Waterfurnace Int'l, Inc. v. M
| Decision Date | 28 October 2015 |
| Docket Number | Case No. 1:15-CV-008 JD |
| Court | U.S. District Court — Northern District of Indiana |
| Parties | WATERFURNACE INTERNATIONAL, INC., Plaintiff, v. B&S SHEET METAL MECHANICAL, INC., et al., Defendants. |
Now before the Court is the motion for default judgment filed by the plaintiff, WaterFurnace International, Inc., against each of the defendants in this case. [DE 18]. Those defendants include three entities, which are B&S Sheet Metal Mechanical, Inc.; B&S Sheet Metal Mechanical, Inc. d/b/a Jackson Geothermal HVAC and Drilling, LLC1; and Jackson Geothermal HVAC and Drilling, LLC; in addition to two individuals, William Craig Jackson and Garth C. Jackson. For the reasons set forth below, the motion for default judgment is granted in part as to the entity defendants, and is denied in part with leave to refile as to the individual defendants.
WaterFurnace International, Inc. is a corporation engaged in the business of manufacturing, marketing, and selling geothermal systems and equipment. [DE 5]. WaterFurnace received a credit application from a company that listed its name as "B&S SheetMetal Mech, Inc." In the line next to "D/B/A," the application stated: "Jackson Geothermal HVAC & Drilling, LLC." The application was signed by William Craig Jackson and Garth Jackson, who listed their titles as "President" and "Member," respectively. Relying on the representation that those companies constituted the same entity, and thus believing that any extensions of credit would be the obligation of each of those companies, WaterFurnace accepted the application and thereafter extended credit. The entity defendants then issued purchase orders for WaterFurnace materials and equipment for use in a federally funded construction project. WaterFurnace accepted the purchase orders and thereafter shipped the materials and equipment to the entity defendants. The terms and conditions of those sales specify that any amounts that remain unpaid after thirty days will accrue service charges at the rate of 1.5% per month or 18% annually. They also specify that WaterFurnace may recover "all costs and attorneys' fees incurred in collection of all past due invoices and accounts." [DE 5 p. 8, 16].
However, the entity defendants have failed to pay the amounts due, and had an unpaid balance of $312,427.09 as of December 8, 2014. Accordingly, on December 11, 2014, WaterFurnace filed a complaint in Allen County, Indiana against the five defendants, seeking recovery of that amount plus other fees and costs. By January 13, 2015, WaterFurnace had properly effected service of the summons and complaint on each of the defendants by way of a private process server. On January 12, 2015, defendant William Craig Jackson filed a pro se notice of removal in this Court, alleging diversity jurisdiction as the basis for removal. After twice amending the notice of removal, Mr. Jackson properly asserted the predicates for diversity jurisdiction. Specifically, WaterFurnace is incorporated in Indiana and has its principal place of business in Indiana, making it an Indiana citizen. Defendant B&S Sheet Metal Mechanical Inc. (and thus its alias, B&S Sheet Metal Mechanical Inc., d/b/a Jackson Geothermal HVAC andDrilling, LLC) is incorporated in and has its principal place of business in Pennsylvania. Defendant Jackson Geothermal HVAC and Drilling, LLC is a limited liability company that has four members, each of whom are individuals who are citizens of Pennsylvania. The two individual defendants, William Craig Jackson and Garth Jackson, are also each citizens of Pennsylvania. Thus, none of the defendants are citizens of the same state as the plaintiff, satisfying the complete diversity requirement. Further, the amount in controversy exceeds $75,000, exclusive of interest and costs. Accordingly, the Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).
Since filing and amending the notice of removal, though, William Craig Jackson has taken no further action in this case. In addition, none of the other defendants has ever appeared, either in this Court or in state court prior to the removal. Accordingly, on February 16, 2015, WaterFurnace moved for a clerk's entry of default as to each defendant, and certified its service of the motion as to all defendants. The Clerk entered default as to each defendant on February 25, 2015, and no defendant has moved to set aside that default. WaterFurnace then filed the present motion for default judgment on March 30, 2015, along with a Declaration of Indebtedness and a certificate that it served the motion on each defendant. None of the defendants have responded to the motion, and their time to do so has expired.
The entry of a default judgment under Rule 55(b) lies within the sound discretion of the district court. Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 252 (7th Cir. 1990). "In determining whether to enter a default judgment, the court may consider a number of factors including whether there is a material issue of fact, whether the default is largely technical, whether the plaintiffs were substantially prejudiced, and how harsh an effect a default judgment might have." Wolf Lake Terminals, Inc. v. Mut. Marine Ins. Co., 433 F. Supp. 2d 933, 941 (N.D.Ind. 2005) (citing 10A Wright & Miller, Federal Practice and Procedure § 2685 (3d ed. 1998)). Default judgment, however, is not automatic. Plaintiffs seeking default judgment must demonstrate that they are entitled to judgment as a matter of law. Cass Cnty. Music Co. v. Muedini, 55 F.3d 263, 265 (7th Cir. 1995). "In making this inquiry, the court must assume that the factual allegations are, by reason of the default, true." Id. at 265-66; see also Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983) ().
In this case, the docket reflects that each of the defendants were served with the summons and complaint via process server, the last of which occurred on January 13, 2015. The defendants have therefore each received proper notice that an action was pending against them. However, none of the defendants filed an answer to the complaint. Only William Craig Jackson has even appeared in this action, and his activity only encompassed filing and then amending a notice of removal. In addition, even after the Clerk entered each defendant's default and WaterFurnace moved for default judgment, no defendant has moved to set aside the default or responded in opposition to the motion for default judgment. Under these circumstances, the Court must conclude that the defendants do not intend to defend themselves. Default judgment is therefore appropriate as long as the Court has personal jurisdiction over each defendant and the uncontested factual allegations in the complaint establish the requisite elements for liability on WaterFurnace's claim.
While WaterFurnace's motion for default judgment contains no discussion or analysis of those questions, their resolution is straightforward as to the entity defe...
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