United States District Court, W.D. Texas, Austin Division
PITMAN UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff Can Capital Asset Servicing,
Inc.'s (“Can Capital”) Motion for Default
Judgment. (Dkt. 12). Having considered Can Capital's
motion, the record, and the relevant law, the Court finds
that the motion should be granted.
Capital alleges the following facts in its complaint. (Dkt.
1). In 2013, WebBank, Inc. loaned $150, 000.00 to Defendant
Central Park Imaging Center, Ltd. (“Central Park
Imaging”). (Id. ¶ 8). Central Park
Imaging's President, William Alfred Walker
(“Walker”), personally guaranteed the loan.
(Id. ¶ 12; Loan Agreement, Dkt. 12-2, at 1). In
doing so, Walker “unconditionally guarant[eed] . . .
the prompt payment to [WebBank and its assigns] of all
amounts owed by [Central Park Imaging].” (Loan
Agreement, Dkt. 12-2, at 11). WebBank assigned the loan to
Can Capital a week after executing the agreement. (Compl.,
Dkt. 1, ¶ 9). Central Park Imaging made on-time payments
for over two years, but stopped in December 2015, leaving an
outstanding balance of $79, 395.91. (Id.
¶¶ 13, 15). Can Capital filed this action against
Central Park Imaging, seeking damages for their breach of the
loan agreement. (Id. at 4-6).
Capital served both defendants on December 19, 2017,
(see Dkt. 5), but neither has appeared. It has since
executed a settlement agreement with Central Park Imaging.
(See Dkt. 8). Meanwhile, the Clerk of the Court
entered default against Walker on January 10, 2019, (Dkt.
11), and Can Capital now moves for default judgment against
him. (Dkt. 12). Walker has not appeared; Can Capital's
motion is unopposed.
LEGAL STANDARD AND DISCUSSION
Rule 55 of the Federal Rules of Civil Procedure, federal
courts have the authority to enter a default judgment against
a defendant that has failed to plead or otherwise defend
itself. Fed.R.Civ.P. 55(a)-(b). That 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 simply because
the defendant is 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.
Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977).
considering Can Capital's motion, the Court must
determine: (1) whether default judgment is procedurally
warranted, (2) whether the Can Capital's complaint sets
forth facts sufficient to establish that it is entitled to
relief, and (3) what form of relief, if any, Can Capital
should receive. United States v. 1998 Freightliner Vin #:
1FUYCZYB3WP886986, 548 F.Supp.2d 381, 384 (W.D. Tex.
2008); see also J & J Sports Prods., Inc. v. Morelia
Mexican Rest., Inc., 126 F.Supp.3d 809, 813 (N.D. Tex.
2015) (using the same framework).
determine whether entry of a default judgment is procedurally
warranted, district courts in the Fifth Circuit consider six
factors: “ whether material issues of fact are at
issue,  whether there has been substantial prejudice, 
whether the grounds for default are clearly established, 
whether the default was caused by a good faith mistake or
excusable neglect,  the harshness of a default judgment,
and  whether the court would think itself obliged to set
aside the default on the defendant's motion.”
Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir.
balance, the Lindsey factors weigh in favor of
entering a default judgment against Walker. Because Walker
has not filed a responsive pleading, there are no material
facts in dispute. See Nishimatsu Const. Co., Ltd. v.
Hous. Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)
(“The defendant, by his default, admits the
plaintiff's well-pleaded allegations of fact.”).
Walker's failure to appear and respond has ground the
adversary process to a halt, prejudicing Can Capital's
interest in pursuing its claim for relief. See J & J
Sports, 126 F.Supp.3d at 814 (“Defendants'
failure to respond threatens to bring the adversary process
to a halt, effectively prejudicing Plaintiff's
interests.”) (citation and quotation marks omitted).
The grounds for default are established: Walker was properly
served and has failed to appear and participate at all, much
less timely file a responsive pleading. There is no
indication that the default was caused by a good faith
mistake or excusable neglect. Although a default judgment in
this case is not insignificant-Can Capital seeks over $100,
000 in damages and attorney's fees-the Court is not aware
of any facts that would obligate it to set aside the default
if challenged by Walker. The Court therefore finds that
default judgment is procedurally warranted.
Sufficiency of Can Capital's Complaint
judgment is proper only if the well-pleaded factual
allegations in Can Capital's complaint establish a valid
cause of action. Nishimatsu Constr. Co., 515 F.2d at
1206. By defaulting, a defendant “admits the
plaintiff's well-pleaded allegations of fact.”
Id. In determining whether factual allegations are
sufficient to support a default judgment, the Fifth Circuit
employs the same analysis used to determine sufficiency under
Rule 8. Wooten v. McDonald Transit Assocs., Inc.,
788 F.3d 490, 498 (5th Cir. 2015). A complaint must contain
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2). The factual allegations in the complaint need only
“be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations
in the complaint are true (even if doubtful in fact).”
Wooten, 788 F.3d at 498 (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). While
“detailed factual allegations” are not required,
the pleading must present “more than an unadorned,
Id. (quoting Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009)).
Capital asserts against Walker a claim for breach of
contract. (Compl., Dkt. 1, at 4-5). In Texas, the elements of
a breach-of-contract claim are: “(1) formation of a
valid contract; (2) performance by the plaintiff; (3) breach
by the defendant; and (4) the plaintiff sustained damages as
a result of the breach.” USAA Tex. Lloyds Co. v.
Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018). Can
Capital alleges as follows. Walker executed a personal
guaranty for “the prompt payment to [Can Capital] of
all amounts owed” by Central Park Imaging. (Compl.,
Dkt. 1, ¶ 12). Can Capital performed its obligations by
loaning Central Park Imaging the agreed-upon amount of money.
(Id. ¶ 8). Walker breached his personal
guaranty by refusing to make payments owed by Central Park
Imaging after the company stopped making the payments owed
under the loan agreement. (Id. ¶ 23). Can
Capital has been damaged by failing to receive the unpaid
sum. (Id. ¶ 15). Can Capital has supported
these allegations with an affidavit from its associate
general counsel, a copy of the loan agreement ...