Caterpillar Financial Services Corp. v. Lindsey

Citations: 218 F.R.D. 145; 2003 U.S. Dist. LEXIS 21166; 2003 WL 22259483Docket: Civ.A. No. H-02-2919

Court: District Court, S.D. Texas; March 3, 2003; Federal District Court

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The Court, having reviewed the case materials and noting the absence of objections to the Memorandum and Recommendations, adopts the Recommendations as its own. The Court finds that the Defendants, Corrie Dominy and Regina Dominy, have not responded to the Plaintiff's claims and are in default. Consequently, the Clerk of Court is ordered to enter a Judgment of Default in favor of Plaintiff Caterpillar Financial Services Corporation, and the case is dismissed with prejudice.

The Court also grants the Plaintiff's Motion for Default Judgment against both Defendants. The Plaintiff's Verified Complaint was filed on July 31, 2002, and both Defendants were properly served with summons and complaint on August 6, 2002, but failed to respond or appear in court. The Court orders the Defendants to pay the Plaintiff the following: 
- Liquidated damages of $515,592.00, plus accrued interest. 
- Attorneys’ fees totaling $10,113.64, with potential for additional fees if further legal action occurs. 
- All court costs incurred by the Plaintiff. 
- Pre-judgment and post-judgment interest at the maximum legal rate until the judgment is satisfied, excluding the attorneys’ fees portion in case of an appeal or new trial motion. 
- Any additional relief deemed justly entitled to the Plaintiff. 

The Plaintiff's request for a finding of default and entry of default judgment is supported by evidence of proper service and the Defendants' failure to respond.

Caterpillar, a financial services corporation based in Nashville, Tennessee, filed a Complaint on July 31, 2002, to enforce a maritime lien against the Dominys. Caterpillar claims to hold a Preferred Ship Mortgage and Note, executed by Corrie Dominy on January 7, 2001, for $525,000 related to the vessel Miss Lindsey. On the same day, Regina Dominy guaranteed the payment due in the event of Corrie's default. Since April 2002, the Dominys have not made payments, with an outstanding principal of $515,592. Caterpillar invoked the Court's diversity and admiralty jurisdiction and asserts that valid service of process was executed on both Dominys, with Corrie served on August 6, 2002, and Regina on July 31, 2002. The Dominys have failed to respond to the Complaint, leading Caterpillar to seek a default judgment for the owed amount plus interest, costs, and attorney fees.

The excerpt also outlines the legal standards for obtaining a default judgment, noting that a party is subject to such a motion if it fails to respond within the designated timeframe. A default indicates an admission of the well-pleaded facts, except for damages, and a default judgment typically serves as a final adjudication of those issues. However, obtaining a default judgment is not automatic; it is at the court's discretion and requires supporting evidence of notice and failure to respond. The text emphasizes that default judgments are generally disfavored in legal proceedings.

The court evaluates whether to issue a judgment of default by considering several factors: the existence of material factual issues, potential substantial prejudice, clarity of grounds for default, and the presence of a good faith mistake or excusable neglect. Any uncertainties regarding entering or vacating a default judgment should favor the defaulting party. In this case, Caterpillar's request for a default judgment against the Dominys is supported by evidence showing proper personal service and sworn statements regarding claims to a maritime lien due to the Dominys' failure to respond to allegations of non-compliance with financial agreements. The Dominys’ lack of response constitutes an admission of the facts necessary to enforce the maritime lien. Consequently, it is recommended that Caterpillar’s request for default judgment be granted, and the Dominys be declared in default. The Clerk of Court is instructed to file and distribute this Memorandum and Recommendations, and the failure to object within ten days may limit appeal options.