As further consideration for entering into the Second Loan Agreement, on or about June 16, 2018, Wilson, as guarantor, executed a Continuing Guaranty in favor of BMO Harris absolutely and unconditionally guarantying JRD Trucking's present and future obligations to BMO Harris, including those obligations under the Second Loan Agreement (the “Second Loan Guaranty”). (Doc. 1, ¶ 18; Doc. 1-12, at 2). On August 30, 2019, JRD Trucking and BMO Harris entered into a Modification Agreement (the “Second Loan Modification Agreement”), which modified the terms of the Second Loan Agreement. (Doc. 1, ¶ 19; Doc. 1-13, at 2-4).
Under the First Loan Agreement, Lease Agreement, and Second Loan Agreement (collectively, the “Agreements”), an event of default shall occur if JRD Trucking fails to pay when due any amount owed to BMO Harris under the Agreements. (Doc. 1, ¶ 21; Doc. 1-2, at 4; Doc. 1-6, at 4; Doc. 1-10, at 4). Upon the occurrence of an event of default, BMO Harris is entitled to monetary damages from JRD Trucking as a result of JRD Trucking's breach, which amounts shall include all unpaid monthly rentals, additional rents, and adjusted rents then due and owing together with all costs and expenses incurred by BMO Harris in the enforcement of its rights and remedies under the Agreements. (Doc. 1, ¶ 22; Doc. 1-2, at 4; Doc. 1-6, at 5; Doc. 1-10, at 4). According to the Agreements, JRD Trucking is obliged to pay BMO Harris all expenses of retaking, holding, preparing for sale, selling, and the like of the collateral, including without limitation (1) the reasonable fees of any attorneys retained by BMO Harris, and (b) all other legal expenses incurred by BMO Harris. (Doc. 1, ¶ 23; Doc. 1- 2, at 4; Doc. 1-6, at 4; Doc. 1-10, at 4). JRD Trucking is liable to BMO Harris for any deficiency remaining after the disposition of the collateral after default. (Doc. 1, ¶ 24; Doc. 12, at 4; Doc. 1-6, at 4; Doc. 1-10, at 4). Upon acceleration of JRD Trucking's obligations under the Agreements, the Agreements provide that interest on all sums then owing shall accrue at the rate of 1 ½% per month. (Doc. 1, ¶ 25; Doc. 1-2, at 4; Doc. 1-6, at 4; Doc. 1-10, at 4). Pursuant to the terms of the Agreements, JRD Trucking waived its right to a jury trial of any claim or cause of action relating thereto. (Doc. 1, ¶ 26; Doc. 1-2, at 5; Doc. 1-6, at 6; Doc. 1-10, at 5). Pursuant to the terms of the First Loan Guaranty, Lease Guaranty, and Second Loan Guaranty (collectively, the “Guarantees”), Wilson waived his right to a jury trial of any claim or cause of action relating thereto. (Doc. 1, ¶ 27; Doc. 1-4, at 2; Doc. 1-8, at 2; Doc. 1-12, at 2).
In the complaint, BMO Harris avers that JRD Trucking is in default under the terms and conditions of the Agreements and Wilson is in default under the terms and conditions of the Guarantees. (Doc. 1, ¶¶ 28-29). BMO Harris states that it has performed any and all obligations to be performed by it under the terms of the Agreements and Guarantees. (Doc. 1, ¶ 30). On November 26, 2021, BMO Harris notified Defendants of the default status of the Agreements and demanded payment in full on the Agreements. (Doc. 1, ¶ 31; Doc. 1-14, at 2-3). BMO Harris states that as of the date of filing the complaint, Defendants have not cured the default under the Agreements and Guarantees, and that due to these defaults and pursuant to the express terms of the Agreements and Guarantees, BMO Harris is entitled to contractual money damages as set forth in the complaint. (Doc. 1, ¶¶ 32-33). BMO Harris alleges that as of November 18, 2021, the balance due under the Agreements was not less than $187,895.34. (Doc. 1, ¶ 34). BMO Harris seeks a judgment against Defendants in the amount due under the Agreements and Guarantees, plus additional interest, costs of collection and attorneys' fees and costs. (Doc. 1, at 10-11).
On May 23, 2022, BMO Harris filed a motion for default judgment. (Doc. 8). In the motion, BMO Harris explains the procedural history of the action emphasizing Defendants' failure to appear, plead, or otherwise defend in this action. (Doc. 8, at 2). The Court scheduled the telephonic hearing on damages for Monday, September 12, 2022, and directed the Clerk of Court to serve a copy of the Order upon the Defendants. (Doc. 12). At the hearing on damages, Defendants did not appear. Debb White, BMO Harris's litigation specialist, testified at the hearing and BMO Harris submitted exhibits in support of the motion for default judgment. (Doc. 13; Doc. 14). The motion for default judgment s now ripe for review. (Doc. 8).
The undersigned notes that BMO Harris has not filed a separate brief in support of its motion. (Doc. 9). Section 1, Rule 7.5 of the Rules of Court for the United States District Court for the Middle District of Pennsylvania requires that a separate brief in support of a motion be filed (a) the motion is one for “enlargement of time” and the reasons are “fully stated in the motion,” (b) all parties concur to the motion and the reasons and relief are “fully stated therein,” or (c) the motion is one “for appointment of counsel.” M.D. Pa. Civ. R. 7.5. If BMO Harris fails to file a brief in support within fourteen (14) days after the filing of any motion and none of the exceptions are present, BMO Harris's motion will be “deemed to be withdrawn.” M.D. Pa. Civ. R. 7.5. However, as BMO Harris's motion briefly outlines the reasons that default should be granted, the Court will assess the merits of the motion. (Doc. 8)
II. Legal Standard
The entry of default judgment is governed by Rule 55 of the Federal Rules of Civil Procedure. Under subsection (a) of that rule, the Clerk of Court is instructed to enter a default against a defendant who “has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” Fed.R.Civ.P. 55(a). “Entry of a default is a prerequisite to entry of a default judgment under Rule 55(b).” Sys. Indus., Inc. v. Han, 105 F.R.D. 72, 74 (E.D. Pa. 1985) (emphasis in original); see also Enigwe v. Gainey, Civil Action No. 10-684, 2012 WL 213510, at *2 (E.D. Pa. Jan. 23, 2012) (“[A] default judgment under Rule 55(b) must be preceded by entry of a default under Rule 55(a).”) (emphasis in original).
Once the entry of default under Rule 55(a) is entered, the party seeking default judgment is still not entitled to such. Malibu Media, LLC v. Everson, No. 4:19-CV-01048, 2021 WL 84180, at *1 (M.D. Pa. Jan. 11, 2021). Rather, “a court is required to exercise sound judicial discretion in deciding whether to enter default judgment.” Kibbie v. BP/Citibank, No. 3:CV-08-1804, 2010 WL 2573845, at *2 (M.D. Pa. 2010). In making this determination, courts use three factors: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). “[W]hen a defendant has failed to appear or respond in any fashion to the complaint, this analysis is necessarily one-sided; entry of default judgment is typically appropriate in such circumstances at least until the defendant comes forward with a motion to set aside the default judgment under Rule 55(c).” Deutsche Bank Nat. Trust Co. v. Strunz, No. 1:12-cv-01678, 2013 WL 122644, at *1 (M.D. Pa. 2013).
“A finding that default judgment is appropriate, however, is not the end of the inquiry.” Martin v. Nat'l Check Recovery Servs., LLC, No. 12-1230, 2016 WL 3670849, at *1 (M.D. Pa. July 11, 2016). The Court must also look to whether the “unchallenged facts constitute a legitimate cause of action.” Minh Dung Aluminum Co., LTD v. Aluminum AlloysMFG LLC, No. 1:20-cv-01764, 2021 WL 3290686, at *2 (M.D. Pa. Aug. 2, 2021) (citing Wright, et al., supra, at § 2688; Broad.Music, Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F.Supp.2d 537, 541 (E.D. Pa. 2008) (noting that, “before granting a default judgment,” courts must “ascertain whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law”)). “[T]he well-pleaded, factual allegations of the complaint . . . are accepted as true and treated as though they were established by proof.” SeeE. Elec. Corp. of N.J. v. Shoemaker Const. Co., 652 F.Supp.2d 599, 605 (E.D. Pa. 2009) (citation omitted). However, “the Court need not accept the moving party's factual allegations or legal conclusions relating to the amount of damages.” See Minh, 20201 WL 3290686, at *2 (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)).
III. Discussion
BMO Harris contends that its motion should be granted and that judgment should be entered in its favor and against Defendants. (Doc. 8, at 1). Specifically, BMO Harris states that Defendants were provided due and proper notice and the opportunity to be heard, and “have not appeared in this action, and are not entitled to notice of this application for entry of a default judgment.” (Doc. 8, at 2; Doc. 5-1, at 2-3). BMO Harris avers that the complaint “sets out valid claims or breach of contract and breach of guaranty,” and that, due to the Clerk's entry of default, “Defendants may not challenge any of the factual allegations supporting that claim.” (Doc. 8, at 2). For the following reasons, the undersigned finds that entry of default is proper in this case.
A. Factual Analysis of the Complaint
First, BMO Harris has pled a claim for breach of contract. (Doc. 1, at 10). To state a claim for breach of contract under Pennsylvania law, a plaintiff must establish: (1) the existence of a contract, including its essential terms; (2) a breach of a duty imposed by the contract; and (3) resultant damages. Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003). BMo Harris alleges that: (1) it entered into two loan agreements and a lease agreement with JRD Trucking and describes the agreements' essential terms; (2) JRD Trucking breached the Agreements by failing to make timely payments; and (3) specific damages resulting from the breach. (Doc. 1, at 4-10). Thus, the undersigned finds that BMO Harris has alleged enough facts to state a claim against JRD Trucking for breach of contract.
Second, BMO Harris has pled a claim for breach of guaranty. (Doc. 1, at 11). “‘An action seeking recovery under a guaranty is essentially a breach of contract action,' and the elements are the same.” Chong v. 7-Eleven, Inc., No. 18-cv-1542, 2020 WL 1069456, at *10 (E.D. Pa. Mar. 4, 2020) (quoting U.S. Bank, N.A. v. Gorman, No. 11-cv-612, 2012 WL 2919295, at *4 (W.D. Pa. June 7, 2012), report and recommendation adopted, 2012 WL 2916721 (W.D. Pa. July 14, 2012)). BMO Harris contends that Wilson executed the Guarantees for JRD Trucking's Agreements and has failed to fulfill his obligations therein, causing it monetary damages. (Doc. 1, at 11). Accordingly, the undersigned finds that BMO Harris has also alleged enough facts to state a claim against Wilson for breach of guaranty.
B. Entry of Default Judgment is Appropriate
Given that “the unchallenged facts constitute [ ] legitimate cause[s] of action,” the undersigned must now consider whether entering default judgment is appropriate. BMOHarris Bank N.A. v. Superior Trucking, Inc., No. CV 20-2362, 2021 WL 765730, at *3 (E.D. pa. Feb. 25, 2021) (quoting DirecTV, Inc. v. Asher, No. 03-cv-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006)). “Three factors control whether a default judgment should be granted: (1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct.” Chamberlain, 210 F.3d at 164 (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984)).
Each of these factors weighs in favor of granting default judgment. First, BMO Harris will be prejudiced if the Court denies its motion because it “is unable to proceed with this action due to [Century's] failure to respond and has no other means of recovering against [it].” Minh, 2021 WL 3290686, at *4 (citing Broad.Music, Inc. v. Kujo Long, LLC, No. 1:14-cv-00449, 2014 WL 4059711, at *2 (M.D. Pa. Aug. 14, 2014) (stating that the plaintiffs “w[ould] be prejudiced . . . by their current inability to proceed with their action due to [the] [d]efendants' failure to defend”); seeAsher, 2006 WL 680533, *2 (granting default judgment where defendant “has not responded in any fashion,” “has not asserted any meritorious defense” and has not “offered any excusable reason for his default”). Second, as Defendants have failed to file any responsive pleading in this action, the undersigned is unable to deduce whether it has a litigable defense. SeeMinh, 2021 WL 3290686, at *4 (citing Laborers LocalUnion 158 v. Fred Shaffer Concrete, No. 10-cv-1524, 2011 WL 1397107, at *2 (M.D. Pa. Apr. 13, 2011)). Further, “the court may presume that an absent defendant who has failed to answer has no meritorious defense, because [i]t is not the court's responsibility to research the law and construct the parties' arguments for them.” Joe Hand Promotions, Inc. v. Yakubets, 3 F.Supp.3d 261, 271-72 (E.D. Pa. 2014) (internal citations and quotation marks omitted). Finally, Defendants have failed to appear in this action or file any pleadings. Thus, the undersigned “cannot discern from the record any excuse or justification for [Defendants'] default apart from [its] own culpability.” Minh, 2021 WL 3290686, at *4. Indeed, Defendants have failed to enter an appearance or file a timely answer to the complaint and have offered no reasons for the failure to do so. “A defendant's default, or its decision not to defend against allegations in a complaint, may be grounds for concluding that the defendant's actions are willful.” Innovative Office Prods., Inc. v. Amazon.com, Inc., No. 10-CV-4487, 2012 WL 1466512, at *3 (E.D. Pa. Apr. 26, 2012). In the absence of any excuse or justification for Defendants' failure to participate in this litigation, the undersigned is compelled to conclude that Defendants' failure to participate in this litigation is the result of culpable conduct. Minh, 2021 WL 3290686, at *4 (citing Laborers Local Union 158, 2011 WL 1397107, at *2).
As BMO Harris has pleaded facts in the complaint that constitute legitimate causes of action against Defendants and the Chamberlain factors weigh in favor of granting default judgment, it is recommended that BMO Harris's motion for default judgment be granted and that judgment be entered in favor of BMO Harris and against Defendants. (Doc. 5); seeMinh, 2021 WL 3290686, at *2-*4.
B. Damages
After granting the motion for default judgment, the Court must address the amount of damages to award. See Rios v. Marv Loves 1, No. 13-1619, 2015 WL 5161314, at *13 (E.D. Pa. Sept. 2, 2015). The Court may conduct a hearing to determine the amount of damages owed to the plaintiff, Fed.R.Civ.P. 55(b)(2), or “may rely upon detailed affidavits submitted by the parties.” J & J Sports Prods., Inc. v. Puentenueva, No. 14-3226, 2014 WL 7330477, at *2 n.1 (E.D. Pa. Dec. 22, 2014) (citation omitted). Here, the Court conducted a hearing on damages on September 12, 2022, where Debb White, BMO Harris's litigation specialist, testified about the damages BMO Harris sustained as a result of Defendants' default on the two loan agreements and the lease agreement. Further, BMO Harris presented documentary exhibits calculating the damages sustained and Debb White testified as to the authenticity of those documents. (Doc. 14). The Court relies upon the testimony of Debb White, as well as any detailed affidavits and exhibits. (Doc. 1, Doc. 8, at 1-2; Doc. 13; Doc. 14, at 2-4).
As of September 8, 2022, BMO Harris calculated damages in the total amount of $218,177.94. (Doc. 14, at 2-4). BMO Harris has presented a breakdown of its actual damages:
(i) $36,697.06 under the First Loan Agreement, which includes unpaid principal payments in the amount of $28,120.46 and unpaid interest and fees in the amount of $8,576.60;
(ii) $98,016.31 under the Lease Agreement, which includes liquidated damages in the amount of $84,048.19 and the total accrued and the total unpaid postcancelation interest and fees in the amount of $13,968.12;
(iii) $79,426.65 under the Second Loan Agreement, which includes unpaid principal payments in the amount of $60,864.35 and unpaid interest and fees in the amount of $18,562.30; and
(iv) reasonable attorney's fees of $4,037.92.
The Court may award reasonable attorney's fees to a prevailing party in an employment discrimination action. 42 U.S.C. § 2000e-5(k). In order to determine whether an award of attorney's fees is appropriate, the Third Circuit has stated:
First, the plaintiff must be a ‘prevailing party'; i.e., the plaintiff must essentially succeed in obtaining the relief sought on the merits. Second, the circumstances under which the plaintiff obtained the relief sought must be causally linked to the prosecution of the Title VII complaint, in the sense that the Title VII proceedings constituted a material contributing factor in bringing about the events that resulted in the obtaining of the desired relief.
Sullivan v. Commonwealth of Pennsylvania Dept. of Labor and Indus., 663 F.2d 443, 452 (3d Cir. 1981) (citations omitted).Here, BMO Harris has prevailed in its action as it has obtained a default judgment and is thus may recover reasonable attorney's fees. SeeRios, 2015 WL 5161314, at *18; Reczek v.JHA Wilmington, Inc., No. CIV.A. 07-013-GMS, 2008 WL 4723021, at *2 (D. Del. Oct. 27, 2008).
(Doc. 14, at 2-4).
As Defendants have not appearing in this action, responded to the motion for default judgment, or appeared at the hearing on damages, the total amount of $218,177.94 in damages is undisputed, and the amount is reasonable. Thus, it is recommended that the Court award BMO Harris that amount.
IV. Recommendation
For the foregoing reasons, it is respectfully recommended that BMO Harris's motion for default judgment be GRANTED. (Doc. 8). It is further recommended that judgment be entered against Defendants and in favor of BMO Harris in the amount of $218,177.94, and that the Clerk of Court be directed to CLoSE this case.
NOTICE
NOTICE IS HEREBY GIVEN that the undersigned has entered the foregoing Report and Recommendation dated September 13, 2022. Any party may obtain a review of the Report and Recommendation pursuant to Rule 72.3, which provides:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636(b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.