Enslein v. Di Mase et al

Filing 516

ORDER AND OPINION ENTERING DEFAULT AGAINSTDEFENDANTS DURASEAL PIPE COATINGS COMPANY LLC ANDDURASEAL HOLDINGS, S.R.L. AS TO LIABILITY ON COUNTS I, II, AND III. Signed on 9/16/19 by District Judge Ortrie D. Smith. (Richard, Tracey) (A copy of this order was mailed to all pro se parties.)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
JERALD S. ENSLEIN, in his capacity as )
Chapter 7 Trustee for Xurex, Inc.,
)
)
Plaintiff,
)
)
vs.
)
)
GIACOMO E. DI MASE, et al.,
)
)
Defendants.
)

Case No. 16-09020-CV-W-ODS

ORDER AND OPINION ENTERING DEFAULT AGAINST
DEFENDANTS DURASEAL PIPE COATINGS COMPANY LLC AND
DURASEAL HOLDINGS, S.R.L. AS TO LIABILITY ON COUNTS I, II, AND III
For the reasons stated below, the Court enters default against Defendants
DuraSeal Pipe Coatings Company LLC (“DuraSeal Pipe”) and DuraSeal Holdings, S.r.L.
(“DuraSeal Holdings”) on the issue of liability on Counts I, II, and III.
I.

BACKGROUND

Plaintiff Jerald Enslein filed this lawsuit in 2016, alleging claims against nine
individuals and three corporate entities. Relevant to this Order, the corporate entities
are DuraSeal Pipe, a Missouri limited liability company; DuraSeal Holdings, an Italian
company; and HDI, Holding Development Investment, S.A. (“HDI”), a Luxembourg
company.1 Doc. #236, ¶¶ 16- 17, 22; Doc. #237, ¶¶ 16-17, 22; Doc. #244, ¶¶ 16-17,
22; Doc. #274, ¶¶ 16-17, 22; Doc. #362, at 6; Doc. #364, at 13, 41-42.
DuraSeal Pipe, DuraSeal Holdings, and HDI were initially represented by
Spencer Fane LLP. In July 2017, Spencer Fane sought leave to withdraw due to,
among other things, their clients’ lack of “sufficient resources to continue to retain
counsel,” and the law firm’s continued representation “would very likely result in
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As explained infra, the Court’s entry of default pertains to DuraSeal Pipe’s and
DuraSeal Holdings’s liability as to Counts I, II, and III. Although this Order does not
enter default against HDI on Counts I, II, and III (because HDI is not a party to those
claims), the three entities have engaged in the same misconduct and risk even greater
consequences if they continue to violate the Court’s Orders and the Federal Rules of
Civil Procedure. Also, the Court considered entering default against HDI but chose to
hold that decision in abeyance. Accordingly, HDI is included in the Court’s discussion.

financial hardship.” Doc. #65. DuraSeal Pipe, DuraSeal Holdings, and HDI consented
to the motion, and the Court granted the motion. Doc. #65, at 2-3; Doc. #66.2
Beginning in November 2017, attorneys from Rouse Frets White Goss Gentile
Rhodes, P.C. entered appearances on behalf of DuraSeal Pipe, DuraSeal Holdings,
and HDI. Docs. #123-24.3 Rouse Frets remained counsel of record for the corporate
entities, filing numerous motions and briefs. However, on July 12, 2019, approximately
one month after the Court decided the parties’ summary judgment motions, Rouse Frets
filed a motion seeking to withdraw as counsel due to their clients’ failure to pay a
substantial amount of past due fees and expenses. Doc. #439. The Court expedited
briefing on the motion due to the imminent pretrial filing deadlines, pretrial conference,
and trial. Doc. #440. DuraSeal Pipe, DuraSeal Holdings, and HDI did not respond to
the motion.
On July 23, 2019, the Court granted Rouse Frets’s motion to withdraw. Doc.
#442. In its Order, the Court informed DuraSeal Pipe, DuraSeal Holdings, and HDI that
they were not permitted to represent themselves. Id. at 2-3 (citations omitted). They
were informed they “must secure legal representation before the pretrial conference is
held in this matter. If legal representation is not secured by the corporate defendants,
they may be subject to default judgment against them and in Plaintiff’s favor.” Id.
(citations omitted). In the same Order, the Court reminded DuraSeal Pipe, DuraSeal
Holdings, and HDI that pretrial filings were due beginning on August 14, 2019, the
pretrial conference was scheduled for September 11, 2019, and the trial would begin on
November 4, 2019. Id. at 3 (citing Docs. #432, 437). The Court also stated it would
“not alter or modify the scheduling order, and the pretrial conference and trial will not be
postponed and all current deadlines shall remain in place.” Id.
On August 20, 2019, the Court issued an Order reminding the parties of the
pretrial conference set for September 11, 2019. Doc. #471. On September 4, 2019, the
Court received a motion from Jose Di Mase, Giacomo Di Mase, DuraSeal Pipe,
DuraSeal Holdings, and HDI seeking leave to appear at the pretrial conference
telephonically or via video. Doc. #504. The motion was signed by Giacomo Di Mase on
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Spencer Fane was also granted leave to withdraw as counsel for Jose Di Mase and
Lee Kraus. Docs. #66.
3
Rouse Frets also entered appearances on behalf of Jose Di Mase, Giacomo Di Mase,
and Lee Kraus.
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behalf of himself and signed by Jose Di Mase on behalf of himself and on behalf of
DuraSeal Pipe, DuraSeal Holdings, and HDI. Id. at 2. The Di Mases, DuraSeal Pipe,
DuraSeal Holdings, and HDI were listed as “pro se” on the motion. Id.
On September 6, 2019, the Court issued its decision on the motion. Doc. #506.
The Court granted Jose Di Mase and Giacomo Di Mase’s request for leave to appear at
the pretrial conference telephonically. Id. at 2. But the Court denied DuraSeal Pipe,
DuraSeal Holdings, and HDI’s request to appear telephonically. Id. The Court informed
the Di Mases that because they were not attorneys, “[t]hey may NOT represent the
corporate entities or file documents on behalf of the corporate entities.” Id. at 2.
Regarding the pretrial conference, the Court reiterated its expectations and the
ramifications of the corporate entities’ decision not to secure counsel and participate:
To be clear, the corporate entities are not permitted to represent
themselves. And, if they are not represented by counsel, the corporate
entities may not attend or participate in the pretrial conference. Without
representation, no one is permitted to speak on behalf of the corporate
entities or carry out any order issued by the Court to the corporate entities.
If they fail to secure counsel to represent them at the pretrial conference,
the corporate entitles will be in violation of this Court’s Orders, which will
justify the Court entering a monetary judgment against them and in
Plaintiff’s favor.
Id. The Order was sent via the Court’s e-filing system to Jose Di Mase and Giacomo Di
Mase, emailed from the undersigned’s staff to Jose Di Mase and Giacomo DI Mase,
and mailed to the corporate entities.
To date, DuraSeal Pipe, DuraSeal Holdings, and HDI have not filed their exhibit
or witness lists (or any other pretrial filings). Docs. #174, 432. They have not engaged
with the other parties in the process of stipulating to facts, foundation of exhibits, and
admissibility of exhibits. On September 11, 2019, no attorney appeared at the pretrial
conference on behalf of the corporate entities. During the hearing, in which Jose Di
Mase (who signed on behalf of the corporate entities in the motion and who Rouse
Frets identified as the person to receive filings on behalf of the corporate entities)
participated, the Court stated it was inclined to enter default judgment against the
parties who did not appear at the pretrial hearing. To date, DuraSeal Pipe, DuraSeal
Holdings, and HDI remain unrepresented and have not filed anything since July 2019.

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II.

DISCUSSION

A. Counts I, II, and III
“When a party against whom a judgment for affirmative relief is sought has failed
to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the
clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). “Default judgment for failure
to defend is appropriate when the party’s conduct includes willful violations of court
rules, contumacious conduct, or intentional delays.” Ackra Direct Mktg. Corp. v.
Fingerhut Corp., 86 F.3d 852, 856 (8th Cir. 1996) (citation and internal quotations
omitted). Because DuraSeal Pipe and DuraSeal Holdings have failed to defend against
this lawsuit, and they have willfully violated the Court’s Orders, the Court finds the
circumstances constitute default and warrant entry of default as to liability on Counts I,
II, and III.
First, DuraSeal Pipe, DuraSeal Holdings, and HDI remain unrepresented. Once
their attorneys were granted leave to withdraw, each corporate entity was “technically in
default.” Ackra Direct Mktg. Corp., 86 F.3d at 857 (finding an unrepresented company
was “technically in default” once counsel withdrew); see also Blank v. Broadsword Grp.,
LLC, No. 14CV1550, 2017 WL 5132662, at *4 (E.D. Mo. Nov. 6, 2017) (finding an
unrepresented limited liability company in default for “being without counsel and for its
failure to appear at a long-set trial of the case”); Barth v. Patinan Tuatanto, LLC, No. 11950, 2012 WL 13029571, at *2 (D. Minn. Apr. 12, 2012) (entering default judgment
against an unrepresented corporate entity). DuraSeal Pipe, DuraSeal Holdings, and
HDI knew they could not represent themselves. Docs. #442, 471; see Rowland v. Ca.
Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201-02 (1993) (noting “it
has been the law for the better part of two centuries…that a corporation may appear in
federal courts only through licensed counsel.”); Carr Enters. v. United States, 698 F.2d
952, 953 (8th Cir. 1983) (citations omitted). Further, they were twice forewarned that if
they did not obtain counsel, the Court might enter and would be justified in entering a
judgment against them. Doc. #442, at 2-3; Doc. #506, at 2. Nearly two months have
passed since counsel was permitted to withdraw, but DuraSeal Pipe, DuraSeal
Holdings, and HDI remain unrepresented.
Second, although they were advised that pretrial filings were due beginning in
mid-August 2019, DuraSeal Pipe, DuraSeal Holdings, and HDI have not filed any
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pretrial filings, and have failed to collaborate with the other parties in preparing required
joint pretrial filings (i.e., stipulations of fact, foundation of exhibits, and admissibility of
exhibits). Their failure to follow this Court’s Orders is also grounds for entry of default.
See Comiskey v. JFTJ Corp., 989 F.2d 1007, 1009-10 (8th Cir. 1993) (affirming the
district court’s entry of default against a party that failed to comply with court orders and
discovery requests); Marriott Homes, Inc. v. Hanson, 50 F.R.D. 396, 400 (E.D. Mo.
1970) (entering default against the defendant because, among other things, he failed to
comply with the court’s orders, including the filing of witness and exhibits list). Because
the corporate entities did not file exhibit lists or witness lists, they have “made it
impossible to ascertain whether the allegations in [their] answer…have any factual
merit.” Marriott Homes, 50 F.R.D. at 400; Life Ins. Co. of N. Am. V. Eufracio, No. 13CV-3023-DEO, 2014 WL 6775559, at *2-3 (N.D. Iowa Dec. 2, 2014) (entering default
against the defendant because, among other things, he did not file his exhibit and
witness lists). Furthermore, by failing to abide by the Court’s scheduling and pretrial
orders, the corporate entities have violated the Federal Rules of Civil Procedure, which
allow this Court to sanction a party for failing “to obey a scheduling or other pretrial
order.” Fed. R. Civ. P. 16(f)(C).
Third, DuraSeal Pipe, DuraSeal Holdings, and HDI did not appear at the Court’s
pretrial conference. The Court forewarned these entities of the likely consequences –
i.e., entry of judgment against them – if they failed to appear at the pretrial conference.
Yet, DuraSeal Pipe, DuraSeal Holdings, and HDI chose not to attend, knowing full well
their failures to appear would likely result in default being entered against them. In
deliberately choosing not to attend the pretrial conference, DuraSeal Pipe, DuraSeal
Holdings, and HDI intentionally violated the Court’s Order directing them to participate in
the pretrial conference. See Ackra Direct Mktg. Corp., 86 F.3d at 856 (finding a
company’s failure to response to orders, comply with pretrial requirements, and attend
the pretrial hearing were grounds for default judgment); Wood Re New Franchise Corp.
v. Gibson, No. 06-CV-3312-GAF, 2008 WL 11338458, at *1 (W.D. Mo. June 17, 2008)
(citations omitted); Armagost v. United States, No. 07-CV-3240, 2010 WL 829178, at *12 (D. Neb. Mar. 4, 2010 (citations omitted). Their failure to appear at the pretrial
conference also violated the Federal Rules of Civil Procedure, which permits the Court

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to sanction a party who “fails to appear at a…pretrial conference.” Fed. R. Civ. P.
16(f)(1)(A).
DuraSeal Pipe’s, DuraSeal Holdings’s, and HDI’s continued and blatant
disregard and willful violations of this Court’s Orders merit entry of default against them.
See Ackra Direct Mktg. Corp., 86 F.3d at 856-57; PHI Fin. Servs., Inc. v. West, No. 17CV-245-RGE, 2018 WL 4275393, at *1 (S.D. Iowa Aug. 16, 2019) (entering default
against the defendant due to failure to comply with the court’s orders, failure to
participate in the preparation of the final pretrial order, and failure to appear at hearings,
including the final pretrial conference); Wood Re New Furniture Corp., 2008 WL
11338458, at *1 (entering default against defendants because they “failed to retain
counsel within the time specified,” “failed to show for the pretrial conference,” and
generally failed to participate in the matter).
For the foregoing reasons, the Court enters default against DuraSeal Pipe and
DuraSeal Holdings as to liability on Plaintiff’s breach of contract claims (Counts I, II, and
III). Because those claims are not for sums certain or sums that can be made certain by
computation, the Court holds in abeyance its entry of damages on these counts. At
trial, Plaintiff shall present evidence establishing damages resulting from the breaches.
B. Remaining Counts
Regarding the remaining claims brought against the corporate entities, the Court
will withhold entry of default against DuraSeal Pipe, DuraSeal Holdings, and HDI until
Plaintiff’s claims against the other Defendants are resolved. Plaintiff’s other claims are
not only brought against the corporate entities but also brought against other
Defendants who have not been found in default. Thus, the Court must await
adjudication of those claims. See Frow v. De la Vega, 82 U.S. 522, 524 (stating entry of
judgment against a defaulting party must await adjudication until liability is determined
regarding the party’s co-defendants in claims of fraud and conspiracy).
When there are multiple defendants who may be jointly and
severally liable for damages alleged by plaintiff, and some but less than all
of those defendants default, the better practice is for the district court to
stay its determination of damages against the defaulters until plaintiff's
claim against the nondefaulters is resolved. This is not because the
nondefaulters would be bound by the damage determination against the

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defaulters, but to avoid the problems of dealing with inconsistent damage
determinations against jointly and severally liable defendants.
Pfanenstiel Architects, Inc. v. Chouteau Petroleum Co., 978 F.2d 430, 433 (8th Cir.
1992) (citing In re Uranium Antitrust Litig., 617 F.2d 1248, 1261-62 (7th Cir. 1980)).
If the Court were to enter default against DuraSeal Pipe, DuraSeal Holdings, and
HDI on the remaining claims, inconsistent results may occur. That is, the Court would
have already found the corporate entities liable for the claims, but the jury could find the
other Defendants are not liable for the same claims. “To avoid such inconsistent
results, a judgment on the merits for the answering party should accrue to the benefit of
the defaulting party.” Angelo Iafrate Constr., LLC v. Potashnick Constr., Inc., 370 F.3d
715, 722 (8th Cir. 2004) (citations omitted).4
The Court must give the other Defendants the full opportunity to litigate the
claims against them. Further, the Court seeks to avoid inconsistent judgments. Thus,
the Court will not enter default at this time against DuraSeal Pipe, DuraSeal Holdings,
and HDI regarding the remaining claims brought against them. However, to be clear,
the Court expressly reserves the right to enter default and likely will enter default
against DuraSeal Pipe, DuraSeal Holdings, and HDI on the remaining claims.
III.

CONCLUSION

For the foregoing reasons, the Court directs the Clerk of the Court to enter
default against DuraSeal Pipe and DuraSeal Holdings as to liability on Counts I, II, and
III. The Court withholds entry of default as to damages for Counts I, II, and III, and
holds in abeyance its entry of default against DuraSeal Pipe, DuraSeal Holdings, and
HDI as to the remaining claims against them.
IT IS SO ORDERED.
/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT

DATE: September 16, 2019

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For Counts I, II, and III, inconsistent results are unlikely because those claims are
brought against DuraSeal Pipe and DuraSeal Holdings, and the claims are based solely
on DuraSeal Pipe’s and DuraSeal Holdings’s “independent wrongful acts.”
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