FHL, Inc. et al v. Walker et al
OPINION. An appropriate judgment will be entered. Signed by Honorable Judge Myron H. Thompson on 6/9/2016. (dmn, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
FHL, INC. and CHRISTOPHER
HARRY JAMES WALKER,
CIVIL ACTION NO.
Plaintiffs FHL, Inc. (“FHL”) and Christopher Yannon
filed this case against defendant Harry James Walker
seeking injunctive relief, a declaratory judgment, and
misappropriation of money Yannon and others invested in
Jurisdiction is proper under 28 U.S.C. § 1332
cause is now before the court on plaintiffs’ motion for
entry of default judgment, in which they seek judgment
on their accounting claim in the amount of $ 100,000
for Yannon and $ 350,000 for FHL.
For the following
reasons, the motion will be granted.
I. DEFAULT-JUDGMENT STANDARD
entry of a default judgment.”
Nyesa Costa Rica v.
Wilson Cap. Group Holdings, LLC, No. 11–22036–CIV, 2012
WL 1492344, at *3 (S.D. Fla. Apr. 27, 2012) (Seitz, J.)
(citing Tyco Fire & Sec. LLC v. Alcocer, 218 F. App'x
860, 863 (11th Cir. 2007)). “[A] default is not ‘an
absolute confession by the defendant of his liability
instead merely ‘an admission of the facts cited in the
Capitol Records v. Rita Carmichael, 508 F. Supp. 2d
However, “[t]he defendant is not held to
conclusions of law.”
Nishimatsu Constr. Co., Ltd. v.
A default judgment, including the specific nature
and extent of the relief sought, must be adequately
Gumbaytay, No. 2:07-CV-135-WKW, 2009 WL 1515912, at *8
(M.D. Ala. June 1, 2009) (Watkins, J.) (in entering a
default judgment, the court's “core duty is ‘to assure
damage award it enters’”) (quoting Anheuser–Busch, Inc.
Frazier v. Absolute Collection Serv.,
(Thrash, J.) (citing Antoine v. Atlas Turner, Inc., 66
F.3d 105, 111 (6th Cir. 1995) (“Use of affidavits in
1. See Bonner v. City of Pritchard, 661 F.2d 1206,
1209 (11th Cir. 1981) (en banc) (holding all decisions
of the former Fifth Circuit rendered prior to close of
business on September 30, 1981, binding in the Eleventh
process[.]”); Super Stop No. 701, Inc. v. BP Prods. N.
Am. Inc., No. 08-61389-CIV, 2009 WL 5068532, at *2 n.
4. (S.D. Fla. Dec. 17, 2009) (Cohn, J.)).
Based on the well-pleaded factual allegations of
the complaint and the affidavit submitted by Yannon in
support of the motion for default judgment (doc. no.
38-1), the court finds the following facts.
Yannon and Walker each held 50 % of the shares in a
company called Global First, Inc.
Walker suggested to
Yannon that he form a corporation in Panama to buy the
Autauga Water Bottling Company, Inc., which is located
Walker told Yannon he had contacts in
Panama who would finance the purchase of the bottling
organization” there, and that the water could be sold
in Panama at a Trump Hotel there.
Following Walker’s suggestion, Yannon incorporated
FHL in Panama, with Yannon serving as President and
owning 80 % of the company’s stock and Walker owning
20 % and serving as FHL’s “‘on site’ Manager.”
was responsible for “manag[ing] and operat[ing] [FHL’s]
(doc. no. 38-1) at 2-3.
Global First was FHL’s parent
company, and registered the brand name “Atagi” as a
trademark for the water-bottling company.
millions of dollars on deposit overseas, and encouraged
him to select a few friends and family to invest in
promissory note; three friends of Yannon loaned a total
of $ 250,000 in exchange for promissory notes as well.2
Yannon also paid $ 100,000 of his own funds into FHL.
purchase the Autauga Water Bottling Company and related
2. Other investments in the company were made in
exchange for stock certificates, which were never
Plaintiffs do not seek relief with regard to
these investments at this time.
company issued stock certificates to FHL, which were
held in escrow pending satisfaction of a $ 2,000,000
note for the purchase.
The contract specified that FHL
would pay $ 20,000 up front, $ 4,000 per month, a lump
payment of $ 1,250,000 after 12 months, and the final
payment by the end of 18 months.
The shareholders of
FHL, Inc.--that is, Yannon and Walker--agreed that all
stock and assets of FHL would be transferred to Global
Without Yannon’s knowledge, Walker took control of FHL
Walker failed to pay FHL’s notes and
perform other obligations of the company.
diverted or directed the diversion of the money Yannon
and others had invested in FHL, taking it for his own
Global First had trademarked for the bottling company.)
On September 12, 2013, an injunction was entered by
the Circuit Court for Autauga County, Alabama, in favor
of Davis and against FHL, requiring that FHL’s trustee
decision was upheld by the Alabama Supreme Court.
The notes FHL issued to its investors have come
due, and FHL has not paid them.
Plaintiffs filed the complaint in this case against
Walker and others on August 5, 2013, alleging that he
had illegally usurped Yannon’s authority over FHL and
information about the business.3
The following month,
other methods, plaintiffs had Walker personally served
with a summons and copy of the complaint.
3. Ten days later, Walker filed articles of
incorporation in Alabama for Atagi, Inc., using the
name Global First had trademarked for the bottling
of Service (doc. no. 15).
Walker then filed a pro se
answer to the complaint, in which he generally denied
all but the most minor allegations, and included his
(presumably then-current) address under his signature
which was properly served on Walker by mailing to this
Walker never answered the amended complaint,
and has not contacted the court to provide an updated
Mail sent to the address provided by Walker
has repeatedly been returned by the post office with
notations that the addressee had moved and the mail
could not be forwarded or was undeliverable.
On December 16, 2015, plaintiffs filed a request
that, pursuant to Rule 55(b)(1), the clerk of court
enter default and a default judgment against Walker in
the amount of $ 100,000 for Yannon and $ 350,000 for
FHL--the amount FHL owed to its investors on promissory
The clerk declined to enter the default because
construed plaintiffs’ request as motions for entry of
default and default judgment and ordered Walker to show
cause why the motions should not be granted.
(doc. no. 41).
The deadline passed, and Walker did not
See Opinion and Order (doc. no. 42).
The court has not heard from Walker in the several
months since then.
In their motion for default judgment, plaintiffs
seek judgment on only their claim for an accounting,
not their claims for declaratory and injunctive relief.
accounting claim: the return of the $ 350,000 loaned to
FHL by Yannon’s friends and family and the $ 100,000 he
put into the company.
Thus, the court will determine
entitlement to that limited remedy.
hearings ... when, to enter or effectuate judgment, it
needs to: ... conduct an accounting,” Fed. R. Civ. P.
55(b)(2), “Rule 55 does not require that testimony be
presented as a prerequisite to the entry of a default
10A Fed. Prac. & Proc. Civ. § 2688 (3d
ed. 1998 (April 2016)).
As plaintiffs have limited
record, and have chosen not to seek damages that would
require expert evidence and complex calculations, there
is no need for a hearing here.
representative must be served with written notice of
the application at least 7 days before the hearing.”
Plaintiffs’ request for entry of default judgment and
the court’s order to show cause on the motion for entry
of default and default judgment were served by mailing
to Walker at his last known address months ago.
which event service is complete upon mailing”).
has received sufficient notice under Rule 55(b)(2).
default judgment in the amount of $ 350,000 for FHL and
$ 100,000 for Yannon.
This is a classic case of a
corporate manager violating his fiduciary duty through
Plaintiffs have sufficiently established
based on the allegations of the complaint and Yannon’s
transfer the assets of FHL to himself or to a company
he had incorporated for his own purposes.
operate its acquisition of the bottling company; he was
not authorized to take the money invested in FHL for
4. While “Alabama courts have held uniformly that
a general manager has implied authority to take action
customary or usual in a particular business,” it is
safe to assume that managers in the water-bottling
business do not customarily appropriate corporate funds
for non-corporation purposes.
Richard A. Thigpen,
Alabama Practice Series: Alabama Corporation Law (4th
ed. 2012) § 5:43.
An appropriate judgment will be entered.
DONE, this the 9th day of June, 2016.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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