UNITED STATES OF AMERICA v. Donalson et al

Filing 47

ORDER DENYING 39 MOTION for Default Judgment against Tejano Insurance Agency, Truck Insurance Exchange, 38 MOTION for Default Judgment against Texas Workforce Commission (Signed by Judge Gray H. Miller) Parties notified.(rkonieczny, 4)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
UNITED STATES OF AMERICA ,
Plaintiffs,
v.
ALTON EARL DONALSON , et al.,
Defendants.

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CIVIL ACTION H-13-00153

O RDER
Pending before the court are the United States of America’s motions for default judgment
(Dkt. 38, 39) against defendants Texas Workforce Commission (“TWC”), Tejano Insurance Agency
(“TIA”), and Texas Insurance Exchange (“TIE”). In addition to a judgment of default, plaintiff seeks
an order against defendants that the interest of the United States is superior to any interest of the
defendants in Alton Earl Donalson’s “Bellaire Property” at 5919-5921 Bellaire Blvd., Houston,
Texas, and his “Twin Hills Property” at 7199 Twin Hills Drive, Houston, Texas. After reviewing
the motion, the pleadings, other filings in this case, and the applicable law, the court determines that
this motion should be denied.
Pursuant to Federal Rule of Civil Procedure 55, entry of default and default judgment are
appropriate “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 . . . .” FED . R. CIV . P.
55(a). Even if a defendant is technically in default, however, a plaintiff is not entitled to a default
judgment as a matter of right. Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001). In order to grant
default, the court must assess the merits of plaintiff’s claims and find sufficient basis in the pleadings
for the judgment. Nishimatsu Constr. Co., Ltd. v. Hous. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir.

1975). By defaulting, a defendant “admits the plaintiff’s well-pleaded allegations of fact . . . and is
barred from contesting on appeal the facts thus established.” Id. Additionally, under Rule 5.5 of the
Local Rules of the Southern District of Texas, a motion for default judgment must be served upon
the defendant via certified mail, return receipt requested. S.D. TEX . L.R. 5.5.
The United States of America has served each of the defendants with process in this case.
Dkts. 10; 12; 13. And, none of these parties has plead or otherwise defended the suit. However,
because technical default does not alone warrant a default judgment, the court must consider the
merits of plaintiff’s request.
The court finds a sufficient basis for the judgment and order as to the TWC. The TWC has
stipulated in writing that the United States’ interest in the Bellaire Property and Twin Hills Property
is superior to any interest TWC holds. Dkt. 38-1.
The court does not find a sufficient basis in the pleadings for the judgment and an order as
to TIA regarding either property. The pleadings do not allege any facts as to TIA, but say the
following about Tejano Insurance & Services: “[a]ny interest of the United States for its federal tax
liens are superior to any interest of the Lessees in the Bellaire Property.” Plaintiff served TIA, and
submits its pending motion as to TIA, not Tejano Insurance & Services. Plaintiff has not provided
any information on which the court can consider TIA and Tejano Insurance & Services to be the
same entity. Plaintiff has not provided a sufficient basis for the court to grant its motion for default
judgment and order as to TIA.
The court also does not find a sufficient basis in the pleadings for an order as to TIE
regarding either property. The pleadings only state that “[t]he judgment [held by TIE], and its
abstract, may reflect a superior interest, in whole or in part, to the interests of the United States in
the Bellaire Property.” This admission, created by TIE’s default, does not create a sufficient basis

to order that the United States’ interest in either property is superior to TIE’s. The admission only
states that TIE’s interest in the Bellaire Property may actually be superior to the United States’.
Plaintiff has not provided a sufficient basis for the court to grant its motion for default judgment and
order as to TIE.
Despite the varying success on the merits that each motion may have had, they all fail to
demonstrate the service demanded by Local Rule 5.5.
For the foregoing reasons, the plaintiff's motions for default judgment (Dkts. 38, 39) are
DENIED without prejudice.

It is so ORDERED.
Signed at Houston, Texas on December 10, 2014.

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Gray H. Miller
United States District Judge