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Yeager v. Brand

United States District Court, N.D. Mississippi, Greenville Division

April 12, 2018




         This diversity action is before the Court on the plaintiffs' motion for default judgment. Doc. #15.

         I Procedural History

         On December 1, 2017, Susan Yeager and Amelia Nichols, acting as guardians of their mother Jacoba Dooley, filed a complaint in this Court against R.L. Brand; Roderick Mitchell; B & B Contracting Management Services, Inc. (“B&B”); and New Life Church of Cleveland, Mississippi (“New Life”). Doc. #1. The complaint alleges that during the time relevant to this action, Dooley's mind was beginning to fail and that:

The individual defendants, R.L. Brand and Roderick Mitchell, scammed and fleeced the ward into buying a lot from New Life Church which lot was not owned by New Life Church, but rather was owned by Roderick Mitchell and his wife and which lot was mortgaged and could not be conveyed free and clear and by having plaintiff enter into a construction contract with Brand [and B&B] for him, Brand, to construct a house on said lot for $140, 000.00 and toward which $140, 000.00 plaintiff paid Brand $70, 000.00 or $105, 000.00 (as may be proved) for which house Brand had no intention of completing and for which Brand never did any work except to hip up the soil for the foundation. Thus Roderick Mitchell and R. L. Brand conspired together to deprive and defraud the ward of that to which she was lawfully entitled, a lot with a deed and a house erected thereon in order to steal from ward the money she paid for the lot, title to which she never got, and the money the ward paid to have the house constructed, which construction was never done. Brand and Mitchell took advantage of the ward's senility and dementia in so scamming and fleecing said ward.

Id. at ¶ 50. As relief, the plaintiffs seek: (1) rescission of the purchase contract with New Life; (2) rescission of the construction contract with Brand and B&B; and (3) treble damages under Mississippi's Vulnerable Persons' Act. Id. at 16.

         Mitchell and New Life were served with a summons and copy of the complaint on December 2, 2017. Doc. #5; Doc. #6. Brand and B&B were served on December 5, 2017. Doc. #3; Doc. #4. Mitchell and New Life filed separate answers to the complaint on December 20, 2017. Doc. #7; Doc. #8. Neither Brand nor B&B answered the complaint and, on December 28, 2017, the plaintiffs moved for entry of default. Doc. #11.

         The Clerk of the Court entered default against Brand and B&B on January 2, 2018, and the plaintiffs moved for default judgment the following day. Doc. #12; Doc. #15. The same day the plaintiffs moved for default judgment, the Clerk received from Brand a letter styled, “Answer to judgement.” Doc. #16. Brand's letter contradicts most of the facts alleged in the complaint but offers no excuse for the default and does not request that the default be set aside.

         On February 12, 2018, the plaintiffs filed a “Stipulation of Dismissal as to Two Defendants Only.” Doc. #28. The stipulation, which is signed by Brand (on his own behalf and on behalf of B&B), counsel for the plaintiffs, Mitchell, and New Life, stipulates to the dismissal with prejudice of Mitchell and New Life. Id. Over the next week, the plaintiffs, in support of their motion for default judgment, filed two affidavits, a memorandum brief, and a letter from a medical doctor opining on Dooley's mental condition. Doc. #31; Doc. #32; Doc. #34; Doc. #35.

         II Analysis

         Pursuant to “Rule 55 of the Federal Rules of Civil Procedure, federal courts have the authority to enter a default judgment against a defendant who has failed to plead or otherwise defend upon motion of the plaintiff.” J & J Sports Prods., Inc. v. Morelia Mexican Rest., Inc., 126 F.Supp.3d 809, 813 (N.D. Tex. 2015). “Under Fifth Circuit law, there are three steps to obtaining a default judgment: first, default by the defendant; second, clerk's entry of default; and third, entry of a default judgment.” Gray v. MYRM Holdings, L.L.C., No. A-11-cv-180, 2012 WL 2562369, at *3 (W.D. Tex. June 28, 2012) (citing N.Y. Life. Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996)) (emphases omitted). The first two steps have been satisfied here. Thus, the only issue left to consider is whether default judgment should be entered.[1] In making this determination, the Court conducts a three-question analysis: (1) “whether the entry of default judgment is procedurally warranted;” (2) “whether there is a sufficient basis in the pleadings for the judgment;” and (3) “what form of relief, if any, the plaintiff should receive.” J & J Sports, 126 F.Supp.3d at 814.

         A. Procedural Justification

         In determining whether a default judgment is procedurally warranted, a court should consider: (1) “whether material issues of fact are at issue;” (2) “whether there has been substantial prejudice;” (3) “whether the grounds for default are clearly established;” (4) “whether the default was caused by a good faith mistake or excusable neglect;” (5) “the harshness of a default judgment;” and (6) “whether the court would think itself obliged to set aside the default on the defendant's motion.” Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).

         First, where as here, a party fails to respond to or answer the complaint, there are no material issues of fact at issue. See John Perez Graphics & Design, LLC v. Green Tree Inv. Grp., Inc., No. 3:12-cv-4194, 2013 WL 1828671, at *3 (N.D. Tex. May 1, 2013) (“Green Tree has not filed a responsive pleading or otherwise appeared in this case, and thus has not contested any facts presented in Plaintiff's Complaint.”).

         Second, a failure to respond causes prejudice because “failure to respond … threatens to bring the adversary process to a halt, effectively prejudicing Plaintiff's interests in pursuing its rights afforded by law.” Id.

         Third, as mentioned above, the grounds for default (default and entry of default) have been clearly ...

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