United States District Court, N.D. Mississippi, Greenville Division
CAPITAL ONE AUTO FINANCE, a division of Capital One N.A. PLAINTIFF
NABORS, INC. DEFENDANT
M. BROWN UNITED STATES DISTRICT JUDGE
the Court is Capital One Auto Finance's motion for
default judgment against Nabors, Inc. Doc. #23.
December 9, 2016, Capital One Auto Finance filed a complaint
against Nabors, Inc. in the United States District Court for
the Northern District of Mississippi, alleging breach of
contract, fraud, and conversion concerning its purchase of
vehicle financing contracts from Nabors. Doc. #1 at 26-27.
Service of the summons and complaint was executed on January
7, 2017. Doc. #3. On February 8, 2017, Capital One moved for
entry of default against Nabors for failure to plead or
otherwise defend. Doc. #5 at 1. The Clerk of the Court
entered a default the next day. Doc. #6.
March 16, 2017, United States Magistrate Judge Jane M.
Virden, concluding that the complaint “fail[ed] to
satisfactorily allege the citizenship of Capital One, ”
issued an order allowing Capital One seven days to correct
the defect in its jurisdictional allegations by filing an
amended complaint to avoid “dismissal of this case for
lack of subject matter jurisdiction.” Doc. #7 at 2.
Four days later, Capital One amended its complaint to allege
that it is a division of Capital One, National Association,
and that Capital One, National Association's articles of
incorporation designate a main office in McLean,
Virginia. Doc. #8 at 1.
no activity in the case for over a year, on April 4, 2018,
Judge Virden ordered Capital One to show cause, within five
business days, “why this case should not be dismissed
for failure to prosecute.” Doc. #9. Two days later,
Capital One moved for entry of default against Nabors. Doc.
#10. The Clerk of the Court entered a default on April 9,
2018. Doc. #11. On April 10, 2018, Capital One moved for an
extension through April 25, 2018, to respond to the show
cause order, which Judge Virden granted the following day.
Doc. #12 at 3; Doc. #13.
April 20, 2018, Capital One filed a motion for leave to file
a second amended complaint. Doc. #14. On April 25, 2018,
Capital One filed a response to the show cause order stating,
“[Capital One] does not anticipate Nabors will appear
and defend the allegations. Thus, upon expiration of the time
to respond [to the second amended complaint], [Capital One]
will seek a Clerk's Default ….” Doc. #15 at
4. Judge Virden granted Capital One's motion for leave to
amend on May 2, 2018. Doc. #16. The same day, Capital One
filed a second amended complaint. Doc. #17. Service of the
summons and second amended complaint was executed on May 15,
2018. Doc. #20.
8, 2018, Capital One moved for entry of default against
Nabors based on the second amended complaint. Doc. #21. Three
days later, the Clerk of the Court entered a default. Doc.
#22. On June 12, 2018, Capital One filed this motion for
default judgment. Doc. #23.
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.
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. See Docs. #21, #22. Thus,
the only issue left to consider is whether default judgment
should be entered. 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.
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.
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
Nabors' failure to respond causes prejudice to Capital
One because it “threatens to bring the adversary
process to a halt, effectively prejudicing [Capital
One's] interests in pursuing its rights afforded by
as mentioned above, the grounds for default (default and
entry of default) have been clearly established.
there is no evidence before the Court that “the default
was caused by a good faith mistake or excusable neglect
….” Lindsey, 161 F.3d at 893.
Nabors has had more than eight months to attempt to set aside
the default. “[W]hile default judgment is a harsh
remedy, any harshness is mitigated where … the
defendant has had substantial time to correct the
default.” Helena Chem. Co. v. ...