United States District Court, W.D. Arkansas, Texarkana Division
ORDER
Susan
O. Hickey United States District Judge
Before
the Court is Plaintiff Community State Bank's Motion for
Default Judgment. (ECF No. 27). No party has responded to the
motion and the time to do so has passed. See Local
Rule 7.2(b). The Court finds the matter ripe for
consideration.
On May
9, 2018, Plaintiff filed this interpleader action pursuant to
28 U.S.C. § 1335 to resolve competing claims to certain
funds held in Plaintiff's possession. On May 15, 2018,
Plaintiff served Separate Defendant Maxine Wilson, indicated
by her signature on a return receipt for certified mail. (ECF
No. 6). As of the date of this Order, Separate Defendant
Wilson has not appeared in this action, nor has she answered
or otherwise filed a responsive pleading to Plaintiff's
complaint.
On
August 9, 2018, the Clerk of Court entered default as to
Separate Defendant Wilson. In the instant motion, Plaintiff
asks the Court to enter default judgment as to Separate
Defendant Wilson, thereby denying any claim she has to the
funds at issue in this case.
Federal
Rule of Civil Procedure 55 contemplates a two-step process
for the entry of default judgment. Fraserside IP L.L.C.
v. Youngtek Solutions Ltd., 796 F.Supp.2d 946, 951 (N.D.
Iowa 2011) (citation and internal quotation marks omitted).
First, pursuant to Rule 55(a), the party seeking a default
judgment must have the clerk of court enter the default by
submitting the required proof that the opposing party has
failed to plead or otherwise defend. Id. Second,
pursuant to Rule 55(b), the moving party may seek entry of
judgment on the default under either subdivision (b)(1) or
(b)(2) of the Rule. Id. Entry of default under Rule
55(a) must precede a grant of default judgment under Rule
55(b). Id. As previously noted, the Clerk of Court
entered default as to Separate Defendant Wilson on August 9,
2018.
A
“default” occurs when a defendant fails to answer
or respond to a complaint, and an “entry of
default” is what the Clerk of Court enters when it is
established that a defendant is in default. Denton v.
Conveyor Tech. & Components, Inc., 4:12-cv-191-KGB,
2013 WL 2422679, at *1 (E.D. Ark. June 1, 2013). The entry of
default is a procedural step in obtaining a default judgment;
it is not determinative of any rights. Roberts v. Kevmar
Capital Corp., No. 4:11-cv-0681-BRW, 2012 WL 1193133, at
*1 (E.D. Ark. April 10, 2012). The entry of a default
judgment is committed to the sound discretion of the district
court. F.T.C. v. Packers Brand Meats, Inc., 562 F.2d
9, 10 (8th Cir. 1977). Pursuant to Federal Rule of Civil
Procedure 8(b)(6), “[a]n allegation-other than one
relating to the amount of damages-is admitted if a responsive
pleading is required and the allegation is not denied.”
In an interpleader context, “[i]t has been repeatedly
held that ‘[t]he failure of a named interpleader
defendant to answer the interpleader complaint and assert a
claim to the res can be viewed as forfeiting any claim of
entitlement that might have been asserted.'”
Viking Ins. Co. of Wis. v. Kemp, No.
3:12-cv-0216-KGB, 2013 WL 6780571, at *2 (E.D. Ark. Dec. 19,
2013) (collecting cases); see also Nationwide Mut. Fire
Ins. Co. v. Eason, 736 F.2d 130, 133 n.4 (4th Cir. 1984)
(“[I]f all but one named interpleader defendants
defaulted, the remaining defendant would be entitled to the
fund.”).
Upon
consideration, the Court finds that good cause has not been
shown for the motion at this time. Separate Defendant Wilson
has failed to answer Plaintiff's complaint. Moreover, the
Clerk of Court has entered default against Separate Defendant
Wilson. However, Separate Defendant J. Schuyler Marvin has
previously raised an argument that the Court should dismiss
this action pursuant to the Colorado River
abstention doctrine so that a Louisiana state court can
determine the proper distribution of the funds at issue in
accordance with an applicable Louisiana civil forfeiture
statute. The Court has ordered Separate Defendant Marvin to
file a motion to dismiss regarding that issue. If the Court
ultimately determines that abstention is appropriate in this
case, the Court sees no reason to enter default judgment
against Separate Defendant Wilson, thereby adjudicating her
claim to the funds at issue, prior to the Court abstaining
from and dismissing this case.
Thus,
the Court finds, in its discretion, that the instant motion
for entry of default judgment should be denied as premature
at this time. See Packers Brand Meats, Inc., 562
F.2d at 10 (stating that the decision of whether to enter
default judgment is committed to the federal district
court's sound discretion). If this case remains for
further proceedings after the Court has ruled on Separate
Defendant Marvin's motion to dismiss, Plaintiff may
refile the instant motion.[1]
For the
above-discussed reasons, the Court finds that Plaintiff's
motion (ECF No. 27) should be and hereby is DENIED
WITHOUT PREJUDICE.
IT
IS SO ORDERED.
---------
Notes:
[1] Although not discussed by Plaintiff in
the instant motion, Intervenor Gary Wilson mentioned in a
subsequent, unrelated filing that entry of default judgment
against Separate Defendant Maxine Wilson could potentially
deprive the Court of jurisdiction over this matter. A party
bringing a claim under statutory interpleader, governed by 28
U.S.C. § 1335, as Plaintiff did here, must show minimal
diversity between adverse claimants. State Farm Fire
& Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967). It
appears that Separate Defendant Maxine Wilson is an Arkansas
citizen, while all other claimants in the case are Louisiana
citizens. Thus, minimal diversity appears to exist between
the claimants at the moment. However, entry of default
judgment against Separate Defendant Maxine Wilson would cause
her to forfeit her claim to the funds and the remaining
claimants would all be Louisiana citizens. Federal district
courts within the Eighth Circuit have found the minimal
diversity requirement for statutory interpleader to be
lacking when all claimants are the citizens of the same
state, even if the disinterested stakeholder is a citizen of
a different state. See Boatmen's First Nat'l Bank
of Kan. City v. McCoy, 861 F.Supp. 846, 848 (W.D. Mo.
1994). Because Plaintiff brought this case solely under the
federal interpleader statute, and not under Federal Rule of
Civil ...