Scruggs v. Anderson
Filing
50
MEMORANDUM OPINION AND ORDER denying as moot Plaintiffs' 44 Motion for Entry of Default Judgment; granting Plaintiffs' 47 Motion for Entry of Default Against Wayne Anderson; VACATING the Court's 40 Order granting plaintiffs' 37 Motion for Default Judgment; directing the Clerk to enter default against Wayne Anderson, American Energy Holdings,LLC, Wilon Resources, Inc., E2 Investments, LLC, US Natural Gas Corp. WV, and US Natural Gas Corp.; further directing the Plaintiffs to take the appropriate steps to effect a default judgment as more fully set forth herein. Signed by Judge Robert C. Chambers on 12/2/2016. (cc: Wayne Anderson; counsel of record; any unrepresented parties) (jsa)
IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
WALLACE L. SCRUGGS, JR. and
RENEE SCRUGGS,
Plaintiffs,
v.
CIVIL ACTION NO. 3:13-30435
WAYNE ANDERSON, individually
and as successor in interest to
American Energy Holdings, LLC,
Wilon Resources, Inc. and E2
Investments, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the Court are Plaintiffs’ Motion for Entry of Default Judgment, ECF No.
44, and Motion for Entry of Default, ECF No. 47. Plaintiffs Motion for Default Judgment was
procedurally inappropriate as it preceded an entry of default. Default must be entered, however,
before a default judgment can be rendered in favor of the moving party. See FED. R. CIV. P. 55.
Accordingly, Plaintiffs’ Motion for Entry of Default Judgment is DENIED as moot. ECF No. 44.
Plaintiffs’ Motion for Entry of Default is procedurally proper and meritorious. An entry of
default is appropriate where a defendant has “failed to plead or otherwise defend.” FED. R. CIV. P.
55(a). Where a defendant fails to indicate an intent to “otherwise defend” the action, even if he or
she has answered the complaint and participated in some of the litigation, default may be entered
against the defendant.1 Home Port Rentals, Inc. v. Ruben, 957 F.2d 126, 133 (4th Cir. 1992)
1
The Court notes that not all circuits endorse this interpretation of Rule 55. Notably the
Fifth and the Eleventh Circuits have held that where a defendant has answered the complaint the
(finding entry of default based on Rule 55 proper where after defendants answered, defendants
failed to participate in or defend the action); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65
(2d Cir. 1981) (finding obstructionist litigation tactics, failing to appear for a deposition, giving
vague and unresponsive answers to interrogatories, and failing to appear for trial supported a
finding that the defendant failed to “otherwise defend”). “[T]he district court’s power to maintain
an orderly docket justifies the entry of default against a party who fails to . . . meet . . . required
time schedules.” City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 130 (2d Cir. 2011)
(quoting Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 918 (3d Cir. 1992)).
Defendant Wayne Anderson initially appeared and participated albeit fitfully in this
litigation. But beginning in early May 2016, Anderson continually failed to respond to Plaintiffs’
motions, failed to appear as ordered at conferences and hearings, and failed to comply with Court
orders requiring an explanation for his failures to appear and respond to motions even when
informed that default may result from continued silence. Anderson has unequivocally indicated
that he no longer wishes to participate in this litigation. Accordingly, an entry of default by the
Clerk is warranted because Anderson has not otherwise defended this action.
Lastly, the Court VACATES its Order entering default judgment against the corporate
defendants. ECF No. 40. The Order was improvidently granted because an entry of default was
not first entered against the corporate defendants. Nonetheless, the basis for an entry of default
against the corporate defendants was present then and is still present now. The corporate
defendants failed to retain counsel. A corporate defendant may not represent itself. Rowland v.
defendant cannot be said to have failed to “otherwise defend” and default cannot be entered based
on Rule 55. See Bass v. Hoagland, 172 F.2d 205, 210 (5th Cir. 1949), cert denied, 338 U.S. 816
(1949); Solaroll Shade & Shutter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1134 (11th Cir.
1986).
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Cal. Men’s Colony, 506 U.S. 194, 202 (1993). Without counsel a corporate defendant may be
found in default even if it appears in the action. See Am. Metals Serv. Exp. Co. v. Ahrens Aircraft,
Inc., 666 F.2d 718, 720 n.2 (1st Cir. 1981); Grace v. Bank Leumi Trust Co. of New York, 443 F.3d
180, 192 (2d Cir. 2006); 10 MOORE’S FEDERAL PRACTICE, § 55.11 (3d ed. 2009). Accordingly, an
entry of default by the Clerk is warranted against the corporate defendants as they have failed to
retain counsel.
Plaintiffs’ Motion for Entry of Default Judgment is DENIED as moot. ECF No. 44.
Plaintiffs’ Motion for Entry of Default Against Wayne Anderson is GRANTED. ECF No. 47. The
Court’s Order granting plaintiff’s motion for default judgment is VACATED. ECF No. 40. The
Court DIRECTS the Clerk to enter default against Wayne Anderson, American Energy Holdings,
LLC, Wilon Resources, Inc., E2 Investments, LLC, US Natural Gas Corp. WV, and US Natural
Gas Corp.
Plaintiffs are DIRECTED take the appropriate steps to effect a default judgment, including
providing the specific bases for the damages sought from each defaulted defendant. If the amount
of damages sought is not a sum certain, plaintiffs will need to request a hearing to establish the
damages due to plaintiffs.
The docket lists only one address for Anderson. The Court has no other means to contact
him and thus the Court DIRECTS the Clerk to send this Order to Anderson at the address listed
on the docket. The Court also DIRECTS the Clerk to send a copy of this Order to counsel of
record and any unrepresented parties.
ENTER:
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December 2, 2016
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