Patray v. Northwest Pub., Inc.

• Decision Date: 13 June 1996
• Docket Number: Civil Action No. 696-52.
• Citation: 931 F. Supp. 865
• Parties: Stuart PATRAY, Terry Patray, Plaintiffs, v. NORTHWEST PUBLISHING, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Georgia

931 F. Supp. 865

Stuart PATRAY, Terry Patray, Plaintiffs, v. NORTHWEST PUBLISHING, INC., et al., Defendants.

Civil Action No. 696-52.

United States District Court, S.D. Georgia, Statesboro Division.

June 13, 1996.

COPYRIGHT MATERIAL OMITTED

Stuart Patray, Pro Se.

Terry Patray, Pro Se.

ORDER

EDENFIELD, Chief Judge.

Plaintiffs Stuart and Terry Patray move this Court for entry of a default judgment against defendants Northwest Publishing, Inc. ("Northwest") and various individuals. The motion is unopposed. Plaintiffs have proceeded pro se, requiring this Court to construe their pleadings liberally. See, e.g., White v. Butterworth, 70 F.3d 573, 574 (11th Cir.1995).

I. BACKGROUND

The Patrays are Georgia citizens. Complaint ¶¶ 4-5. All of the individual defendants reside in Utah, id. ¶¶ 7-10, and Northwest is a Utah corporation. Id. ¶ 6. The Patrays alleged that defendant Jason Van Treese, acting as Northwest's Marketing Director, induced Stuart Patray to publish his "Root Of All Evil" book through Northwest. Complaint ¶¶ 8. Promising Stuart Patray $9,950 plus 15% royalty on guaranteed 2,500 book sales, id. ¶ 13, Van Treese convinced Stuart Patray to sign Northwest's publishing contract. Id. ¶¶ 7, 11-19; Exh. A. Patray was required, however, to invest $6,125 into the project. Id.

Van Treese thus sent the contract to Patray in Georgia, where he signed and sent it, along with his $6,125 check, back to Van Treese in Utah. Complaint ¶ 20-21 & Exh. B. Patray relied upon the promised (December 1994) publishing date because he borrowed the $6,125 from a "local financial institution," Terry Patray co-signed for that loan, id. ¶ 22,¹ and they had to pay interest on it. Id. ¶ 27.

Van Treese informed Patray that Northwest's Operations Manager (and named defendant) Jim Perkins would be Northwest's "contact person." Complaint ¶ 23. When it appeared that the book would not be completed by December, 1994, Patray sent Van Treese a 12/19/94 letter demanding his money back and release from the contract. Id. ¶ 33. In a January, 1995 telephone conversation, Van Treese tried to convince Patray to await a March, 1995 publication, id. ¶¶ 34-39, at the same time adverting to Perkins' earlier assurances that the delay was attributable to "quality control" and "normal" publication processes, id. ¶¶ 24, 26, 35, though publishing "variables" nevertheless permit no firm date. Van Treese informed Patray that the book would be published in thirty days. Id. ¶ 38.

Losing patience, Patray sent defendant James Van Treese, Northwest's publisher, id. ¶ 7, a 2/7/95 letter demanding a refund based on Northwest's failure to perform. Id. ¶ 42. Both defendants Jason and James Van Treese failed to return Patray's calls thereafter. Id. ¶ 43. A 3/8/95, follow-up demand letter likewise fetched no response. Id. ¶ 44.

Subsequently, the Patrays sued defendants² in State court and, in July, 1995, a defense lawyer offered them a $7,000 settlement. The Patrays accepted but never received payment, id. ¶¶ 46-47, so they filed this action, alleging diversity subject matter jurisdiction under 28 U.S.C. § 1332(a), id. ¶¶ 48-50, and personal jurisdiction under Georgia's Georgia Long Arm statute, O.C.G.A. § 9-10-91(1). Id. ¶ 62-77.

Patray alleged fraud and "misrepresentation and deceit." He sought to recover punitive damages based on the defendants' misrepresentations concerning the book's publication date and projected return on Patray's investment. Id. ¶¶ 51-61, 84-87. He also sought damages for breach of contract. Id. ¶ 83. More specifically, he sought $9,950 in "consequential damages" id. Relief Requested ¶ 1; $15,000 in compensatory damages; id. ¶ 2; $250,000 in punitive damages from each defendant, id. ¶ 3; recovery of litigation expenses under O.C.G.A. § 13-6-11, id. ¶ 4; and recovery of interest under O.G.G.A. § 13-6-13. Id. ¶ 5.

On 4/19/96, Patray filed "Out of State Affidavits" showing 3/28/96 personal service of the Summons and Complaint upon defendants Northwest, James and Jason Van Treese, Jim Perkins and Ann Cude. Upon defendants' failure to file an Answer, Patray moved the Court for entry of default on 5/8/96. He certified that on 5/7/96 he served James Van Treese by mail with a copy of his motion, though he referenced it as "plaintiffs' Motion for entry of Clerk's Default Judgment" (emphasis added) when in fact he made it clear, on page 1 and in ¶ 7 of the motion, that he sought entry by this Court. No response has been filed. See Rule 55(b)(2) (3-day notice required); Local Rule 7.5 (15-day motion reply period).

II. ANALYSIS

A motion for the Court's entry of judgment by default³ is not granted as a matter of right, and in fact is judicially disfavored. 10 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Prac. & Proc. Civil 2d §§ 2681, 2685. That is why F.R.Civ.P. 55(b)(2) vests the Court with judicial discretion in determining whether the judgment should be entered. Id. § 2685 at 421 (citing Mason v. Lister, 562 F.2d 343, 345 (5th Cir.1977)). In that regard, the commentators indicate that

the ability of the court to exercise its discretion and refuse to enter a default judgment is made effective by the two requirements in Rule 55(b)(2) that an application must be presented to the court for entry of judgment and that notice of the application must be sent to the defaulting party if he has appeared.

10 Federal Prac. & Proc. Civil 2d § 2685 at 423 (emphasis added).

The appearance requirements are not strict. See Key Bank of Maine v. Tablecloth Textile Corp., 74 F.3d 349, 353 (1st Cir.1996); 10 Federal Prac. & Proc. Civil 2d § 2686; 6 Moore's Fed.Prac. ¶ 55.053. Nevertheless, no defendant has made any sort of appearance in this case. Thus, while Patray's own certification reveals that he served only defendant James Van Treese with the instant motion, and therefore notice has not been provided to the remaining defendants, nevertheless, their prior non-appearance in this case neutralizes Patray's Rule 55(b)(2) notice obligation.⁴ It is in that sense that the formality of first having default "entered" on the docket for the purpose of facilitating notice is, at this point, dispensable. See Meehan v. Snow, 652 F.2d 274, 276 (2nd Cir.1981), discussed in 6 Moore's Fed.Prac. ¶ 55.031 n. 15.

In any event, the Court does not view these developments as inhibiting its duty to exercise discretion in doing same. 10 Federal Prac. & Proc. Civil 2d § 2683 at 416 ("To make certain that they occur only in appropriate cases, the courts have discretionary power to deny a motion for judgment by default, even when a technical default has occurred, and to allow the action to be tried on the merits"). The following principles guide this Court's discretion:

(1) The Court must have personal and subject-matter jurisdiction over the defendants. 10 Federal Prac. & Proc. Civil 2d § 2682 at 407. "The presence of the court's jurisdiction should appear on the face of the complaint." 6 Moore's Fed. Prac. ¶ 55.023.

(2) "Upon entry of a default judgment, the well-pleaded allegations of the complaint are to be accepted as true, except those relating to the amount of damages." Sales v. Republic of Uganda, 828 F.Supp. 1032, 1038 (S.D.N.Y.1993).

(3) However, "the complaint must state a cause of action." 6 Moore's Fed.Prac. ¶ 55.023 at 55-9. In other words, "judgment by default may be granted only for such relief as may lawfully be granted upon the well-pleaded facts alleged in the complaint." 6 Moore's Fed. Prac. ¶ 55.022 at 55-20.

(4) Furthermore, "while the well-pleaded facts alleged in the complaint are deemed admitted on entry of default, plaintiff's conclusions of law are not deemed admitted or established, and the court may grant only the relief for which a sufficient basis is asserted in the complaint." 6 Moore's Fed.Prac. ¶ 55.022 at 55-20 (citing Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) ("The defendant is not held to admit facts that are not well pleaded or to admit conclusions of law") (emphasis original)). In that sense "a default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover." Id.; Wahl v. McIver, 773 F.2d 1169, 1172-73 (11th Cir.1985) (district court was correct in denying motion for default judgment against county's public defender since the plaintiff's allegations did not state a cause of action against him).

(5) "Once the court determines that a judgment by default should be entered, it will determine the amount and character of the recovery that should be awarded." 10 Federal Prac. & Proc. Civil 2d § 2688 (1996 Supp.).

(6) Generally, damages may be awarded without a hearing if they are for a liquidated amount, which means a "sum certain." Id. § 2683 at 414.

(7) However, a plaintiff "cannot satisfy the certainty amount simply by requesting a specific amount. He must also establish that the amount is reasonable under the circumstances." Id. § 2683 at 415; § 2684 at 418.

(8) "It is a proper exercise of judicial power for a court upon default, by taking evidence when necessary or by computation from facts of record, to fix the amount which the prevailing party is lawfully entitled to recover and then give judgment accordingly." Kleier Advertising, Inc. v. John Deery Motors, Inc., 834 F.Supp. 311, 314 (D.Iowa 1993). The trial judge, sitting without a jury, has considerable latitude in determining the amount of the damages. Jones v. Winnepesaukee Realty, 990 F.2d 1, 4 (1st Cir.1993).

(9) In a default case, neither the plaintiff nor the defendant has a constitutional right to a jury trial on the issue of damages. Matter of Dierschke, 975 F.2d 181, 185 (5th Cir.1992).

In this case, some of the claims are well-pleaded, and others are not. Accepting the allegations as true, no claim is stated, and thus no basis for recovery exists, for Terry Patray, who simply co-signed Stuart Patray's loan and for whom there is otherwise alleged no contact with ...