Nutt et al v. Kees et al

Filing 40

ORDER OF DEFAULT granting 35 Plaintiffs' Motion for Default Judgment against Osceola Nursing Home, LLP and Osceola Healthcare, PLLC. The Court will schedule a damages hearing at the conclusion of the time for conducting discovery, which currently is March 16, 2012. Signed by Judge Susan Webber Wright on 12/5/2011. (jct)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
JONESBORO DIVISION
KEVIN NUTT and LISA NUTT,

*
*
Plaintiffs,
*
vs.
*
*
*
STAFFORD KEES; CARROLL COUNTY
*
NURSING AND REHAB CENTER, INC., an *
Arkansas Corporation; OSCEOLA NURSING *
HOME, LLP, an Arkansas Limited Liability *
Partnership; OSCEOLA THERAPY AND
*
LIVING CENTER, INC., an Arkansas
*
Corporation; OSCEOLA HEALTHCARE,
*
PLLC, an Arkansas Professional
*
Limited Liability Company; and HOPE
*
HEALTHCARE, LLC, an Arkansas Limited *
Liability Company,
*
*
Defendants.
*

No. 3:10-cv-00307-SWW

ORDER OF DEFAULT
Plaintiffs Kevin Nutt and Lisa Nutt bring this action pursuant to the Employee
Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., alleging that
defendants, Stafford Kees, Carroll County Nursing & Rehab Center, Inc., Osceola Nursing
Home, LLP, Osceola Therapy & Living Center, Inc., Osceola Healthcare, PLLC, and Hope
Healthcare, LLC, failed to make health insurance premium payments to a group health plan
despite making deductions from pay to cover such premiums. Plaintiffs further allege that they
were employed by defendants in various capacities and that their employment was terminated in
retaliation for insisting that defendants provide the benefits they had been promised.
By Order entered August 10, 2011 [doc.#30], the Court informed the parties that it would
permit the the law firm of Mitchell, Williams, Selig, Gates & Woodyard, PLLC (The “Law

Firm”) to withdraw as counsel of record for separate defendants. The Court noted, however,
that because two of the separate defendants–Osceola Nursing Home, LLP and Osceola
Healthcare, PLLC–are business entities and the law does not allow a corporation or other
business entity to proceed pro se, the Court would not grant the Law Firm’s motion to withdraw
at that time but would impose a withdrawal notice period in order to allow separate defendants
time in which to obtain substitute counsel.1 In this respect, the Court informed the parties that
the Law Firm’s motion to withdraw from representation of Stafford Kees, Osceola Nursing
Home, LLP, and Osceola Healthcare, PLLC would be granted either when substitute counsel
enters an appearance on their behalf or on September 1, 2011, whichever occurs first. The Court
directed that the Law Firm notify separate defendants Stafford Kees, Osceola Nursing Home,
LLP, and Osceola Healthcare, PLLC in writing that its motion to withdraw will be granted no
later than September 1, 2011, that a corporation or business entity cannot proceed pro se in
federal court, and that Osceola Nursing Home, LLP and Osceola Healthcare, PLLC risk default
judgments if they fail to obtain substitute counsel before September 1, 2011.
On August 30, 2011, the Law Firm filed a Certificate of Compliance which reflects that
on August 11, 2011, the Law firm fully complied with this Court’s August 10th Order. Despite
ample notice, no substitute counsel entered an appearance for separate defendants Stafford Kees,
Osceola Nursing Home, LLP, and Osceola Healthcare, PLLC.
By Order entered September 1, 2011 [doc.#32], the Court, in accordance with this

1

The Court noted that if the Law Firm’s motion to withdraw as counsel of record for Osceola Nursing
Home, LLP and Osceola Healthcare, PLLC were granted immediately, these defendants would technically be in
default at that time. See Tribuilt Const. Group, LLC v. International Fidelity Ins. Co., No. 2:10-cv-02052, 2011 WL
2357659, at *1 (W.D.Ark. June 13, 2011) (noting that business entities “were technically in default when they failed
to obtain substitute counsel, as the law does not allow a corporation or other business entity to proceed pro se”)
(citing Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852 (8th Cir. 1996)).

-2-

Court’s August 10th Order and the Law Firm’s Certificate of Compliance, granted the Law
Firm’s motion to withdraw as counsel for separate defendants Stafford Kees, Osceola Nursing
Home, LLP, and Osceola Healthcare, PLLC.
On November 15, 2011, plaintiffs filed a motion [doc.#35] for default judgment against
Osceola Nursing Home, LLP and Osceola Healthcare, PLLC as these entities failed to obtain
substitute counsel. None of the defendants responded in opposition to plaintiffs’ motion for
default judgment.
Rule 55 of the Federal Rules of Civil Procedure contemplates a two step process for the
entry of default judgments. Fraserside IP L.L.C. v. Youngtek Solutions Ltd., — F.Supp.2d —,
2011 WL 2689058, at *2 (N.D.Iowa July 12, 2011) (citation and internal quotation marks
omitted). First, pursuant to Rule 55(a), the party seeking a default judgment must have the Clerk
enter the default by submitting the required proof that the opposing party has failed to plead or
otherwise defend. Id. Second, pursuant to Rule 55(b), the moving party may seek entry of
judgment on the default under either subdivision (b)(1) or (b)(2) of the rule. Id. Entry of default
under Rule 55(a) must precede grant of a default judgment under Rule 55(b). Id.
By Order entered December 1, 2011 [doc.#37], the Court construed the present motion as
one for entry of default by the Clerk and for entry of default by this Court. Accordingly, the
Court referred the motion to the Clerk for consideration and directed that in the event that a
clerk’s default is entered, the Clerk not term the motion. Rather, the Court would then consider
plaintiffs’ motion for default judgment pursuant to Fed.R.Civ.P. 55(b).
On December 5, 2011, the Clerk entered a Clerk’s Default [doc.#38] against Osceola
Nursing Home, LLP, and Osceola Healthcare, PLLC, which provides as follows:

-3-

The Defendants, OSCEOLA NURSING HOME, LLP, and OSCEOLA
HEALTHCARE, PLLC, have not obtained substitute counsel, as directed by the
Court in its Order of August 10, 2011 (document no. 30). Despite ample notice, no
substitute counsel has entered an appearance for Defendants OSCEOLA
NURSING HOME, LLP, and OSCEOLA HEALTHCARE, PLLC, as of this date.
The parties were warned that they risked default judgment if they failed to obtain
substitute counsel. Furthermore the Defendants, OSCEOLA NURSING HOME,
LLP, and OSCEOLA HEALTHCARE, PLLC, failed to respond to Plaintiffs’
Motion for Default Judgment (document no. 35).
Therefore, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure,
default is herein entered against the Defendants, OSCEOLA NURSING HOME,
LLP, and OSCEOLA HEALTHCARE, PLLC.

The Clerk having properly entered a Clerk’s Default under Fed.R.Civ.P. 55(a), the Court
now proceeds to a determination of plaintiffs’ motion for default judgment under Fed.R.Civ.P.
55(b). Because the law does not allow a corporation or other business entity to proceed pro se in
federal court, and as separate defendants Osceola Nursing Home, LLP and Osceola Healthcare,
PLLC have failed to obtain substitute counsel despite ample warning of the consequences of
their failure to do so, these defendants are in default. Accordingly, the Court grants plaintiffs’
unopposed motion for default judgment [doc.#35] against Osceola Nursing Home, LLP and
Osceola Healthcare, PLLC. The Court will schedule a damages hearing at the conclusion of the
time for conducting discovery, which currently is March 16, 2012. See Doc.#36.2

IT IS SO ORDERED this 5th day of December 2011.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE

2

In their motion for default judgment, plaintiffs ask that the Court “[d]efer assessing damages against
[these defendants] until such time as Plaintiffs have proved the amount of said damages.” Plaintiffs may request a
damages hearing prior to March 16, 2012, should they so choose (although docket considerations will factor into
setting a date for a damages hearing).

-4-