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Bass v. Mike Rome Holdings, LLC

United States District Court, N.D. Alabama, Southern Division

October 30, 2014

RHONDA BASS, Plaintiff,
v.
MIKE ROME HOLDINGS, LLC, D/B/A MRH & ASSOCIATES, Defendant.

MEMORANDUM OPINION AND ORDER GRANTING JUDGMENT BY DEFAULT

VIRGINIA EMERSON HOPKINS, District Judge.

This is a civil action filed on October 30, 2013, by the plaintiff, Rhonda Bass, against the defendant, Mike Rome Holdings, LLC d/b/a MRH & Associates ("MRH"). (Doc. 1). The original complaint alleged that the defendant was liable for: violations of the Fair Debt Collection Practices Act, 15 U.S.C. ยง 1692, et seq. (Count One); the Alabama state law claim of invasion of privacy (Count Two); the Alabama state law claim of "negligent, wanton, and/or intentional hiring and supervision of incompetent debt collectors" (Count Three); and "wanton, malicious, and intentional conduct" (Count Four). The plaintiff also demanded a jury trial. (Doc. 1 at 16).

On February 3, 2014, the clerk of court entered the defendant's default in this case. (Doc. 13). The case is now before the court on the plaintiff's motion for entry of a default judgment. (Doc. 16). On August 15, 2014, the court ordered the defendant to show cause "no later than August 29, 2014, why a default judgment should not be entered against it." (Doc. 17 at 1). To date, the defendant has failed to respond.

On September 24, 2014, the court issued an order which, inter alia, stated:

The allegations of the complaint establish that the plaintiff "allegedly owes a debt on a car deficiency after a repossession, " and that the defendant is attempting to collect on that debt. However, except for a discussion of a November 9, 2012, letter sent to the plaintiff, the remainder of the complaint contains only generalized allegations which amount to nothing more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action, " which the Supreme Court has said "will not do." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557). Further, the complaint is shotgun in nature as it makes a number of allegations, without explaining which allegations support what counts. Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1295-96 (11th Cir. 2002) ("The typical shotgun complaint contains several counts, each one incorporating by reference the allegations of its predecessors, leading to a situation where most of the counts (i.e., all but the first) contain irrelevant factual allegations and legal conclusions."). For these reasons, the court holds that the complaint, as currently pled, fails to state a claim upon which relief may be granted.
The court DEFERS ruling on the motion for default judgment for 30 days, during which time the plaintiff may amend the complaint to more adequately set out facts which support her claims and explain which facts support what counts. Should the plaintiff not amend within the next 30 days, the court will attempt the difficult task of ruling on the motion using the complaint as currently pled.

(Doc. 18 at 4-5).

On October 23, 2014, the plaintiff filed an amended complaint which alleges only violations of the following sections of the Fair Debt Collections Practices Act:

- Section 1692c(a)(1) which prohibits communications "at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer" (Count One);
- Section 1692e which generally prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." (Count Two);
- Section 1692e(2)(A) which specifically prohibits "[t]he false representation of... the character, amount, or legal status of any debt" (Count Three);
- Section 1692e(4) which prohibits "[t]he representation or implication that nonpayment of any debt will result in... garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action[]" (Count Four);
- Section 1692e(5) which prohibits a debt collector from threatening "to take any action that cannot legally be taken or that is not intended to be taken" in an attempt to collect a debt (Count Five);
- Section 1692e(10) which prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer" (Count Six);
- Section 1692e(11) which requires that the defendant provide warnings and disclosures that it is a debt collector attempting to collect a debt (Count Seven);
- Section 1692f which prohibits a debt collector generally from using "unfair or unconscionable means to collect or attempt to collect any debt" (Count Eight); and
- Section 1692f(1) which prohibits specifically "[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law" (Count Nine).

The Amended Complaint drops the original Complaint's Alabama state law claims of invasion of privacy; "negligent, wanton, and/or intentional hiring and supervision of incompetent debt collectors;" and "wanton, malicious, and intentional conduct." Other than the federal claims listed above, the Amended Complaint contains no other claims.

The motion for default judgment is now ripe for review.

I. STANDARD

In 2007, Judge Steele in the Southern District of Alabama summarized the appropriate standard for these motions. His summary, which still accurately sets out the standard, is as follows:

In this Circuit, "there is a strong policy of determining cases on their merits and we therefore view defaults with disfavor." In re Worldwide Web Systems, Inc., 328 F.3d 1291, 1295 (11th Cir.2003); see also Varnes v. Local 91, Glass Bottle Blowers Ass'n of U.S. and Canada, 674 F.2d 1365, 1369 (11th Cir.1982) ("Since this case involves a default judgment there must be strict compliance with the legal prerequisites establishing the court's power to render the judgment."). Nonetheless, it is well established that a "district court has the authority to enter default judgment for failure... to comply with its orders or rules of procedure." Wahl v. McIver, 773 F.2d 1169, 1174 (11th Cir.1985).
Where, as here, a defendant has failed to appear or otherwise acknowledge the pendency of a lawsuit against her for nearly two months after being served, entry of default judgment may be appropriate. Indeed, Rule 55 itself provides for entry of default and default judgment where a defendant "has failed to plead or otherwise defend as provided by these rules." Rule 55(a), Fed.R.Civ.P. In a variety of contexts, courts have entered default judgments against defendants who have failed to defend the claims against them following proper service of process. See, e.g., In re Knight, 833 F.2d 1515, 1516 (11th Cir.1987) ("Where a party offers no good reason for the late filing of its answer, entry of default judgment against that party is appropriate."); Matter of Dierschke, 975 F.2d 181, 184 (5th Cir.1992) ("when the court finds an intentional failure of responsive pleadings there need be no other finding" to justify default judgment); Kidd v. Andrews, 340 F.Supp.2d 333, 338 (W.D.N.Y.2004) (entering default judgment against defendant who failed to answer or move against complaint for nearly three months); Viveros v. Nationwide Janitorial Ass'n, Inc., 200 F.R.D. 681, 684 (N.D.Ga.2000) (entering default judgment against counterclaim defendant who had failed to answer or otherwise respond to counterclaim within time provided by Rule 12(a)(2)). In short, then, "[w]hile modern courts do not favor default judgments, they are certainly appropriate when the adversary process has been halted because of an essentially unresponsive party." Flynn v. Angelucci Bros. & Sons, Inc., 448 F.Supp.2d 193, 195 (D.D.C.2006) (citation omitted).
The law is clear, however, that [the defendant's] failure to appear and the Clerk's subsequent entry of default against her do not automatically entitle [the plaintiff] to a default judgment. Indeed, a default is not "an absolute confession by the defendant of his liability and of the plaintiff's right to recover, " but is instead merely "an admission of the facts cited in the Complaint, which by themselves may or may not be sufficient to establish a defendant's liability." Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F.Supp.2d 1353, 1357 (S.D.Ga.2004); see also Descent v. Kolitsidas, 396 F.Supp.2d 1315, 1316 (M.D.Fla.2005) ("the defendants' default notwithstanding, the plaintiff is entitled to a default judgment only if the complaint states a claim for relief"); GMAC Commercial Mortg. Corp. v. Maitland Hotel Associates, Ltd., 218 F.Supp.2d 1355, 1359 (M.D.Fla.2002) (default judgment is appropriate only if court finds sufficient basis in pleadings for judgment to be entered, and that complaint states a claim). Stated differently, "a default judgment cannot stand on a complaint that fails to state a claim." Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1370 n. 41 (11th Cir.1997).

Atl. Recording Corp. v. Carter, 508 F.Supp.2d 1019, 1021-23 (S.D. Ala. 2007).

"The allegations must be well-pleaded in order to provide a sufficient basis for the judgment entered." De Lotta v. Dezenzo's Italian Rest., Inc., No. 6:08CV2033ORL22KRS, 2009 WL 4349806 at *2 (M.D. Fla. Nov. 24, 2009) (citing Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir.2009)). In making the determination as to whether the complaint is well pleaded, the court notes that the "plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (quotations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id. at 1965. Mere conclusory statements in support of a threadbare recital of the elements of a cause of action will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).

II. FINDINGS OF FACT

The following facts, which are alleged in the Amended Complaint, are ...


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