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Anderson v. Eastern Asset Services LLC

United States District Court, N.D. Texas, Dallas Division

May 16, 2019

GREG L. ANDERSON, Plaintiff,



         Before the Court is Plaintiff Greg L. Anderson's Motion for Default Judgment (Doc. 12), filed May 9, 2019. For the reasons discussed below, the Court GRANTS in part and DENIES in part Anderson's Motion.



         This is a Fair Debt Collection Practices Act (FDCPA) suit. On March 29, 2019, Anderson filed a complaint against Eastern Asset Services, LLC (EAS), alleging that EAS violated the FDCPA by informing a third party of Anderson's debt and falsely suggesting Anderson could be arrested for nonpayment of an outstanding debt owed to ACE Loan Company. Doc. 1, Compl., ¶¶ 9-10, 12-14. Specifically, Anderson alleges EAS called Anderson's son on March 11, 2019, to collect on behalf of ACE. Id. ¶ 12. During the call EAS's representative, Bethany, allegedly relayed information regarding Anderson's debt and included that EAS suspected fraud in connection with the debt. Id. ¶ 13. As instructed by Bethany, Anderson's son relayed the information to Anderson who then called Bethany. Id. ¶¶ 14-15. Bethany accused Anderson of fraud against ACE and stated that Anderson could go to jail unless he paid the debt. Id. ¶ 16. Anderson agreed to make a $65 payment towards the debt and to continue making these payments. Id. ¶¶ 17-18. Defendant then sent documents via the online platform DocuSign to attempt to make Anderson agree to $400 monthly payments to satisfy the debt. Id. ¶ 19.

         Anderson now sues under the FDCPA, alleging EAS and its representatives: (1) contacted and disclosed Anderson's debt to a third party, Anderson's son, on March 11, 2019, in violation of 15 U.S.C. § 1692b(2) and c(b); (2) harassed, oppressed, or abused Anderson by contacting a third party in order to put pressure on Anderson in violation of 15 U.S.C. § 1692d; and (3) falsely represented the legal status of the debt in violation of 15 U.S.C. § 1692e. Id. ¶¶ 27-34. Anderson alleges that he suffered a number of concrete harms:

including but not limited to: pecuniary loss stemming from Defendant's unlawful threats, emotional distress, false fear of being arrested, invasion of privacy, embarrassment stemming from having details of indebtedness disclosed to a third party, and undue anxiety.

Id. ¶ 21. Anderson alleges pecuniary damages and seeks a declaration that the aforementioned practices are unlawful and violate the governing body of law, actual damages under 15 U.S.C. § 1692k(a)(1), additional damages up to the statutory cap of $1, 000 under 15 U.S.C. § 1692k(a)(2)(A), costs and reasonable attorneys' fees under 15 U.S.C. § 1692k(a)(3), and any other relief the Court deems just. Id. at 6.

         On April 12, 2019, Anderson served EAS a copy of his complaint on Mark Zammet, who is alleged to be designated by law to accept service of process for EAS. Doc. 9, Return of Summons, 3. To date, EAS has neither answered nor otherwise made an appearance in this case. Consequently, Anderson requested the Clerk enter default against EAS on May 7, 2019 (Doc. 10), which the Clerk did that same day (Doc. 11). On May 9, 2019, Anderson moved the Court for a default judgment against EAS. Doc. 12, Mot. for Default J. EAS failed to respond to Anderson's Motion and the time to do so has passed. The Court now considers that Motion.



         Federal Rule of Civil Procedure 55 provides for the entry of default judgments in federal court. According to the Rule, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, . . . the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Once default has been entered, the court may enter a default judgment against the defaulting defendant upon motion of the plaintiff. Fed.R.Civ.P. 55(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. 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: (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. Houston 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, the Court is to assume that due to its default, 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. Ins. Co. of the W. v. H & G Contractors, Inc., at *4 (S.D. Tex. Oct. 5, 2011) (“A defendant's default concedes the truth of the allegations of the Complaint concerning the defendant's liability, but not damages.” (citing Jackson v. FIE Corp., 302 F.3d 515, 524-25 (5th Cir. 2002))). 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 ...

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