United States District Court, W.D. Louisiana, Shreveport Division
JLM SARTOR, INC.
CGN ENERGY LOUISIANA I, LLC
HORNSBY MAGISTRATE JUDGE.
MAURICE HICKS, JR., CHIEF JUDQE UNITED STATES DISTRICT COURT
the Court is a Motion to Set Aside Entry of Default filed by
Defendant, CGN Energy Louisiana I, LLC (“CGN”).
See Record Document 54. For the reasons which
follow, the Motion is GRANTED.
above-captioned proceeding was initiated when Plaintiff, JLM
Sartor, Inc.'s (“JLM”) filed its original
Petition (the “Petition”), in the First Judicial
District Court, Caddo Parish, Louisiana, under Docket No.
587, 223 to collect amounts allegedly due in connection with
oil and gas operations. See Record Document 1-6. On
October 2, 2015, through its counsel of record David Szwak
(“Szwak”), CGN removed the matter to this Court
based on diversity jurisdiction. See Record Document
1. On January 14, 2016, CGN filed a Motion to Dismiss.
See Record Document 28.
April 5, 2016, Szwak filed an unopposed motion to withdraw as
counsel, which was granted. See Record Documents 32
and 33. Magistrate Judge Hornsby (“Judge
Hornsby”) allowed CGN time to enroll new counsel and
extended the time, based in part on information from Carl
Nichols (“Nichols”), a principal with CGN, that
there was a potential for settlement. See Record
Documents 33 and 35. Judge Hornsby later granted a second
extension, again based on alleged settlement communications,
but stated that it would be the final extension. See
Record Document 36. Thereafter, on June 8, 2016, CGN obtained
Lee Ayres (“Ayres”) and Stacey Smith Melerine
(“Melerine”) as its new counsel. See
Record Document 38.
year later, on July 14, 2017, Judge Hornsby issued a Report
and Recommendation, recommending that CGN's Motion to
Dismiss be denied. See Record Document 39. This
Court adopted the Judge Hornsby's Report and
Recommendation on August 7, 2017. See Record
thereafter, on September 13, 2017, Ayres and Melerine filed
an Unopposed Motion to Withdraw as Counsel of Record for CGN,
which was granted by Judge Hornsby. See Record
Documents 45 and 46. Judge Hornsby gave CGN 30 days to enroll
new counsel and warned that as a limited liability company,
CGN cannot represent itself but must be represented by
licensed counsel. See Record Document 46 (citing
Southwest Express Co. v. Interstate Commerce
Commission, 670 F.2d 53, 55 (5th Cir. 1982)).
Furthermore, the Order warned that failure to enroll new
counsel by the deadline would result in the striking of
CGN's answer and entry of default against it. See
the deadline approaching, Nichols requested an extension of
the deadline and reported there were continuing efforts to
settle the case. Thus, Judge Hornsby extended the deadline to
enroll new counsel to November 17, 2017, but clearly warned
Nichols that this would be the final extension. See
Record Document 47. Further, Judge Hornsby warned that if CGN
did not move to enroll new counsel by the deadline, the court
would strike CGN's answer and direct the Clerk of Court
to enter a default against it. See id.
deadline approached, court staff received an email and some
phone calls from Nichols. See Record Document 48.
Nichols said that he hoped the case could be settled, but the
only indication of settlement talks is a letter from some
months earlier that made an initial offer. See id.
Nichols also complained about equipment that is allegedly
missing from a well site, but that issue would not slow the
procuration of an attorney. See id. He said that his
location outside Louisiana slowed his efforts to find counsel
for the CGN. See id.
Nichols had more than two months since his second set of
attorneys withdrew. Consequently, Judge Hornsby determined
that CGN has now had a reasonable time to enroll counsel, but
has failed to do so. See id. Because CGN could not
proceed pro se or represented by Nichols as the
principal and having been warned of the consequences, Judge
Hornsby imposed sanctions. See id.
not file an answer titled as such, but it did respond to the
original Petition with a Counterclaim and Third-Party Demand.
See Record Document 16. Because CGN failed to comply
with Judge Hornsby's previous orders to enroll counsel,
the court struck CGN's Counterclaim and Third-Party
Demand. See Record Document 48. Further, Judge
Hornsby directed the Clerk of Court to enter a default
against CGN with respect to Sartor's claims against CGN
asserted in Sartor's original Petition and amended
Complaint. See id. The Clerk of Court filed a Notice
of Entry of Default on November 28, 2017. See Record
Hornsby directed Sartor to file, no later than January 31,
2018, a Motion for Default Judgment that is supported by a
memorandum that explains the basis for judgment in its favor,
supporting affidavits or other evidence as may be necessary,
and a proposed judgment that would grant the relief Sartor
requests. See Record Document 48. On January 30,
2018 Sartor filed a Motion for Default Judgment along with
supporting affidavits and other evidence. See Record
Document 50. On February 12, 2018, CGN filed the present
Motion before the Court to set aside the default.
See Record Document 54.