United States District Court, W.D. Texas, Austin Division
PITMAN UNITED STATES DISTRICT JUDGE.
the Court is Plaintiffs Ana Verez Benegas and Yawan Kayali
Fernandez's (collectively, “Plaintiffs”)
Motion for Default Judgment. (Dkt. 5). Having considered
Plaintiffs' motion, the record, and the relevant law, the
Court finds that the motion should be granted.
allege the following facts in their complaint. (Dkt. 1). In
2013, Defendant Monica Byram (“Defendant”) and
Blake Byram (collectively, “the Byrams”)
contacted Plaintiffs seeking their investment in the
construction and sale of private aircraft hangers at Austin
Bergstrom International Airport. (Id. ¶ 8).
Relying on the Byrams' representations, Plaintiffs each
wire-transferred approximately $500, 000 to the Byrams.
(Id. ¶¶ 8-10). Plaintiffs and Defendant
subsequently became the three members of Jet Star Real Estate
Holdings, LLC (“the Company”) pursuant to an
agreement they each signed (the “Company
Agreement”). (Id. ¶ 11). Plaintiffs were
members of the company in name only, however, as Defendant
handled the company's day-to-day affairs and was listed
as its sole manager. (Id. ¶ 12).
private aircraft hangers were never built. (Id.
¶ 13). For years, Plaintiffs attempted to determine what
became of their investment, and they eventually requested
that Defendant return their funds to them. (Id.
¶ 14). Defendant did not do so and instead assured
Plaintiffs that the venture was moving forward. (Id.
¶¶ 14-15). After further delay, Plaintiffs sent the
Byrams a formal demand letter on June 12, 2017, demanding
repayment of their approximately $1 million investment.
(Id. ¶ 16). It became clear to Plaintiffs,
however, that the Byrams would not return the investment
money absent legal action, and so Plaintiffs brought an
arbitration action against Defendant. (Id. ¶
August 16, 2018, the arbitrator issued a final arbitration
award. (Id. ¶ 22). The arbitrator found that
Defendant had “repeatedly misled [Plaintiffs] about the
Company and its project” and had breached her fiduciary
duties to them. (Id.). The final award required
Defendant to pay Plaintiffs the amount of their investment,
legal and administrative fees and expenses, and post-judgment
interest. (Id.). The award also required that these
payments be made within 30 days of its transmittal.
(Id. ¶ 25). Defendant did not timely pay
Plaintiffs, and they subsequently filed this action for
confirmation of their arbitration award. (Id.).
answer to Plaintiffs' complaint was due on January 15,
2019. (Dkt. 2). Defendant did not submit an answer. On March
5, Plaintiffs moved for an entry of default against
Defendant, which the Clerk of the Court entered later that
day. (Dkt. 3). On March 6, Plaintiffs moved for default
judgment against Defendant. (Dkt. 5). Defendant has still not
appeared in this case; Plaintiffs' motion is unopposed.
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 Plaintiffs' motion, the Court must determine:
(1) whether default judgment is procedurally warranted, (2)
whether Plaintiffs' complaint sets forth facts sufficient
to establish that it is entitled to relief, and (3) what form
of relief, if any, Plaintiffs 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
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.
Lindsey factors weighs in favor of entering a
default judgment against Defendant. Because Defendant 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.”). Defendant's
failure to appear and respond has ground the adversary
process to a halt, prejudicing Plaintiffs' interest in
pursuing their 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: Defendant 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, and the harshness of a default
judgment in this case is mitigated by Defendant's failure
to respond to Plaintiffs' complaint or otherwise appear.
Finally, the Court is not aware of any facts that would
obligate it to set aside the default if challenged by
Defendant. The Court therefore finds that default judgment is
Sufficiency of ...