Holladay v. Sabella et al

Filing 35

MEMORANDUM OPINION AND ORDER: The Court DENIES Plaintiff's 30 Motion for Default Judgment and ORDERS that the 22 Clerk's Entry of Default against Defendants be set aside. (Ordered by Judge Jane J Boyle on 2/1/2016) (twd)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

JOYCE HOLLADAY,
Plaintiff,
v.
OTA TRAINING, LLC, OTA
SOLUTIONS, INC., and ROBERT P.
SABELLA, Individually,
Defendants.

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CIVIL ACTION NO. 3:14-CV-0519-B

MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff Joyce Holladay’s supplemented Motion for Default Judgment
(Doc. 30), filed on November 24, 2015. For the following reasons, the Court DENIES Plaintiff’s
Motion.
I.
BACKGROUND
The Court has previously recounted the facts of this case, and so it will only identify those
facts relevant to this Order. See Doc. 29, Mem. Op. & Order 1–2. This is a Fair Labor Standards Act
case in which Plaintiff alleges that Defendants failed to pay her the overtime pay to which she was
entitled. Doc. 1, Compl. ¶¶ 13–14. After obtaining an entry of default against Defendants, Plaintiff
moved for default judgment. Doc. 24, Mot. for Default J. The Court denied this motion without
prejudice because Plaintiff did not include sufficient evidence to show the dates of her employment
or the work she performed for Defendants. Doc. 29, Mem. Op. & Order 5–7. Plaintiff was allowed
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an opportunity to supplement her motion with further evidence, which she has now done. Doc. 30,
Resp. to Judge’s Order and Supplementation of Record. On December 22, 2015, Defendants filed
an answer and counterclaim against Plaintiff. Doc. 32, Answer. The Court will now review the
supplemented motion for default judgment.
II.
LEGAL STANDARD
Rule 55 of the Federal Rules of Civil Procedure authorizes the Court to enter a default
judgment against a defendant who has failed to plead or otherwise defend upon motion of the
plaintiff. Fed. R. Civ. P. 55(a)–(b). That being said, “[d]efault judgments are a drastic remedy, not
favored by the Federal Rules and resorted to by courts only in extreme situations.” Sun Bank of Ocala
v. Pelican Homestead & Sav. Ass’n, 874 F.2d 274, 276 (5th Cir. 1989). A party is not entitled to a
default judgment merely because the defendant is technically in default. Ganther v. Ingle, 75 F.3d
207, 212 (5th Cir. 1996). “Rather, a default judgment is generally committed to the discretion of the
district court.” United States v. 1998 Freightliner Vin #: 1FUYCZYB3WP886986, 548 F. Supp. 2d 381,
384 (W.D. Tex. 2008) (citing Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977)).
In determining whether a default judgment should be entered against a defendant, courts
have developed a three-part analysis.1 See, e.g., 1998 Freightliner Vin #: 1FUYCZYB3WP886986, 548
F. Supp. 2d at 384. First, courts consider whether the entry of default judgment is procedurally
warranted. See Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). The factors relevant to this
inquiry include:

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To obtain a default judgment in cases involving servicemembers, the plaintiff must also certify that
the defendant is not serving in the military. 50 App. U.S.C. § 521(b)(1).

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[1] whether material issues of fact exist; [2] whether there has been substantial
prejudice; [3] whether the grounds for default are clearly established; [4 ]whether the
default was caused by a good faith mistake or excusable neglect; [5] the harshness of
a default judgment; and [6] whether the court would think itself obliged to set aside
the default on the defendant’s motion.
Id.
Second, courts assess the substantive merits of the plaintiff’s claims and determine whether
there is a sufficient basis in the pleadings for the judgment. See Nishimatsu Constr. Co., Ltd. v. Hous.
Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (noting that “default is not treated as an absolute
confession by the defendant of his liability and of the plaintiff’s right to recover”). In doing so, courts
are to assume that due to its default, a defendant admits all well-pleaded facts in the plaintiff’s
complaint. Id. However, “defendant is not held to admit facts that are not-well pleaded or to admit
conclusions of law.” Id.
Third, courts determine what form of relief, if any, the plaintiff should receive. See, e.g., 1998
Freightliner Vin #: 1FUYCZYB3WP886986, 548 F. Supp. 2d at 384. Normally, damages are not to
be awarded without a hearing or a demonstration by detailed affidavits establishing the necessary
facts. See United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979). However, if the amount
of damages can be determined with mathematical calculation by reference to the pleadings and
supporting documents, a hearing is unnecessary. James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993).
III.
ANALYSIS
A.

Whether Default Judgment is Appropriate
After reviewing Plaintiff’s Motion in light of the six Lindsey factors, the Court determines that

default judgment is not procedurally warranted. “[A] district court has the discretion to decline to
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enter a default judgment,” and here the relevant factors weigh against such a “disfavored” result.
Lindsay, 161 F.3d at 893. First, Defendants have filed an answer, in which they dispute facts material
to the outcome of the case. Second, it is not clear how their delay in answering has prejudiced
Plaintiff, who admits that she has “not personally expended any sums for costs or fees associated with
this action.” Doc. 30, Resp. to Judge’s Order 1. Third, although the grounds for default were clearly
established, Defendants have now answered. Fourth, Defendants’ delay in answering was the result
of their belief that the withdrawal of Plaintiff’s counsel, with whom they had been negotiating,
mooted the matter. Doc. 34, Defs.’ Resp. ¶¶ 5–6. Fifth, the Court believes that a default judgment
at this point would be unduly harsh. The majority of the factors thus weigh against granting a default
judgment. Therefore, the Court concludes that default judgment is not procedurally warranted.
IV.
CONCLUSION
Based on the foregoing, the Court DENIES Plaintiff’s Motion for Default Judgment and
ORDERS that the Clerk’s Entry of Default against Defendants be set aside.

SO ORDERED.
SIGNED: February 1, 2016.

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JANE J. BOYLE
UNITED STATES DISTRICT JUDGE

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