Frost & Miller, LLP v. Heaven's Way Investment Trust

Background

Frost & Miller, LLP filed affidavits showing service on Henderson & Jones Limited, Ann Fox, Femi Omomo, SubGallagher Investment Trust, Heaven’s Way Investment Trust, and Aaron Cain McKnight. The plaintiff had proposed seeking default judgments against Henderson & Jones Limited, SubGallagher Investment Trust, Heaven’s Way Investment Trust, and McKnight. It initially said it did not intend to seek default judgment against Fox and Omomo because their purported claims against the plaintiff had been purchased by Henderson & Jones. The district judge later directed the plaintiff either to seek default judgment against Fox and Omomo or dismiss them, stating that the case would not be resolved without a judgment as to all defendants. The plaintiff then informed the court that counsel for Henderson & Jones had been in contact with its counsel and that settlement discussions involving Henderson & Jones, Fox, and Omomo were possible.

Court’s authority

The case was referred to Magistrate Judge Barbara Moses for general pretrial management, including scheduling, discovery, hearings, non-dispositive motions, settlement, and reports and recommendations on dispositive motions. Because the defendants facing default judgments had not unanimously consented to Magistrate Judge Moses’s jurisdiction, she stated that she would address the default motions by report and recommendation rather than by final decision under the parties’ consent jurisdiction.

Order regarding default motions

The court directed the plaintiff to file a single motion for default judgment against all defendants for whom it sought that relief. The deadline was extended to March 15, 2022. The court also scheduled a conference for April 14, 2022, at 10:00 a.m.

The motion could be submitted as a proposed order requiring the defendants to show cause, but it had to include a memorandum of law stating the exact damages or other monetary relief sought from each defendant and the precise terms of any requested non-monetary relief. It also had to include admissible evidence supporting the claimed damages.

Required showing

The court identified several requirements:

- Jurisdiction: Before entering a default judgment, the court must be satisfied that it has personal jurisdiction over each defendant and subject-matter jurisdiction over the action. The court warned that inadequate proof of service could result in denial of the request as to a particular defendant. - Liability: Even after a defendant defaults, the plaintiff must show that the complaint’s well-pleaded allegations, taken as true, establish liability on each cause of action for which judgment is sought. - Damages: The plaintiff had to provide admissible evidence allowing the court to determine the damages amount with reasonable certainty. The court could decide damages from written submissions or schedule an evidentiary hearing. A request for a hearing had to identify the proposed witnesses and describe their evidence. - Attorney fees: Any fee request had to include authenticated, contemporaneous time records identifying the date, hours, hourly rate when applicable, and work performed for each timekeeper. The plaintiff also had to provide evidence of the attorneys’ backgrounds and qualifications and document costs and expenses. - Service: Unless the motion was submitted as a proposed order to show cause, the plaintiff had to mail the motion papers and a copy of the order to each defendant facing default judgment at the defendant’s last known address and file proof of mailing.

Disposition

This order did not grant or deny any default judgment. It extended the filing deadline, required a single consolidated default motion, scheduled a conference, and established the information and evidence that the plaintiff would need to submit. It also set several general procedures for requests to adjourn or extend deadlines, page limits for letters and letter-motions, notice to additional parties or attorneys, and remote depositions.