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United States v. Calvin

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

October 17, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
LEILA L. CALVIN, Defendant.

          MEMORANDUM OPINION

          VIRGINIA EMERSON HOPKINS UNITED STATES DISTRICT JUDGE

         I. Introduction

         This is a tax liability case against Defendant Leila L. Calvin (“Ms. Calvin”). Pending before the Court is Plaintiff's Motion for Default Judgment by the Clerk of Court (doc. 8) (the “Motion”) filed on September 21, 2017. Although Plaintiff has asked the Clerk of the Court to enter a default judgment against Ms. Calvin pursuant to Rule 55(b)(1), the Court treats the Motion as one seeking relief pursuant to Rule 55(b)(2) instead.[1]

         A memorandum of law (doc. 8 at 2-8); the declaration of Cynthia S. Fields (doc. 8-1), a revenue officer with the Internal Revenue Service “with a post of duty in Huntsville, Alabama” (doc. 8-1 at 1 ¶ 2), including the attachments (docs. 8-2, 8- 3); and the declaration of attorney Bruce T. Russell (doc. 4-1), including the attachment (doc. 4-2) are offered in support of the Motion. The Motion is due to be granted.

         II. Default Judgment Standard

         “When 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, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). An entry of a default under Rule 55(a) is a prerequisite to obtaining a judgment by default under Rule 55(b). Rule 55(b) authorizes the Clerk (in sum certain situations) or the Court to enter a default judgment. Here, the Court, and not the Clerk, acts pursuant to Rule 55(b)(2).

         Generally, the entry of a default judgment is committed to the discretion of the district judge. Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977).[2] The factual allegations of a well-pleaded complaint are taken as true; hence, the Court must decide if these accepted facts state a cause of action for which relief can be granted. Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1370 n.41 (11th Cir. 1987); Nishimatsu Const. Co., Ltd. v. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (“There must be a sufficient basis in the pleadings for the judgment entered.”) (footnote omitted); Descent v. Kolitsidas, 396 F.Supp.2d 1315, 1316 (M.D. Fla. 2005) (same). When the amount of damages due is uncertain, an evidentiary hearing is often required to determine the sum the defaulting defendant must pay. S.E.C. v.Smyth, 420 F.3d 1225, 1231-32 (11th Cir. 2005). On the other hand, if a specific sum is sought, a hearing may not be necessary.

         Thus, the legal effect of Ms. Calvin's default is that the facts averred by Plaintiff in the complaint are deemed admitted, but liability is not. As explained by Judge William H. Steele of the United States District Court for the Southern District of Alabama regarding default judgments:

The law is clear, however, that Lacey's failure to appear and the Clerk's subsequent entry of default against her do not automatically entitle plaintiffs 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. 19[8]7). Virgin Records America, Inc. v. Lacey, 510 F.Supp.2d 588, 591-92 (S.D. Ala. 2007) (emphasis and alterations added).

         III. Findings of Fact and Conclusions of Law

         Pursuant to Rule 55(b)(2), the Court makes the following findings of fact and conclusions of law:

         1. Plaintiff initiated this federal tax liability lawsuit against Ms. Calvin on April 6, 2017. (Doc. 1).

         2. Subject matter jurisdiction exists pursuant to 28 U.S.C. §§ 1340 (establishing district courts' original jurisdiction over federal tax issues), 1345 (establishing district courts' original jurisdiction over “all civil actions, suits or proceedings commenced by the United States”), and 26 U.S.C. § 7402(a) (establishing district courts' jurisdiction to “enforce[] . . . the internal revenue laws”).

         3. Ms. Calvin resides in Marshall County, Alabama (doc. 1 at 2 ¶ 6), which is located within the Northern ...


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