United States District Court, E.D. Louisiana
ORDER AND REASONS
S. VANCE UNITED STATES DISTRICT JUDGE.
RSDC Holdings, LLC moves the Court to enter a default
judgment declaring the mortgages originally granted in favor
of defendant debis Financial Services, Inc. and defendant
Ganis Credit Corporation against the vessel Tuna
Taxi are satisfied. For the following reasons, the Court
GRANTS plaintiff's motion.
6, 2016, plaintiff filed this action for declaratory judgment
under 28 U.S.C. § 2201. Plaintiff seeks a declaration
that plaintiff is the rightful owner of the Tuna
Taxi and that the ship mortgages in favor of defendants
debis Financial Services, Inc. and Ganis Credit Corporation
are satisfied. Defendant debis Financial Services, Inc.
was served August 3, 2016. Plaintiff asked this Court for
permission to serve defendants Ron Steinberg and Ganis Credit
Corporation via publication,  and the Court granted
plaintiff's motion. On December 5, plaintiff filed an
affidavit of publication, signed by Sandra Campos, the
principal clerk of the Orange County Register, attesting that
the Court's order was published in the Register once a
week for six weeks. No defendant has filed any response to the
summons and complaint, nor did any defendant request
additional time to respond.
sought an entry of default as to debis Financial Services on
September 29, 2016,  and the clerk entered default against
debis Financial Services on the following day. On December
5, 2016, plaintiff sought an entry of default against
Steinberg and Ganis Credit Corporation,  and the clerk
entered default against them on December 9,
2016. Plaintiff now seeks a default judgment.
Federal Rule of Civil Procedure 55(b), the Court may enter a
default judgment against a party when it fails to plead or
otherwise respond to the plaintiff's complaint within the
required time period. Fed.R.Civ.P. 55(b). A plaintiff who
seeks a default judgment against an unresponsive defendant
must proceed through two steps. First, the plaintiff must
petition the court for the entry of default, which is simply
“a notation of the party's default on the
clerk's record of the case.” Dow Chem. Pac.
Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 335 (2d Cir.
1986); see also United States v. Hansen, 795 F.2d
35, 37 (7th Cir. 1986) (describing the entry of default as
“an intermediate, ministerial, nonjudicial, virtually
meaningless docket entry”). Before the clerk may enter
the default, the plaintiff must show “by affidavit or
otherwise” that the defendant “has failed to
plead or otherwise defend.” Fed.R.Civ.P. 55(a). Beyond
that requirement, however, the entry of default is largely
the defendant's default has been entered, the plaintiff
may request the entry of judgment on the default. In that
context, the court deems the plaintiff's well-pleaded
factual allegations admitted. See Nishimatsu Const. Co.,
Ltd. v. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir.
1975). At the same time, the court does not hold the
defaulting defendant “to [have] admit[ed] facts that
are not well-pleaded or to [have] admit[ed] conclusions of
law.” Id. The default judgment should not be
entered unless the judgment is “supported by
well-pleaded allegations and . . . ha[s] a sufficient basis
in the pleadings.” Wooten v. McDonald Transit
Associates, Inc., 788 F.3d 490, 498 (5th Cir.
2015) (internal quotation marks omitted) (citing Houston
Nat. Bank, 515 F.2d at 1206).
plaintiff's claim is for a sum certain and the defendant
has not made an appearance in court, the clerk may enter a
default judgment. Fed.R.Civ.P. 55(b)(1). In all other cases,
“the party must apply to the court for a default
judgment.” Fed.R.Civ.P. 55(b)(2). No party is entitled
to a default judgment as a matter of right. Lewis v.
Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (per curiam)
(quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th
Cir. 1996)). The disposition of a motion for the entry of
default judgment ultimately rests within the sound discretion
of the district court. Mason v. Lister, 562 F.2d
343, 345 (5th Cir. 1977).
entering judgment, a district court must “look into its
jurisdiction both over the subject matter and the
parties.” System Pipe & Supply, Inc. v. M/V
Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001)
(quoting Williams v. Life Sav. & Loan, 802 F.2d
1200, 1203 (10th Cir.1986)) (quotation marks removed).
Judgment entered in the absence of jurisdiction is void, and
the Court must therefore refrain from entering judgment if
its jurisdiction is uncertain.
case, subject matter jurisdiction is founded upon diversity
of citizenship. See 28 U.S.C. § 1332. RSDC is a
Louisiana LLC and its sole member, Donald Joe Calloway, is a
Louisiana citizen. Defendant Steinberg is a citizen of
California; defendant debis Financial Services is a Delaware
corporation; defendant Ganis Credit is a California
corporation; and the amount in controversy exceeds
$75, 000. Service of process on debis Financial
Services appears to have been properly executed under the
Federal Rules of Civil Procedure. The Court therefore finds
that it has jurisdiction to enter this default judgment.
Procedural Requirements for Default Judgment
record shows that all defendants were served with process,
but have failed to plead or otherwise defend against
plaintiff's claims. Indeed, the defendants have made no
appearance at all. Although judgments by default are
generally disfavored, see Lindsey v. Prive Corp.,
161 F.3d 886, 893 (5th Cir. 1998), the Court finds that the
defendants' failure to appear has made it impossible to
achieve a “just, speedy, and inexpensive
disposition” of this case on the merits. Sun Bank
of Ocala v. Pelican Homestead and Sav. Ass'n, 874
F.2d 274, 276 (5th Cir. 1989). The record does not reveal any
excuse for defendants' failure to appear. Accordingly,
the Court finds that the requirements for a default judgment
have been met.
established that the procedural requirements for default
judgment have been satisfied, the Court must also evaluate
whether declaratory relief is appropriate in this case.
See, e.g., Clarendon America Ins. Co. v. CM
General Contractors, Inc., No. 07-2037, 2009 WL 136028,
*2-3 (W.D. La. Jan. 20, 2009) (evaluating whether to grant
declaratory relief independently of the procedural
requirements for default judgment); Mayflower Transit,
LLC v. Troutt, 332 F.Supp.2d 971, 975-76 (W.D. Tex.
2004) (same). “When considering a declaratory judgment
action, a district court must engage in a three-step
inquiry.” Orix Credit Alliance, Inc. v. Wolfe,
212 F.3d 891, 895 (5th Cir. 2000). First, the court must
determine whether the declaratory action is justiciable. Or,
in other words, whether an “actual controversy”
exists between the parties to the action. Id.
Second, if the court has jurisdiction, it must determine
whether it has the “authority” to grant
declaratory relief. Id. Finally, the court must
determine whether to exercise its discretion to decide or
dismiss the declaratory action. Id. The Court
address each of these three steps in turn.
declaratory judgment action is ripe for adjudication only
where an ‘actual controversy' exists.”
Id. at 896. Generally, “an actual controversy
exists where ‘a substantial controversy of sufficient
immediacy and reality exists between parties having adverse
legal interests.'” Id. (quoting Middle
South Energy, Inc. v. City of New Orleans, 800 F.2d 488,
490 (5th Cir. 1986)). Whether the facts are sufficiently
immediate to establish an actual controversy is a
case-by-case inquiry. Id.
result of defendants default, defendants have admitted that
RSDC Holdings' allegations in its complaint are true.
See Nishimatsu, 515 F.2d at 1206 (“The
defendant, by his default, admits the plaintiff's
well-pleaded allegations of fact, is concluded on those facts
by the judgment, and is barred from contesting on appeal the
facts thus established.”). The factual allegations
establish that RSDC Holdings is currently in possession of
the Tuna Taxi, and seeks to sell the
vessel. But in order for the vessel to be
merchantable, RSDC Holdings must determine the status of two
mortgages associated with the Tuna Taxi and
establish that RSDC Holdings is the rightful owner of the
vessel. Plaintiff's allegations and the documents
attached to plaintiff's complaint indicate the ...