Montgomery et al v. EPC Group.net et al

Filing 13

ORDER granting plaintiffs' 6 12 Motion for Default Judgment. Plaintiffs motion for default judgment against OConnor Enterprise Group is granted. OConnor Enterprise Group is ordered to pay plaintiffs $27,973.16 for wages due Ms. Montgo mery, $8,347.31 for wages due Ms. Johnson, $20,685.00 for attorneys fees, and $5,150.00 for half of the fees paid by plaintiffs to the AAA. Plaintiffs claims against Mr. OConnor are hereby dismissed without prejudice for failure to perfect timely service. Signed by Judge Kristine G. Baker on 1/29/14. (kpr)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
TINA MONTGOMERY
and KAREN JOHNSON
v.

PLAINTIFFS
Case No. 4:13-cv-00298-KGB

O’CONNOR ENTERPRISE GROUP,
INC., d/b/a EPC GROUP.NET, and
ERRIN O’CONNER

DEFENDANTS

OPINION AND ORDER
On May 17, 2013, plaintiffs Tina Montgomery and Karen Johnson filed this action
against O’Connor Enterprise Group, Inc. and Errin O’Conner.

Plaintiffs request in their

complaint that the Court confirm an award in their favor by an American Arbitration Association
(“AAA”) Arbitrator pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and state law.
The AAA Arbitrator awarded plaintiffs damages based on their claims for breach of contract,
failure to pay lost wages, and fraud, as well as attorney’s fees.
I.

O’Connor Enterprise Group
A.

Default Judgment

Before the Court is plaintiffs’ motion for default judgment against O’Connor Enterprise
Group (Dkt. No. 12). On September 27, 2013, plaintiffs’ attorney Lucien Gillham submitted an
affidavit swearing that copies of the summons and complaint were mailed by certified mail,
return receipt requested, to defendant O’Connor Enterprise Group a copy of the return receipt
card with signature was attached (Dkt. No. 5). Because defendants did not file a response to
plaintiffs’ complaint, plaintiffs applied for default judgment against O’Connor Enterprise Group
(Dkt. No. 6), which the Court referred to the Clerk of the Court for consideration (Dkt. No. 9).
On December 3, 2013, the Clerk entered default, stating that O’Connor Enterprise Group “was

served on 09/16/13, with a summons requiring an answer within 21 days from that date, and no
answer or other responsive pleading has been filed. Pursuant to Rule 55(a) of the Federal Rules
of Civil Procedures, default is herein entered against defendant” (Dkt. No. 10). Based on the
record before the Court, O’Connor Enterprise Group still has not responded to plaintiffs’
complaint.
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., 796 F. Supp. 2d
946, 951 (N.D. Iowa 2011). First, pursuant to Rule 55(a), the party seeking a default judgment
must have the Clerk of Court 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 a grant of default judgment under Rule
55(b). Id.
The Clerk having entered properly a Clerk’s Default under Rule 55(a), the Court now
proceeds to a determination of plaintiffs’ motion for default judgment under Rule 55(b). This
Court has discretion when deciding whether to enter a default judgment. Ackra Direct Mktg.
Corp. v. Fingerhut Corp., 86 F.3d 852, 856 (8th Cir. 1996). In determining whether to enter
default judgment, the Court may consider:
the amount of money potentially involved; whether material issues of fact or
issues of substantial public importance are at issue; whether the default is largely
technical; whether plaintiff has been substantially prejudiced by the delay
involved; and whether the grounds for default are clearly established or are in
doubt. Furthermore, the court may consider how harsh an effect a default
judgment might have; or whether the default was caused by a good-faith mistake
or by excusable or inexcusable neglect on the part of the defendant.

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Charles A. Wright, et al., Federal Practice & Procedure, § 2685 (3d ed. 2013) (West) (citations
omitted) (collecting cases). “Default judgment for failure to defend is appropriate when the
party's conduct includes willful violations of court rules, contumacious conduct, or intentional
delays. On the other hand, default judgment is not an appropriate sanction for a marginal failure
to comply with time requirements.” Ackra Direct Mktg. Corp., 86 F.3d at 856 (internal citations
and quotation marks omitted).
Based on the above factors and case law, the Court determines that default judgment is
appropriate and grants plaintiffs’ motion for default judgment.

First, plaintiffs have been

substantially prejudiced by the delay involved, as they continue to wait upon the award granted
by the AAA Arbitrator, an award to which they appear entitled based on the record before the
Court. “Judicial review of arbitration rulings is limited. Indeed, . . . the decision of an arbitrator
who has not exceeded his contractual authority is almost always upheld.” MidAmerican Energy
Co. v. Int’l Bhd. of Elec. Workers Local 499, 345 F.3d 616, 619 (8th Cir. 2003) (internal citations
and quotation marks omitted). There is no evidence before the Court that the AAA Arbitrator
here exceeded his contractual authority.

Second, the default is not merely technical, as

O’Connor Enterprise Group still has not responded to this lawsuit. Based on the record before
the Court, there is no reason to think O’Connor Enterprise Group’s failure to respond is a goodfaith mistake or excusable neglect.

Accordingly, O’Connor Enterprise Group’s failure to

respond is not a marginal failure to comply with time requirements.
B.

Damages

Because the Court has entered default judgment, the Court now must determine the
amount of damages for which O’Connor Enterprise Group is liable. Under Rule 55(b)(2), the
Court may hold an evidentiary hearing to determine damages, but a hearing is not required if the

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amount is ascertainable from definite figures, facts, and evidence provided by plaintiffs. Holman
v. National Postal Mail Handlers Union, 117 F.3d 1422 (8th Cir. 1997) (per curiam); Taylor v.
City of Ballwin, 859 F.2d 1330, 1332-33 (8th Cir. 1988); Fed. R. Civ. P. 55(b)(2) (“The conduct
may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to . . .
determine the amount of damages.”).
Plaintiffs request that the AAA Arbitrator’s award be confirmed by this Court entering
judgment against O’Connor Enterprise Group in the amount of $27,973.16 for wages due Ms.
Montgomery, $8,347.31 for wages due Ms. Johnson, $20,685.00 for attorney’s fees, and
$5,150.00 for half of the fees paid by plaintiffs to the AAA. In support, plaintiffs have provided
a copy of the interim award and supplementary final award of the AAA Arbitrator. In the
interim award, the AAA Arbitrator calculated, found appropriate, and awarded plaintiffs the
above amounts for wages owed (Dkt. No. 2-1). In the supplementary final award, the AAA
Arbitrator calculated, found reasonable, and awarded plaintiffs the above amount for attorney’s
fees, and also determined that “[a]ll fees, other than attorney’s fees, are to be divided equally . . .
.” (Dkt. No. 6-1, at 8). Plaintiffs attached an invoice/statement showing that the total balance
due for all AAA fees was $10,300.00, which plaintiffs claim they were forced to pay.
The Court determines that the amount of damages is ascertainable based on the figures,
facts, and evidence provided by plaintiffs.

Accordingly, the Court confirms the AAA

Arbitrator’s award. O’Connor Enterprise Group is ordered to pay plaintiffs $27,973.16 for
wages due Ms. Montgomery, $8,347.31 for wages due Ms. Johnson, $20,685.00 for attorney’s
fees, and $5,150.00 for half of the fees paid by plaintiffs to the AAA.

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II.

Errin O’Connor

On December 2, 2013, the Court granted plaintiffs’ second motion to extend time to serve
Mr. O’Connor, giving plaintiffs up to and including January 12, 2014, to perfect service (Dkt.
No. 9). The Court advised plaintiffs that they could file another motion to extend time to serve,
if necessary and appropriate (Dkt. No. 9, at 3). Based on the record before the Court and filings
made, plaintiffs have neither filed another motion to extend time to serve nor perfected service
on Mr. O’Connor. When a defendant is not served within the time provided, the Court must
dismiss the action without prejudice or order that service be made within a specified time. Fed.
R. Civ. P. 4(m). Plaintiffs’ claims against Mr. O’Connor are hereby dismissed without prejudice
for failure to perfect timely service of process.
***
In sum, plaintiffs’ motion for default judgment against O’Connor Enterprise Group is
granted. O’Connor Enterprise Group is ordered to pay plaintiffs $27,973.16 for wages due Ms.
Montgomery, $8,347.31 for wages due Ms. Johnson, $20,685.00 for attorney’s fees, and
$5,150.00 for half of the fees paid by plaintiffs to the AAA. Plaintiffs’ claims against Mr.
O’Connor are hereby dismissed without prejudice for failure to perfect timely service.
IT IS SO ORDERED this 29th day of January, 2014.

__________________________________ 
KRISTINE G. BAKER
UNITED STATES DISTRICT JUDGE

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