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Easterling v. U.S. Bank N.A.

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

August 9, 2019

KEN EASTERLING, Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION, et al., Defendants.

          FINDINGS, CONCLUSIONS AND RECOMMENDATION

          IRMA CARRILLO RAMIREZ UNITED STATES MAGISTRATE JUDGE [1]

         Before the Court is the plaintiff's Notice of Motion and Motion for Default Judgment for Second Failure of Defendant to Timely Answer Plaintiff's Motions, filed August 5, 2019 (doc. 41). Based on the relevant filings and applicable law, the plaintiff's motion for default judgment should be DENIED.

         I. BACKGROUND

         Ken Easterling (Plaintiff) sued U.S. National Bank Association (Defendant) in Texas state court on August 24, 2018, alleging debt collection violations in connection with his mortgage. (See doc. 1-1 at 2-14.)[2] Defendant removed the case to federal court on September 24, 2018. (See doc. 1 at 1.) According to the notice of removal, Defendant did not file an answer in state court prior to removal. (See doc. 1-4 at 3.) Defendant did not file an answer or otherwise respond to the state petition within any of the time frames provided by Fed.R.Civ.P. 81(c)(2).

         Plaintiff filed an amended complaint on October 26, 2018, and additional attachments on October 29, 2018. (See docs. 5, 6.) Defendant again failed to file an answer or otherwise respond to the amended complaint. Because of Defendant's failure to answer or respond to either complaint, on January 7, 2019, Plaintiff was ordered to show cause in writing by January 21, 2019, why he had not requested entry of default and moved for a default judgment against Defendant, unless it filed an answer or response prior to that date. (See doc. 7.)

         On January 11, 2019, Plaintiff requested entry of default and default judgment, and on January 14, 2019, the Clerk entered default against Defendant. (See docs. 8, 9.) On January 15, 2019, Defendant moved to strike the entry of default as premature. (See doc. 11.) It explained that based on an order aggregating this case and a prior related lawsuit by Plaintiff before the same magistrate judge, it believed that the court had consolidated the two cases, and it did not file an answer because it had a motion to dismiss pending in the prior lawsuit. (See id. at 1-2.) Defendant filed its answer to Plaintiff's amended complaint on January 16, 2019. (See doc. 13.) On January 16, 2019, it was recommended that the motion to strike be construed as a motion to set aside the entry of default and granted, and that Plaintiff's motion for default judgment be denied. (See doc. 14.)

         On January 22, 2019, Plaintiff again moved for entry of default and for default judgment. (See doc. 16.) The Clerk declined to enter default because a responsive pleading had been filed, and it was recommended on January 24, 2019, that the motion for default judgment be denied. (See doc. 17.) The recommendations that the entry of default be set aside and that the motions for default judgment be denied were adopted on January 31, 2019, and February 8, 2019. (See docs. 21, 24.)

         On April 22, 2019, Defendant moved for summary judgment. (See doc. 25.) After obtaining an extension of time to respond but missing it, Plaintiff ultimately filed his objection to the summary judgment motion on June 21, 2019. (See docs. 29, 30, 36.) On July 3, 2019, he again requested entry of default against Defendant, and the Clerk again declined. (See doc. 37.) Plaintiff now seeks entry of default judgment based on Defendant's failure to respond to his objection. (See doc. 41 at 4.)

         II. MOTION FOR DEFAULT JUDGMENT

         Rule 55 allows a default judgment to be entered against a party and provides the applicable procedure. See Fed. R. Civ. P. 55. There is a three-step process for securing a default judgment. See New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). First, a default occurs when a party “has failed to plead or otherwise defend” against an action. Fed.R.Civ.P. 55(a). Next, an entry of default must be entered by the clerk when the default is shown “by affidavit or otherwise.” See id.; New York Life Ins. Co., 84 F.3d at 141. Third, a party may apply to the clerk or the court for a default judgment after an entry of default. Fed.R.Civ.P. 55(b); New York Life Ins. Co., 84 F.3d at 141.

         “Default judgments are a drastic remedy, not favored by the Federal Rules and resorted to by courts only in extreme situations.” Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (citation and internal quotation marks omitted). Moreover, “a party is not entitled to a default judgment as a matter of right, even where the defendant is technically in default.” Id. (quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996) (per curiam)). Courts may consider “the amount of money at stake, the possibility of a dispute concerning material facts, and the strong policy favoring decisions on the merits.” Stelax Indus., Ltd., 2004 WL 733844, at *11 (N.D. Tex. Mar. 25, 2004) (citation omitted). The decision to enter a judgment by default is discretionary. Id.

         Defendant has defended the case by filing a motion to set aside the default, which has been granted, as well as an answer. It has also now moved for summary judgment. Plaintiff therefore cannot satisfy the first requirement for a default judgment, e.g., failure “to plead or otherwise defend.” Fed.R.Civ.P. 55(a); New York Life Ins. Co., 84 F.3d at 141. Nor can he satisfy the second requirement because the Clerk of Court has declined to re-enter default based on the filing of a responsive pleading. Without a prior entry of default, a party has no basis to seek a default judgment. Moreover, “a party is not entitled to a default judgment as a matter of right, even where the defendant is technically in default.” Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996)). “In fact, ‘[d]efault judgments are a drastic remedy, not favored by the Federal Rules and resorted to by courts only in extreme situations.'” Lewis, 236 F.3d at 767 (quoting Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n , 874 F.2d 274, 276 (5th Cir. 1989). Finally, the failure to respond to Plaintiff s objection to Defendant's summary judgment motion is also not a basis for entry of default judgment. Like his first two motions, his third motion for default judgment is subject to denial.

         III. ...


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