C/A No.: 3:19-3578-CMC-SVH
REPORT AND RECOMMENDATION
Jeffery Wells ("Plaintiff") filed this action against One Way Logistics, LLC ("OWL") and LaJuanza Laverte Dargins ("Dargins") (collectively "Defendants") asserting a claim of negligence related to an accident occurring on or about August 16, 2017, allegedly caused by Dargins, an employee of OWL. [See ECF No. 7]. This matter is before the court on Plaintiff's motion for default judgment against OWL. [ECF No. 38].
Pursuant to 28 U.S.C. § 636(b) and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.), this case was referred to the undersigned for all pretrial proceedings. This matter comes before the court on Plaintiff's motion for entry of default. For the reasons that follow, the undersigned recommends the district judge deny as premature Plaintiff's motion. I. Procedural Background
Plaintiff filed his complaint on December 27, 2019, and amended complaint on January 9, 2017. [ECF No. 1]. Dargins, proceeding pro se, filed an answer to the amended complaint on August 13, 2020, informing the court that "any liability in this matter should lie with One Way Logistics, LLC, and not with [Dargins] individually." [ECF No. 27 at 1-2].
Dargins also informed the court that he is currently incarcerated in Florida, serving a sentence on an unrelated matter. [ECF No. 27 at 1-2].
On November 12, 2020, the court issued an order directing Plaintiff to advise the court whether this matter has been resolved and, if not, how Plaintiff plans to proceed, noting that OWL had failed to file an answer to Plaintiff's amended complaint and the time to do so had elapsed. [ECF No. 33]. The court further directed as follows:
It appears effecting service against OWL has been a difficult process, and OWL appears to be closed. [See, e.g., ECF No. 18-1 at 1, ECF No. 34-1].
If OWL is in default, Plaintiff should advise the court whether the matter is ripe for resolution as to OWL and what is necessary for resolution of the relevant claims. If the matter is ripe for resolution, Plaintiff is directed to address: (1) the damages sought (categories and amounts); (2) the standards by which the damages should be measured; (3) whether the matter may be resolved on the written submissions (and, if so, attaching supporting evidence); (4) if a hearing may be necessary, the witnesses and evidence which will be presented and estimated hearing time; and (5) whether a jury demand has been made (in which event a jury trial as to unliquidated damages may be required). If a hearing or trial may be required, Plaintiff should address whether the hearing/trial as to OWL should be deferred to allow for a single, consolidated hearing/trial, to include defendant LaJuanza Laverte Dargins.[ECF No. 33 at 1 n.1].
Plaintiff then requested defaulted be entered against OWL, which the clerk entered on November 17, 2020, but Plaintiff provided the court with no further information. [ECF Nos. 35, 36]. The court then directed Plaintiff to address the information requested in the court's November 12, 2020 order. [ECF No. 36]. In response, Plaintiff informed the court that the matter was still pending as to both Defendants and that the damages sought are unliquidated and need to be determined through an evidentiary hearing. [ECF No. 37]. Plaintiff additionally stated that the matter was ripe for resolution as to OWL, but provided no further information on this issue. Id. Plaintiff simultaneously filed a motion for default judgment as to OWL, stating in full as follows:
Pursuant Rule 55(b)(2), Plaintiff hereby requests this court to set the amount of damages owed by Defendant One Way Logistics, LLC (OWL) to Plaintiff. OWL is in default. See ECF 34, ECF 34-1 (Nov. 16, 2020). Plaintiff's Amended Complaint demands a jury trial and seeks actual damages as well as punitive damages against OWL. See ECF 7. Plaintiff requests a hearing to present testimony from Plaintiff along with medical records and bills. Plaintiff estimates thirty (30) minutes will be needed for the hearing. This hearing as to OWL does not need to be deferred to include Defendant Dargins as OWL employed Dargins, Dargins was working for OWL at the time of the collision, and thus OWL is liable for the conduct of Dargins. See ECF 27 (Dargin's Answer). As such, Plaintiff's motion for a default judgment hearing before the court and solely against OWL should be granted.[ECF No. 38]. II. Discussion
Fed. R. Civ. P. 55(a) provides that the Clerk of Court must make an entry of default "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise." Plaintiff's counsel has filed an affidavit stating that more than 21 days have elapsed since the date of service of the amended complaint and amended summons on OWL and OWL has not filed an answer or notice of appearance. [ECF No. 34-1]. Further, a review of the docket reveals that OWL has failed to file an answer or otherwise appear in this case. Accordingly, an entry of default pursuant to Fed. R. Civ. P. 55(a) is appropriate.
However, in light of the fact that Dargins has answered and his liability has not yet been resolved, the determination of whether default judgment is proper as to OWL must be made in light of Frow v. De La Vega, 82 U.S. 552 (1872) and Fed. R. Civ. P. 54(b).
In Frow, the plaintiff alleged that fourteen defendants conspired to defraud him. After initially entering default judgment against the non-appearing defendants, the trial court subsequently found in favor of the remaining defendants that no fraud had occurred. The Supreme Court found the result to be "unseemly and absurd." Id. at 554. The Supreme Court reversed the result, noting:
[t]he true mode of proceeding where a bill makes a joint charge against several defendants, and one of them makes default, is simply to enter a default and a formal decree pro confesso against him, and proceed with the cause upon the answers of the other defendants. The defaulting defendant has merely lost his standing in court. He will not be entitled to service of notices in the cause, nor to appear in it in any way. He can adduce no evidence, he cannot be heard at the final hearing. But if the suit should be decided against the complainant on the merits, the bill will be dismissed as to all the defendants alike—the defaulter as well as the others. If it be decided in the complainant's favor, he will then be entitled to a final decree against all. But a final decree on the merits against the defaulting defendant alone, pending the continuance of the cause, would be incongruous and illegal.Id.
Fed. R. Civ. P. 54(b) provides that
When an action presents more than one claim for relief—whether as a claim, counterclaim, crossclaim, or third-party claim—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. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.Id.
Frow's vitality has been questioned since the adoption of Rule 54(b). However, "although many jurisdictions have construed Frow to bar entry of default judgment against one of several defendants only if the theory of recovery is one for true joint and several liability, the Fourth Circuit has interpreted Frow more broadly." Jefferson v. Briner, Inc., 461 F.Supp.2d 430, 434-35, n. 6 (E.D. Va. 2006); see also Monterey Bay Homes, LLC v. Chambers, C/A No. 4:12-891-RBH, 2012 WL 12902724, at *1 (D.S.C. Oct. 22, 2012) ("The Fourth Circuit has interpreted Frow broadly in discussing the procedure established for multiple defendants in Fed. R. Civ. P. 54(b)."). In United States ex rel. Hudson v. Peerless Ins. Co., 374 F.2d 942 (4th Cir. 1962), one defendant answered while another did not. Id. at 943. The district court entered default judgment against the non-responding party. Id. In holding the default judgment against the non-responding party to be premature, the Fourth Circuit held as follows:
Although Frow was a case of joint liability, we think the procedure established for multiple defendants by Rule 54(b) is strikingly similar and applicable not only to situations of joint liability but to those where the liability is joint and/or several.Id. at 944. The Hudson court also noted that Frow applies even when co-defendants are alleged to be "closely interrelated." Id. at 945.
As noted by the district court for the Eastern District of Virginia,
if Frow still stands for anything, it explicates a cautionary warning to the courts: logically inconsistent judgments resulting from an answering defendant's success on the merits and another defendant's suffering of a default judgment are to be avoided. Thus, the avoidance of logically inconsistent judgments in the same action and factually meritless default judgments provide "just reason for delay" within the meaning of Rule 54(b).Jefferson, 461 F.Supp.2d at 434 (citing Phoenix Renovation Corp. v. Gulf Coast Software, Inc., 197 F.R.D. 580, 582 (E.D. Va. 2000)); see also, e.g., Joe Hand Promotions, Inc. v. Sheedy, C/A No. 4:08-1797-TLW-TER, 2010 WL 3724754, at *3 (D.S.C. May 13, 2010) (finding "just reason" to delay an entry of default judgment against the defaulting defendant because the other defendant had yet to litigate the merits of causes of action raised against both defendants), report and recommendation adopted, C/A No. 4:08-1797-TLW-TER, 2010 WL 3724670 (D.S.C. Sept. 16, 2010); MAG Mut. Ins. Co. v. Brown, C/A No. 6:14-353, 2015 WL 13648556, at *8 (D.S.C. July 24, 2015) ("The United States Supreme Court has long held that when a default of a defendant in a multi-defendant case can lead to inconsistent rulings by the court, the court should not enter judgment against the defaulting defendant.").
Here, there is "just reason" to delay an entry of default judgment against OWL. Plaintiff brings one cause of action against Defendants, alleging that OWL "by and through the act and/or omission of . . . Dargins, was negligent, reckless, willful and wanton" and that "Defendant Dargins was negligent, careless, reckless, grossly negligence, willful and wanton," seeking "judgment against Defendants for actual damages and for punitive damages." [See ECF No. 7]. Plaintiff does not distinguish between OWL and Dargins regarding their liability as to Plaintiff's claim for negligence. Accordingly, the proper path on which to proceed with regard to OWL is to await a final ruling on the merits as to Dargins before entering any judgment against OWL. As a result of OWL's failure to appear, the entry of default by the Clerk of Court is proper, and OWL is deemed to have admitted all well-pleaded allegations of fact in the complaint. See Nishimatsu Construction Co. v. Houston National Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (citing Ohio Central Railroad Company v. Central Trust Company of New York, 133 U.S. 83 (1889); Thomson v. Wooster, 114 U.S. 104 (1884)). III. Conclusion and Recommendation
As stated above, Plaintiff, in his last filing with the court, has represented that "OWL is liable for the conduct of Dargins." [See ECF No. 38]. To the extent that Plaintiff no longer is pursuing a claim against Dargins, Plaintiff may move to dismiss Dargins from this action pursuant to Fed. R. Civ. P. 41. --------
For the foregoing reasons, the undersigned recommends the district judge deny as premature Plaintiff's motion for entry of default judgment. [ECF No. 38].
IT IS SO RECOMMENDED. February 1, 2021
Columbia, South Carolina
Shiva V. Hodges
United States Magistrate Judge
The parties are directed to note the important information in the attached
"Notice of Right to File Objections to Report and Recommendation."
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
901 Richland Street
Columbia, South Carolina 29201
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).