United States of America v. Sibley et al

Filing 20

ORDER AND REASONS granting 14 Motion for Default Judgment against William Sibley. Signed by Chief Judge Sarah S. Vance on 10/15/13. (jjs, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES OF AMERICA

CIVIL ACTION

VERSUS

NO: 13-266

WILLIAM H. SIBLEY,
DANIEL E. BECNAL, JR., and
BRADLEY D. BECNAL

SECTION: R(4)

ORDER AND REASONS
The United States moves the Court to enter a default
judgment against defendant William Sibley.1 For the following
reasons, the Court GRANTS the government's motion.

I.

Background
On February 13, 2013, the United States brought this civil

action against Sibley, Daniel Becnal, Jr., and Bradley Becnal.2
Count I of the United States' complaint seeks to reduce to
judgment unpaid federal income tax liabilities assessed against
Sibley for the years 2004, 2005, 2006, 2008 and 2009. The
complaint details Sibley's outstanding liabilities for each of
these years, including penalties and interest.3 It alleges that
"[a]s of December 5, 2012, Sibley owes a total of $2,727,166.02

1

R. Doc. 14.

2

R. Doc. 1.

3

Id. at 2-4.

. . . plus further interest and statutory additions thereon as
allowed by law."4
Count II of the complaint seeks to collect Sibley's unpaid
federal income tax liabilities by foreclosing tax liens the
United States held against Sibley's interest in two limited
liability companies.5 Daniel and Bradley Becnal are members and
interest holders in the two companies.6 On August 16, 2013, the
United States and the Becnals moved jointly to dismiss Count II
pursuant to a settlement agreement.7 On August 28, 2013, the
Court granted the motion, dismissing Count II and dismissing the
Becnals as parties to the case.8
On March 25, 2013, Brent Schouest, a revenue officer with
the Internal Revenue Service ("IRS"), served a summons on Sibley
in this action.9 Sibley's response to the United States'
complaint was due 21 days from the date of service of the summons
– i.e., on April 15, 2013. See Fed. R. Civ. P. 12(1)(A). Sibley
filed no answer or motion by that date.

4

Id. at 5.

5

Id. at 1.

6

Id.

7

R. Doc. 18.

8

R. Doc. 19.

9

R. Doc. 9.
2

On April 17, 2013, the United States filed a motion for
entry of default against Sibley.10 The clerk entered default
against Sibley on the same day.11
On May 3, 2013, the United States filed its motion for
default judgment as to Sibley. It now seeks judgment in the
amount of $2,761,170.41 for Sibley's unpaid federal income tax
liabilities, including accrued interest through May 1, 2013.12
Attached to the United States' motion is a declaration by
Schouest delineating Sibley's tax liability for each of the five
relevant years, including penalties and interest.13 Attached to
Schouest's declaration are IRS account transcripts detailing
Sibley's tax liability,14 as well as computational printouts
calculating Sibley's unpaid balance for each year plus accrued
interest through May 1, 2013.15 The total for all five years is
$2,761,170.41.

10

R. Doc. 10.

11

R. Doc. 11.

12

R. Doc. 14 at 1.

13

R. Doc. 14-1.

14

Id. at 6-15.

15

Id. at 16-20.
3

II.

Legal Standard
Under Federal Rule of Civil Procedure 55(b), the Court may

enter a default judgment against a party when it fails to plead
or otherwise respond to the plaintiff’s complaint within the
required time period. Fed. R. Civ. P. 55(b). A plaintiff who
seeks a default judgment against an unresponsive defendant must
proceed through two steps. First, the plaintiff must petition the
court for the entry of default, which is simply "a notation of
the party’s default on the clerk’s record of the case." Dow Chem.
Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 335 (2d Cir.
1986); see also United States v. Hansen, 795 F.2d 35, 37 (7th
Cir. 1986) (describing the entry of default as "an intermediate,
ministerial, nonjudicial, virtually meaningless docket entry").
Before the clerk may enter the default, the plaintiff must show
"by affidavit or otherwise" that the defendant "has failed to
plead or otherwise defend." Fed. R. Civ. P. 55(a). Beyond that
requirement, however, the entry of default is largely mechanical.
After the defendant's default has been entered, the
plaintiff may request the entry of judgment on the default. In
that context, the court deems the plaintiff's well-pleaded
factual allegations admitted. See Nishimatsu Const. Co., Ltd. v.
Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). At the
same time, the court does not hold the defaulting defendant "to
admit facts that are not well-pleaded or to admit conclusions of
4

law." Id. If the plaintiff’s claim is for a sum certain and the
defendant has not made an appearance in court, the clerk may
enter a default judgment. Fed. R. Civ. P. 55(b)(1). In all other
cases, "the party must apply to the court for a default
judgment." Fed. R. Civ. P. 55(b)(2). No party is entitled to a
default judgment as a matter of right. Lewis v. Lynn, 236 F.3d
766, 767 (5th Cir. 2001) (per curiam) (quoting Ganther v. Ingle,
75 F.3d 207, 212 (5th Cir. 1996)). The disposition of a motion
for the entry of default judgment ultimately rests within the
sound discretion of the district court. Mason v. Lister, 562 F.2d
343, 345 (5th Cir. 1977).

III. Discussion
A. Jurisdiction
Before entering judgment, a district court must "look into
its jurisdiction both over the subject matter and the parties."
System Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d
322, 324 (5th Cir. 2001) (quoting Williams v. Life Sav. & Loan,
802 F.2d 1200, 1203 (10th Cir. 1986)) (quotation marks removed).
Judgment entered in the absence of jurisdiction is void, and the
Court must therefore refrain from entering judgment if its
jurisdiction is uncertain.
Here, the Court has subject matter jurisdiction over the
action under 28 U.S.C. §§ 1340 and 1345 and under 26 U.S.C. §
5

7402(a). The Court also has personal jurisdiction over Sibley.
The record demonstrates that Sibley resides in the Eastern
District of Louisiana and that the government properly served
him.16 Accordingly, the Court finds that it has jurisdiction over
both the subject matter and the parties.
B. Entry of Default Judgment
The record shows that Sibley was served with process on
March 25, 2013, but has failed to plead or otherwise defend
against the United States' claims. Indeed, Sibley has made no
appearance at all. Although judgments by default are generally
disfavored, see Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th
Cir. 1998), the Court finds that Sibley’s failure to appear has
made it impossible to achieve a "just, speedy, and inexpensive
disposition" of this case on the merits. Sun Bank of Ocala v.
Pelican Homestead and Sav. Ass’n, 874 F.2d 274, 276 (5th Cir.
1989). The record does not reveal any excuse for Sibley’s failure
to appear. Accordingly, the Court will enter a default judgment
against him.
C. Amount of Liability
The United States alleges that, as of May 1, 2013, Sibley's
total tax liability for the years 2004, 2005, 2006, 2008 and 2009
is $2,761,170.41. This figure comprises Sibley's unpaid income
tax for each of those years, various penalties, and interest

16

R. Doc. 9.
6

pursuant to 26 U.S.C. §§ 6621 and 6622.17 Schouest's declaration,
and the accompanying IRS account transcripts and computational
printouts, confirm the accuracy of this figure.18

IV.

Conclusion
For the foregoing reasons, the United States' motion for

default judgment is GRANTED. Judgment is entered against Sibley
for his unpaid federal income tax liabilities for the tax years
2004, 2005, 2006, 2008 and 2009 in the amount of $2,761,170.41 as
of May 1, 2013, plus interest pursuant to 28 U.S.C. § 1961(c)(1)
and 26 U.S.C. §§ 6621 and 6622 and statutory additions accruing
thereafter as provided by law.

15th

New Orleans, Louisiana, this

day of October, 2013.

SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

17

R. Doc. 14 at 4-7.

18

R. Doc. 14-1 at 6-20.
7