United States District Court, W.D. Texas, Midland/Odessa Division
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
COUNTS UNITED STATES DISTRICT JUDGE
THE COURT is Plaintiff United States of America's Motion
for Default Judgment and Supporting Brief. (Doc. 41).
Plaintiff seeks entry of a default judgment against
Defendants Rod Riordan, Inc. d/b/a E-Power (Rod Riordan,
Inc.); Rodney Riordan, Sr.; Rodney Riordan, Jr.; Kali
Riordan; and Yvonne Riordan due to their failure to answer or
otherwise respond to Plaintiff's Complaint. Id.
After due consideration, the Court GRANTS
Plaintiff's Motion for Default Judgment. (Doc. 54).
November 8, 2011, Rod Riordan, Inc. purchased the real
property located at 4701 E. County Road 45, Midland, Texas
79705 (Subject Property) from Shenandoah Bar M Ranch LLC,
more fully described as:
BEING a 20.00 acre tract out of Section 16, Block 38, T-1-S,
T. & P. RR. Co. Survey, Midland County, Texas, described
by metes and bounds as follows:
BEGINNING at a line created from a ½” iron rod
found for the SE corner of Section 9 and a 1” iron pipe
found for the NE corner of Section 21 from which the SE
corner of Section 9 bears N. 15° 29' 16” W. a
distance of 1906.46 feet;
THENCE S. 15° 35' 00” E. 776.48 feet along said
line to a ½” iron rod with cap set for the SE
corner of this tract;
THENCE S. 73° 56' 08” W. 1124.49 feet along the
centerline of a 15 foot dirt road to a ½” iron
rod with cap set for the SW corner of this tract;
THENCE N. 15° 07' 37” W. 776.54 feet along the
centerline of a 12 foot dirt road to a ½” iron
rod with cap set for the N.W. corner of this tract;
THENCE N. 73° 56' 08” E. 1119.60 feet to the
PLACE OF BEGINNING.
(Doc. 41 at 4-5).
on April 23, 2012, a delegate of the Secretary of the
Treasury assessed against, and gave notice and demand to, Rod
Riordan, Inc. for various unpaid federal employment taxes,
unemployment taxes, and a Civil Penalty resulting from
various tax periods. (Docs. 42-1-42-9). As a result of these
tax liabilities, the Internal Revenue Service (IRS) recorded
Notices of Federal Tax Lien against Rod Riordan, Inc. in the
real property records of Midland County, Texas on April 29,
2013, June 11, 2013, April 7, 2014, July 28, 2014, and March
16, 2015. (Docs. 42-10-42-15). Despite notice of and demand
for payment, Rod Riordan, Inc. failed to pay the federal tax
liabilities which, by May 30, 2018, will total $1, 154,
970.44. (Doc. 41 at 4).
April 11, 2017, Plaintiff filed this action against Rod
Riordan, Inc. as well as several parties Plaintiff believed
might claim an interest in the Subject Property: Rodney
Riordan, Sr., Rodney Riordan, Jr., Kali Riordan, Yvonne
Riordan, Shenandoah Bar M Ranch, R.O. Pomroy Equipment
Rental, Inc., d/b/a Roper Inc. (R.O. Pomroy), and the Midland
County Tax Assessor-Collector. (Doc. 1). In its Complaint,
Plaintiff seeks to: (1) reduce to judgment the outstanding
federal tax assessments against Rod Riordan, Inc.; (2)
foreclose the federal tax liens against the Subject Property;
and (3) sell the Subject Property and distribute the proceeds
from such sale in accordance with the Court's findings as
to the validity and priority of the liens and claims of all
Midland Central Appraisal District (MCAD) filed its Answer on
April 25, 2017.(Doc. 12). In its Answer, MCAD asserts-and
Plaintiff agrees-any ad valorem tax liens on the Subject
Property in favor of MCAD or its constituent taxing units are
superior to any lien of the United States, pursuant to 26
U.S.C. § 6323(b)(6). (Doc. 41 at 5).
26, 2017, R.O. Pomroy filed its Answer, explaining it
obtained a judgment against Rod Riordan, Jr., individually
and d/b/a E-Power, on May 19, 2014, and filed an abstract of
said judgment on May 30, 2014. (Doc. 28). However, R.O.
Pomroy admitted that, in regard to the Subject Property,
“its lien would be inferior to the liens claimed by the
Plaintiff, which were recorded prior to the filing of
Defendant's abstract of judgment.” Id. at
the IRS recorded its Notices of Federal Tax Lien on the
Subject Property and without conducting a title search,
Shenandoah Bar M Ranch purchased the Subject Property for
$300, 000. Id. at 5. On August 21, 2017, Plaintiff
and Shenandoah Bar M Ranch filed a Joint Stipulation with the
Court. (Doc. 35). In the Joint Stipulation, Shenandoah Bar M
Ranch agrees to settle its claim to the property in exchange
for a payment of $33, 654.81 from the proceeds of the sale of
the Subject Property as reimbursement for paid delinquent
property taxes. Id.
issued to each of the remaining Defendants were returned
executed on May 1, 2017. (Docs. 16-20). None of the
Defendants answered or otherwise appeared and Plaintiff filed
its Motion for Entry of Default Against Defendants Rod
Riordan, Inc., d/b/a E-Power; Rodney Riordan Sr.; Rodney
Riordan Jr.; Kali Riordan; and Yvonne Riordan on May 25,
2017. (Doc. 25). The Clerk entered default against the
Defendants the same day. (Doc. 27). On April 26, 2018,
Plaintiff filed the instant Motion for Default Judgment
against Defendants along with an Affidavit in Support, which
contains the Declaration of Revenue Officer B. Wesley Glass
and various documents supporting Plaintiff's claims.
(Docs. 41, 42). Plaintiff's Default Judgment against
Defendants is the final pending issue in this matter. (Doc.
41 at 2).
of the Federal Rules of Civil Procedure authorizes the Court
to enter a default judgment against a defendant who fails to
plead or otherwise defend upon motion of the plaintiff.
Fed.R.Civ.P. 55(b). “Default 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 & Savs. Ass'n, 874
F.2d 274, 276 (5th Cir. 1989). In addition, “[a] party
is not entitled to a default judgment as a matter of right,
even where the defendant is technically in default.”
Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996).
Rather, the district court “has the discretion to
decline to enter a default judgment.” Lindsey v.
Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).
developed a three-part test to determine when to enter a
default judgment. First, the court considers whether the
entry of default judgment is procedurally warranted.
Nasufi v. King Cable Inc., 2017 WL 6497762, * 1 (N.
D. Tex. 2017) (citing Lindsey v. Prive Corp., 161