United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
Lindsay, United States District Judge
the court is Plaintiff GFRS Equipment Leasing Fund II,
LLC's (“Plaintiff” or “GFRS”)
Motion for Default Judgment Against Defendants Trang Nguyen,
Sherman Trinity Spa, LLC (Doc. 18), filed November 29, 2018.
After careful consideration of the motion, memorandum of law,
record, and applicable law, the court grants in part
and denies in part Plaintiff's Motion for
Default Judgment Against Defendants Trang Nguyen, Sherman
Trinity Spa, LLC.
August 24, 2018, GFRS filed this action against Defendants
Diane Trang Nguyen (“Nguyen”), Nguyencat Doan Vo
(“Vo”), Thanh Tran (“Tran”), Hoa Minh
(“Pham”), Sherman Trinity Spa, LLC
(“Sherman Spa”), The Trinity Spa, LLC
(“Trinity Spa”), and T.T. Spa Plus (“T.T.
Spa Plus”) (collectively, “Defendants”). On
April 25, 2019, GFRS filed the First Amended Complaint
(“Amended Complaint”) to correct Pham's name;
the Amended Complaint is otherwise substantively identical to
the Original Complaint (“Original Complaint”).
The Amended Complaint asserts claims against Nguyen for
breach of the Sherman Trinity lease agreements and its
accompanying guaranty agreement, and breach of the Tiffany
Nails lease agreement (counts 1, 2, and 3); a claim against
Nguyen and Vo for breach of the guaranty agreement
accompanying the Tiffany Nails lease agreement (count 4);
claims against Nguyen, Vo, Tran, T.T. Spa Plus, and Trinity
Spa for fraud, unlawful misappropriation of funds under the
Texas Theft Liability Act, and a civil RICO violation based
on the predicate offense of wire fraud (claims 5, 6, and 9);
and claims against all Defendants for unjust enrichment,
civil conspiracy, and RICO conspiracy (claims 7, 8, and 10).
respect to the remaining Defendants, the Amended Complaint
alleges that GFRS is a company that leases equipment to
business entities. In this case, it leased nail salon
equipment to Defendants pursuant to several lease agreements,
which were accompanied by guaranty agreements. Pl.'s Am.
Compl., Doc. 31 ¶¶ 11, 13. Nguyen allegedly
represented to GFRS that she was acting as a broker on behalf
of the lessees and personal and corporate guarantors of the
leases. Id. ¶ 43. Nguyen requested that GFRS
purchase the nail salon equipment from a vendor, T.T. Spa
Plus. Id. ¶ 44. On or about December 7, 2017,
GFRS alleges that it initiated a wire transfer to T.T. Spa
Plus in the amount of $680, 500 to purchase the requested
equipment. Id. ¶ 45. The lessees were expected
to directly receive the equipment from T.T. Spa Plus by
delivery to the locations set forth in the leases.
Id. ¶¶ 46-47.
subsequently defaulted on all the leases. Id. ¶
48. GFRS contends that it sent the lessees, the guarantors,
and Nguyen a notice of default and demand letter on March 23,
2018. Id. One of the listed guarantors who
purportedly signed the leases was an individual named Thy
Mong Hoang (“Hoang”). In response to the notice
of default and demand letter, GFRS received a letter from
attorney Jonathan Keeler, indicating that he represented
Hoang and informing GFRS that Hoang had been the subject of
identity theft with respect to the leases. Id.
¶ 49. The letter stated that Hoang did not sign the
leases, and any signature purporting to be Hoang was,
therefore, fraudulent. Id. Hoang subsequently
executed a sworn affidavit stating she was not familiar with
GFRS and did not execute any of the documents in connection
with the leases. Id. ¶ 50.
alleges that Nguyen forged Hoang's signature on the
leases and other accompanying documents. Id. ¶
51. GFRS alleges that Nguyen and Codefendant Vo fraudulently
entered into the leases with the intent of causing GFRS to
tender a payment of $680, 500 to T.T. Spa Plus for the
equipment that Defendants requested. Id. ¶ 52.
GFRS alleges that, after it tendered the payment, either of
two scenarios occurred: (1) Nguyen and Vo canceled the
equipment order and directed T.T. Spa Plus to issue a refund
payment to them, or (2) Nguyen and Vo instructed T.T. Spa
Plus to not place GFRS's equipment order and transfer to
them GFRS's tendered payment. Id. ¶¶
alleges that, on December 8, 2017-the day after it wired the
payment to T.T. Spa Plus-T.T. Spa Plus issued four
cashier's checks made payable to Vo, each in the amount
of $50, 000. Id. ¶ 56. On that same day, T.T.
Spa Plus also allegedly made a wire transfer to Trinity Spa
in the amount of $200, 000 and a second wire transfer to
Sherman Trinity Spa in the amount of $270, 000. Id.
¶ 58. GFRS alleges that T.T. Spa Plus retained the
remaining funds as compensation for its participation in the
scheme, as well as for use as a “deposit” for
future orders of equipment. Id. ¶¶ 59-60.
GFRS alleges that Vo, using the funds transferred to him by
T.T. Spa, paid Nguyen approximately $102, 000 using the money
he received from T.T. Spa Plus as compensation for her
participation in the scheme. Id. ¶ 61.
GFRS filed the Original Complaint on August 24, 2018, and the
Amended Complaint on April 25, 2019, Defendants Nguyen,
Trinity Spa, and Sherman Trinity Spa have not filed an answer
or otherwise responded in this action. On October 24, 2018,
GFRS requested that the clerk enter default as to Nguyen,
Sherman Trinity Spa, and Trinity Spa, which the clerk
subsequently did. On November 29, 2018, GFRS filed the Motion
for Default Judgment against these Defendants. The Motion for
Default Judgment does not seek relief against Defendants Vo
is entitled to entry of a default by the clerk of the court
if the opposing party fails to plead or otherwise defend as
required by law. Fed.R.Civ.P. 55(a). Under Rule 55(a), a
default must be entered before the court may enter a default
judgment. Id.; New York Life Ins. Co. v.
Brown, 84 F.3d 137, 141 (5th Cir. 1996). The clerk of
court has entered a default against Defendants Nguyen,
Trinity Spa, and Sherman Trinity Spa, and GFRS now requests
the court to enter a final default judgment as to all claims
asserted against them in the Amended Complaint.
date, Defendants Nguyen, Trinity Spa, and Sherman Trinity Spa
have not responded to or otherwise defended against
GFRS's claims in this lawsuit. By failing to answer or
otherwise respond to Defendant's counterclaims,
Defendants Nguyen, Trinity Spa, and Sherman Spa have admitted
the well-pleaded allegations of the counterclaims asserted in
the Amended Complaint and are precluded from contesting the
established facts on appeal. Nishimatsu Constr. Co. v.
Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir.
1975). Stated differently, a “defendant is not held to
admit facts that are not well-pleaded or to admit conclusions
of law.” Wooten v. McDonald Transit Assocs.,
Inc., 788 F.3d 490, 496 (5th Cir. 2015) (citation
omitted). Accordingly, Defendants may not contest the
“sufficiency of the evidence” on appeal but
“[are] entitled to contest the sufficiency of the
complaint and its allegations to support the judgment.”
action “presents more than one claim for relief . . .
or when multiple parties are involved, the court may direct
entry of a final judgment as to one or more, but fewer than
all, claims or parties only if the court expressly determines
that there is no just reason for delay.” Fed.R.Civ.P.
54(b). When, however, one of multiple defendants has
defaulted, “judgment should generally not be entered
against the defaulting defendant until the matter has been
adjudicated as to all defendants, ” especially in
situations where several defendants are alleged to be jointly
liable. Underwriters at Lloyds, Syndicate 4242 v. Turtle
Creek Partnership, Ltd., No. 4:14-CV-702, 2010 WL
5583118, at *2 (S.D. Tex. Feb. 26, 2019) (citing Frow v.
De La Vega, 82 U.S. 552, 553 (1872)); Great Am.
Assur. Co. v. Wills, No. SA-10-CV-353-XR, 2010 WL
4007330, at *1 (W.D. Tex. Oct. 12, 2010). This court has
previously declined to enter default judgment against a
defendant who was alleged to have conspired with codefendants
against whom claims remained pending. Beta Health
Alliance MD PA v. Mukuro & Assocs. Law Firm, No.
3:09-CV-1401-L, 2010 WL 1685847, at *2 (N.D. Tex. Apr. 26,
2010). The court noted that, “While there is no Fifth
Circuit authority precisely on point, other courts have held
that entering default judgment and awarding damages on
conspiracy claims while the alleged coconspirators'
claims remain is error.” Id. The court applied
the approach used by other courts that “a court may
enter default as to liability, but . . . it should not enter
judgment as to damages to prevent inconsistent
damages.” Id. (citations omitted).
with respect to the claims alleged against Defendants in this
action for civil conspiracy and RICO conspiracy, the court
will defer entering judgment as to damages on these claims
until the claims against Vo and Pham are resolved. The court
will likewise defer entering judgment as to damages for
breach of the guaranty agreement accompanying the Tiffany
Nails lease agreement because the claim is asserted against
both Nguyen and Vo, and Vo is not a defendant against whom
GFRS moves for default judgment. The court will also defer
entering judgment as to damages for fraud, unlawful
misappropriation of funds under the Texas Theft Liability
Act, and RICO conspiracy, as these claims are asserted
against all Defendants named in this matter, and GFRS seeks
joint and several liability with respect to these ...