F.M.D. Holdings v. Regent Fin. Corp.

Decision Date10 December 2021
Docket Number5:20-CV-269-H
CourtU.S. District Court — Northern District of Texas


The first rule of litigating in federal court is that the parties and the Court must work together “to secure the just speedy, and inexpensive determination of every action and proceeding.” Federal Rule of Civil Procedure 1.

That has not happened here. F.M.D. Holdings, LLC sued Regent Financial Corporation, Steven C. Bradley, and Mark Bradley alleging that they infringed FMD's intellectual property rights and committed various state torts in the process. FMD seeks an injunction, as well as any monetary damages, fees and costs to which it may be entitled.

But determining whether FMD is entitled to what it seeks has been stymied by the defendants' refusal to either defend themselves or comply with this Court's orders. FMD moves once again for this Court to enter a default judgment against the defendants.

FMD has tolerated infringement of its rights long enough. The defendants have disrespected the Court long enough. The Court has attempted to accommodate the defendants long enough. For failing to contest the suit and for ignoring numerous orders a default judgment-including an injunction and fees-will be entered against the defendants.

1. Factual and Procedural History

The Court's prior orders (Dkt. Nos. 18, 26, 33, 37, 40, 41, 53) outline the tortured history of these proceedings and the lengths to which the Court has gone to avoid entering a default judgment in this case.

This saga began on November 11, 2020, when FMD Holdings, LLC filed suit against Regent Financial Corporation, Steven C. Bradley, and Mark E. Bradley. Dkt. No. 1. The complaint alleges that the defendants infringed FMD's trademarks and copyrights. Id. at 5-7. FMD sought injunctive and monetary relief. Id. at 12-14.

Eleven days later, the Clerk received executed summonses as to all three defendants. Dkt. No. 9. Steven Bradley then moved, pro se, for more time to respond to the complaint. Dkt. No. 10. The Court granted him-and only him-more time to file an answer. Dkt. No. 11.

Nevertheless, all three defendants filed answers on January 8. Dkt. Nos. 15, 16, 17. Problems abounded. Dkt. No. 18. All three answers were signed by the same filer-Steven Bradley. See Dkt. Nos. 15 at 2 (Answer of Mark E. Bradley); Dkt. No. 16 at 2 (Answer of Steven C. Bradley); Dkt. No. 17 at 2 (Answer of Regent Financial Corp.). But Steven Bradley is not an attorney, so he can only represent himself. Dkt. No. 18 at 2. The answers on behalf of Mark Bradley and Regent Financial were thus nullities. Id. Moreover, all three answers were general denials, which are “available to a party acting in good faith only in the most exceptional cases.” Mary Kay, Inc. v. Dunlap, No. 3:12-CV-0029-D, 2012 WL 2358082, at *7 (N.D. Tex. June 21, 2012) (Fitzwater, C.J.) (quoting 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1265, at 549 (3d ed. 2004) (hereinafter “Wright & Miller”); Dkt. No. 18 at 2-3. Accordingly, the Court struck all three answers and ordered the defendants to file new ones by February 5. Dkt. No. 18 at 3.

When they failed to do so, FMD asked the Clerk to enter default judgment against the defendants, pursuant to Federal Rule of Civil Procedure 55. Dkt. No. 19. Obtaining a default judgment is a three-step process involving the defendant's default, the entry of default by the Clerk, and a default judgment. N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). By their failure file timely answers to the complaint, the defendants satisfied the first step. And, on February 25, the Clerk entered the defendants' default, thus completing the second step. Dkt. No. 20. FMD then asked the Court to enter default judgment-the third and final step. Dkt. No. 21.

Claiming that they did not receive the Court's order striking their answers, the request for entry of default, or the Clerk's entry of default, Steven and Mark sought additional time to file a response to FMD's motion for default judgment and to “explore the possibility of hiring counsel.” E.g., Dkt. No. 22 at 1. Yet again, Steven signed on behalf of Regent Financial despite the fact that he is not an attorney. The Court ordered the parties to “file appropriate responses curing all stated deficiencies on or before April 16, 2021 or face a possible default judgment.” Dkt. No. 26 at 2. FMD, on the defendants' behalf, filed a consented motion to extend that deadline to May 17 (Dkt. No. 30), which the Court granted (Dkt. No. 31). That deadline came and went without any further filings by the defendants.

On July 6, still lacking an answer, the Court issued an order directing the defendants to show cause by July 16 as to why default judgment should not be entered against them. Dkt. No. 33. The Court explicitly noted that the failure to file a timely response would result in a default judgment being entered against them. Id. at 3.

The defendants filed no response. FMD informed the Court that the parties had conducted unsuccessful settlement negotiations, so the Court on July 23 ordered FMD to file either an amended motion for default judgment or a status report explaining how litigation would proceed. Dkt. No. 34. FMD chose the former and filed an amended motion for default judgment on August 6, adding the attorney's fees it had incurred since its first motion. Dkt. No. 35; compare Dkt. No. 35-2 at 4 (proposed order for amended motion, seeking $43, 395.75) with Dkt. No. 21-2 at 4 (proposed order for original motion, seeking $30, 189.04 in fees).

On September 10, the Court scheduled a hearing on FMD's amended motion for default judgment for September 22. Dkt. No. 37. That order explained that the Court ha[d] tentatively concluded that FMD [was] entitled to default judgment.” Id. at 1. Then, on September 17, Steven Bradley reappeared and requested a continuance because he had COVID. Dkt. No. 39. Less than two hours later, the Court granted the motion and reset the hearing for October 26. Dkt. No. 40. Given Steven's reappearance, the Court invited any defendant to file a motion to set aside the clerk's entry of default by no later than October 8. Dkt. No. 41 at 2.

On October 4, Mark and Steven-but not Regent Financial, which has yet to file anything in this case-filed identical general denials, motions to compel alternative dispute resolution, and motions to set aside the entry of default. Dkt. Nos. 44-47. Steven and Mark also renewed their request that the Court abate this case pending mediation “as outlined in [the] Alternative Dispute Resolution Act [p]ursuant to Rule of Civil Procedure 49 CFR § 1109.3.” E.g., Dkt. No. 45; see also Dkt. No. 15 (same). That citation is nonsense because it relates only to disputes within the jurisdiction of the Surface Transportation Board, which this is not. As for the motion to set aside the Clerk's entry of default, the defendants provided no argument or authority for why there was good cause to do so, as Rule 55 requires. See Dkt. Nos. 45; 47.

FMD responded. Dkt. No. 49. The response notes that Regent has still not filed an answer in this case; that the most recent answers filed by Steven and Mark suffer from the same defects as the original answers; that the defendants offer nothing close to the “good cause” required to set aside the clerk's entry of default; and that mediation is unnecessary because the parties have previously tried to settle their dispute, were unsuccessful, and nothing has changed that would lead to a different outcome. Id. at 3-5. FMD also noted that the infringing website remains active, representing an ongoing harm to FMD's reputation and rights. Id. at 4. The defendants were not granted a reply.

The Court proceeded in anticipation of holding the October 26 hearing on FMD's default motion. But on October 21, Mark Bradley requested a continuance, stating that now he had COVID. Dkt. No. 51. The Court granted the continuance and reset the hearing for December 2 before FMD had a chance to respond. Dkt. No. 53.

Also on October 21, Steven filed a “Request for Court to Accept Denial of Allegations and Enter into Mediation.” Dkt. No. 52. The filing states that Steven “intends ‘in good faith to deny all the allegations of a pleading.' Id. at 1 (citing to Fed.R.Civ.P. 8(b)(3), regarding general denials). Steven also counters FMD's representation that the parties have engaged in good faith settlement negotiations. Id. at 1-3. Steven notes that the plaintiffs made an offer to settle the case for $40, 000, but that he, Mark, and Regent are all, in his words, “broke.” Id. at 1. Steven added that the defendants would be willing to shutter the offending website, sign over the domain name, and “pay the plaintiffs reasonable legal expenses over an extended period time.” Id. at 1-2. Neither Mark nor Regent have confirmed the details of this account, nor have they confirmed that they would, in fact, be amenable to the terms Steven purportedly offered the plaintiff. Steven goes on to say that plaintiff's counsel never responded and that “at no point in time can this be considered ‘good faith' settlement discussions.” Id. at 2.

Despite the Court's order admonishing him not to (Dkt. No. 26 at 3), Steven again speaks for Regent: He says that “Regent Financial is broke it has no money and cannot pay for council [sic].” Id. at 2. Steven also asserts that the “Finance My Deductible” website- the one allegedly built with FMD's stolen code-is down. Id. He also argues that all...

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