Powell et al v. Brossett

Filing 13

ORDER OF DISMISSAL WITHOUT PREJUDICE; denying 12 Motion for Default Judgment. Signed by Honorable Susan O. Hickey on September 15, 2020. (mll)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION
WILLIAM POWELL and
STEPHANIE POWELL
v.

PLAINTIFFS
Case No. 4:19-cv-4032

JAMES DAVID BROSSETT, Individually and
d/b/a BROSSETT CORPORATION

DEFENDANTS

ORDER
Before the Court is Plaintiffs’ Motion for Default Judgment against Defendant pursuant to
Fed. R. Civ. P. 55(b). ECF No. 12. Plaintiffs allege in their complaint that they “made several
ongoing and personal loans to the benefit of the Defendant and his business in the estimated sum
of $325,000 plus interest, to which the Defendant has failed and refused to uphold the agreements
in which he executed with the terms and conditions of repayment of these loans.” ECF No. 1, p.
2. In the case caption, Plaintiff names “James David Brossett, Individually and d/b/a Brossett
Corporation” as the Defendant. In support of their claim, Plaintiffs attach to their complaint six
loan agreements between William Powell and the Brossett Corporation and one loan agreement
between the Brossett Corporation and Stephanie Langley, who the Court assumes is Plaintiff
Stephanie Langley Powell. ECF No. 1, pp. 9-29. These loan agreements are signed by Dave
Brossett. Printed underneath the signature line is “Brossett Corporation (Borrower)” and printed
on the next line is “Dave Brossett.” In the complaint, Plaintiffs “pray that the Defendant be found
to be in default of the personal loans issued to him for the benefit of his business. That they be
awarded a sum commensurate with the estimated sum of the loans plus interest, for an award of
attorney’s fees and costs . . . .” ECF No. 1, p. 2.
Defendant has yet to file an answer or otherwise respond to the complaint. On August 29,
2019, the Clerk of Court entered a default against Defendant pursuant to Fed. R. Civ P. 55(a).

ECF No. 11.
In the instant Motion for Default Judgment (ECF No. 12), Plaintiff William Powell seeks
a sum certain in the amount of $225,000.00, which he claims represents the total principal amount
due under eight loans he made to the Brossett Corporation. 1 Plaintiff Stephanie Powell seeks a
sum certain in the amount of $25,000.00, which she claims represents the total principal amount
due under one loan she made to Defendant. Plaintiffs seek an additional award of $210,000.00,
which they claim is the amount of accrued interest on the unpaid loans per the loan agreements.
ECF No. 19. Plaintiffs also seek attorney’s fees of $2,952.25 and costs of $608.04.
A district court may enter a default judgment when a party fails to appropriately respond
in a timely manner. See, e.g., Inman v. Am. Home Furniture Placement, Inc., 120 F.3d 117, 119
(8th Cir. 1997). If the court determines that a defendant is in default, the court shall take as true
factual allegations of the complaint, except those relating to the amount of damages. Everyday
Learning Corp. v. Larson, 242 F.3d 815, 818 (8th Cir. 2001). However, the court must ensure
that “the unchallenged facts constitute a legitimate cause of action” prior to entering final
judgment. See Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010).
In the present case, the Court must determine whether the unchallenged facts in Plaintiff’s
complaint constitute a legitimate cause of action against “James David Brossett, Individually and
d/b/a Brossett Corporation.” For Plaintiffs to prevail on their breach of contract claims against
James David Brossett in his role as either a corporate officer or agent for Brossett Corporation, 2
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The Motion for Default Judgment (ECF No. 12) requests a judgment in the total amount of $250,000.00, which
Plaintiffs state is the unpaid principal balance of “eight (8) loans made to the Defendants by William Powell and one
(1) made by Stephanie Langley Powell . . . .” ECF No. 12, p. 1. Plaintiffs have attached copies of seven loan
agreements between William Powell and the Brossett Corporation, with a total principal amount of $375,000.00.
Plaintiffs have attached a copy of one loan agreement between Stephanie Langley and the Brossett Corporation, with
a total principal amount of $25,000.00. Plaintiffs have also attached a copy of a worksheet in which they claim that
the “total amount borrowed” is $250,000.00 and the “balance of principal payments due” is $250,000.00. ECF No.
12, p. 31. These figures are inconsistent, and there is no explanation for the inconsistencies.
2
Plaintiffs attached to their complaint information from the Louisiana Secretary of State’s Office indicating that
James D. Brossett is the registered agent and President of the Brossett Corporation. ECF No. 1, p. 4. As of August
21, 2018, the Brossett Corporation was an active corporation in good standing in Louisiana. ECF No. 1, p. 4.
1

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the Court must find a theory in the complaint to support individual liability. See Marshall v.
Baggett, 616 F.3d 849, 854 (8th Cir. 2010). No such theory exists here. There is nothing in the
complaint to support an assertion that the Brossett Corporation was a sham corporation or an
indistinct identity of James David Brossett. There are no allegations of fraud. Further, the loan
agreements are clear that James David Brossett executed the agreements in his official capacity on
behalf of the Brossett Corporation, and Plaintiffs have not countered this fact with a factual
assertion as to why James David Brossett instead bound himself as an individual. Accordingly,
James David Brossett cannot be held individually liable for breach of the loan agreements.
Perhaps Plaintiffs were attempting to bring breach of contract claims against the Brossett
Corporation by using the “d/b/a” styling in the caption of the complaint. However, the body of
the complaint clearly refers to one individual defendant throughout. In the complaint, Plaintiffs
use the phrase “the Defendant” when referring to James David Brossett and then refer to his
“business” but never specifically refer to the “Brossett Corporation” or allege that the Brossett
Corporation breached the loan agreements. There is no allegation that James D. Brossett is a sole
proprietor doing business under another name. Accordingly, the Court cannot find that Plaintiffs
have stated any claim against the Brossett Corporation, and thus Plaintiffs’ complaint must fail as
a matter of law. See Marshall, 616 F.3d at 855.
Upon consideration of Plaintiffs’ Motion for Default Judgment (ECF No. 12), the Court
finds that the motion should be and hereby is DENIED. Further, because Plaintiffs fail to state a
claim against James David Brossett individually, the Court finds that the complaint should be and
hereby is DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED, this 15th day of September, 2020.
/s/ Susan O. Hickey
Susan O. Hickey
Chief United States District Judge
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