United States District Court, S.D. Mississippi, Northern Division
ORDER GRANTING IN PART AND DENYING IN PART MOTIONS FOR DEFAULT JUDGMENTS
DAVID BRAMLETTE, District Judge.
This cause is before the Court on Plaintiff's, Samuel Tyson, Motion for Default Judgment as to Fresh Start Transportation, Inc., [docket entry no. 67] and Motion for Default Judgment as to Quality Homes of McComb, Inc. [docket entry no. 68]. Having reviewed the motions and the record in this case, the Court finds as follows:
I. Factual and Procedural Background
In late June of 2012, Plaintiff Samuel Tyson entered into a contract with Defendant Quality Homes of McComb, Inc., ("Quality Homes") for the purchase of a new manufactured home. Tyson made a down payment of $60, 000 and selected a 28' x 80' home on June 13, 2012, but he did not sign a contract that day. Shortly thereafter, however, Tyson found a used home through a private seller and requested a refund of his down payment. Quality Homes instead asked Tyson to select a different home, and on June 27, 2012, Tyson signed a contract with Quality Homes for the purchase of a home different from the one he had originally selected. Quality Homes agreed then that the home would not be delivered until Tyson's lot was prepared.
The contract he signed was blank. It "contained only a stamped signature, and did not contain the serial number of the home Tyson selected." Compl. p. 3, ECF No. 1. Tyson alleges that he made his selection based on his disability because "he could easily climb the steps at the entrance to the home and he could easily utilize the bath tub." Compl. p. 3. At some later time not specified in the complaint, Quality Homes gave Tyson a second copy of the contract that contained the serial number of the home that was delivered and a notary stamp. See Compl. Ex. B., ECF No. 1-2.
On August 13, 2012, Defendant Fresh Start Transportation, Inc., ("Fresh Start") delivered and installed a home on Tyson's lot, at Quality Homes's direction. Tyson had informed Quality Homes the week before that his lot was still not prepared. Tyson was out of town the day the home was delivered and advised the defendants by telephone that he did not accept delivery of the home because the lot was still not prepared. Further, the home that was delivered was not the home that Tyson had selected, and it was damaged and in need of repair. Tyson attributes a number of the defects to the manufacturer, Defendant Cappaert Manufactured Homes, Inc. ("Cappaert").
Tyson filed suit on June 26, 2013. A summons was issued to Quality Homes, Fresh Start, and Cappaert on September 25, 2013. Tyson personally served process on Robert A. Yawn, the registered agent for both Fresh Start and Quality Homes, on October 3, 2013, in a Burger King parking lot in Hammond, Louisiana. Both Fresh Start and Quality Homes failed to answer the Complaint within the twenty-one (21) days required by Federal Rule of Civil Procedure 12(a). Tyson originally filed motions for default judgment on February 5, 2014. The Court, however, denied these motions as premature and directed the clerk's office to make an entry of default as to both defendants instead. See Order, ECF No. 48. An entry of default was made as to Fresh Start and Quality Homes on September 16, 2014. See Clerk's Entry of Default, ECF No. 49. Tyson renewed his motions for default judgment on October 7, 2014.
Federal Rule of Civil Procedure 55 governs default judgments. "Securing a default judgment is a three-step procedure involving the defendants' default, entry of default, and a default judgment." Twist & Shout Music v. Longneck Xpress, N.P., 441 F.Supp.2d 782, 783 (E.D. Tex. 2006) (citing New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996)). In step one, a defendant defaults when he "has failed to plead or otherwise defend" a suit against him. Fed.R.Civ.P. 55(a). In step two, a plaintiff demonstrates that default "by affidavit or otherwise, [and] the clerk... enter[s] the [defendant]'s default." Id . The Court found in its previous order that both Fresh Start and Quality Homes had defaulted and that Tyson had shown their default. Having obtained the clerk's entry of default, Tyson continues to step three. In cases other than certain debt collection actions, a party "must apply to the court for a default judgment." Fed.R.Civ.P. 55(b)(2).
"[A] party is not entitled to a default judgment as a matter of right, even where the defendant is technically in default.'" Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996)). "Default judgments are a drastic remedy, not favored by the Federal Rules [of Civil Procedure] and resorted to by courts only in extreme situations." Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989). "The Federal Rules are designed for the just, speedy, and inexpensive disposition of cases on their merits, not for the termination of litigation by procedural maneuver, " and default judgment is only available "when the adversary process has been halted because of an essentially unresponsive party." Id . (internal quotation omitted).
But by defaulting, the defendant "admits the plaintiff's well-pleaded allegations of fact..., " and if those facts entitle a plaintiff to relief, then the plaintiff is entitled to a default judgment. Nishimatsu Const. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) ("There must be a sufficient basis in the pleadings for the judgment entered."). Thus, the Court will look at each of the counts in Tyson's complaint to see whether he is entitled to default judgment against either Quality Homes or Fresh Start.
A. Count I: "Breach of Fiduciary Duties"
The Court must first determine whether the facts establish a fiduciary relationship between Tyson and either Quality Homes or Fresh Start. Under Mississippi law, a fiduciary relationship may arise out of a contractual relationship in four circumstances:
(1) the activities of the parties go beyond their operating on their own behalf, and the activities are for the benefit of both; (2) where the parties have a common interest and profit from the activities of the other; (3) where the parties repose trust in one another; and (4) where one party has dominion or control over the other.
Holland v. Peoples Bank & Trust Co., 3 So.3d 94, 101 (Miss. 2008). The Court finds that the facts do not establish a fiduciary relationship between Tyson and either Quality Homes or Fresh Start, and, therefore, Tyson is not entitled to default judgment on this claim.
B. Count II: "Breach of Contract"
In a claim for breach of contract in Mississippi, a plaintiff must prove: (1) the existence of a valid contract and (2) breach by the defendant. Bus. Commc'ns, Inc. v. Banks, 90 So.3d 1221, 1224-25 (Miss. 2012). Tyson has attached a document entitled "Bill of Sale and Purchase Agreement" to his complaint. See Compl. Ex. A, ECF No. 1-1. The Court accepts this as proof of the existence of a valid contract. It is signed by Tyson and a representative of Quality Homes. Having found a valid contract, the Court now turns to whether Quality Homes or Fresh Start, acting as Quality Homes's agent, breached the agreement. However, the contract as signed does not contain all of the terms of the agreement. Crucially, it does not contain a serial number for a home, and it does not contain the parties' agreement about delivery-that delivery would not occur until Tyson's lot was prepared. Because the serial number is missing from the written agreement, the Court finds that the parties did not intend it to "constitute a complete integration of the agreement ...