United States District Court, D. South Carolina, Columbia Division
Tech Blast, Inc., a California corporation; Visa Tech, Inc., a California corporation, Plaintiffs,
Lewis Clark, Jr., an individual; Aaron Troy Addison, an individual; Does 1 through 20, inclusive; Fanatik Productions, LLC, a South Carolina limited liability company; Thaddeus W. Jones, Jr., an individual; Darren Smith, an individual, doing business as D Smith Consulting, Defendants.
REPORT AND RECOMMENDATION
J. GOSSETT, UNITED STATES MAGISTRATE JUDGE
filed this diversity action on July 8, 2016. This matter is
before the court pursuant to 28 U.S.C. § 636(b) and
Local Civil Rule 73.02(B)(2)(c) (D.S.C.) for a Report and
Recommendation on Plaintiffs' motion for a final judgment
as to Defendants Fanatik Productions, LLC and Thaddeus W.
Jones, Jr. pursuant to Federal Rule of Civil Procedure 54(b).
(ECF No. 67.) Having carefully reviewed Plaintiffs'
motion and the applicable law, the court concludes the motion
should be granted.
filed their original Complaint against Defendants Lewis
Clark, Jr., Ruby K. Clark, and Aaron Troy Addison. (Compl.,
ECF No. 1.) Plaintiffs later amended the Complaint to add
Defendants Fanatik Productions, LLC (“Fanatik”),
Thaddeus Jones, Jr., Darren Smith, and Does 1 through 20.
(Am. Compl., ECF No. 27.) Plaintiffs assert Lewis Clark, Jr.
executed two unauthorized wire transfers from Plaintiffs'
business bank accounts on which Clark was an authorized
co-signer. (Id. ¶ 15, ECF No. 27 at 3.)
Plaintiffs indicate those transfers were made to bank
accounts of Fanatik and Clark, and some of the funds
eventually reached Addison. (Id. ¶¶
17-18.) As to Darren Smith and the Doe Defendants, Plaintiffs
indicate they conspired with the other defendants to steal
money from Plaintiffs. (Id. ¶ 58, ECF No. 27 at
8.) Plaintiffs also indicate the Doe Defendants were unjustly
enriched, and they seek the imposition of a constructive
trust. (Id. ¶¶ 51-56, 63-65, ECF No. 7-9.)
Plaintiffs' Amended Complaint seeks judgment totaling
$278, 555 among Defendants. (Id. ¶ A, ECF No.
27 at 9-10.)
8, 2017, Plaintiffs filed a satisfaction of judgment that
indicated Clark and Addison each executed a confession of
judgment in the amount of $278, 555 and paid Plaintiffs a
total of $225, 000 pursuant to the terms of a settlement
agreement. (Id. ¶¶ 6-8, ECF No. 59-1 at
2.) The satisfaction of judgment indicates Plaintiffs reserve
the right to seek the remainder of their damages in this
matter against these defendants. (ECF No. 50.)
16, 2017, Plaintiffs filed a motion for default judgment
pursuant to Federal Rule of Civil Procedure 55(b) as to
Fanatik and Jones. (ECF No. 59.) In support of that motion,
Plaintiffs attached the affidavit of Anthony Grimaldi, the
president of Plaintiffs Tech Blast, Inc. and Visa Tech, Inc.
(Grimaldi Aff., ECF No. 59-1.) Grimaldi swears that
Plaintiffs have not received the remainder of the balance
owed to them pursuant to the confession of judgment against
Clark and Addison and, having not received any payment from
the other defendants, Plaintiffs swear they seek a judgment
for $53, 555 plus costs from the remaining defendants.
(Id. ¶¶ 9-12, ECF No. 59-1 at 3.)
now files a motion for a final judgment as to Fanatik and
Jones pursuant to Federal Rule of Civil Procedure Rule 54(b).
This rule allows the court to enter final judgment as to
fewer than all claims or parties “only if the court
expressly determines that there is no just reason for
delay.” Fed.R.Civ.P. 54(b). The purposes of the rule
are to prevent piecemeal appeals when multiple claims are
resolved in a single lawsuit or to provide relief to
litigants that would suffer undue hardship if final judgment
is not entered on the adjudicated claim prior to the
resolution of unadjudicated claims. Braswell Shipyards,
Inc. v. Beazer E., Inc., 2 F.3d 1331, 1335 (4th Cir.
1993). Relief under Rule 54(b) should not be granted
routinely or as an accommodation to counsel. Id. The
moving party bears of the burden of demonstrating the need
for relief. Id.
determining whether “no just reason for delay” in
the entry of final judgment exists, the court should consider
the following factors where applicable:
(1) the relationship between the adjudicated and
unadjudicated claims; (2) the possibility that the need for
review might or might not be mooted by future developments in
the district court; (3) the possibility that the reviewing
court might be obliged to consider the same issue a second
time; (4) the presence or absence of a claim or counterclaim
which could result in a set-off against the judgment sought
to be made final; (5) miscellaneous factors such as delay,
economic and solvency considerations, shortening the time of
trial, frivolity of competing claims, expense, and the like.
Id. at 1335-36.
the court must also consider that the final judgments
Plaintiffs seeks against Fanatik and Jones are based on their
default. Importantly, the United States Court of Appeals for
the Fourth Circuit has warned that where liability among
defendants is joint, several, or joint and several, a default
judgment entered against a defendant only bars that defendant
from participating in the adjudication of the claims, and if
the participating defendants are successful on the merits of
the claim, that success enures to the defaulting defendant.
See U.S. for Use of Hudson v. Peerless Ins.
Co., 374 F.2d 942, 944-45 (4th Cir. 1967) (citing
Frow v. De La Vega, 82 U.S. 552 (1872)); see
also Jefferson v. Briner, Inc., 461 F.Supp.2d 430, 434
(E.D. Va. 2006) (“And, if Frow still stands
for anything, it explicates a cautionary warning to the
courts: logically inconsistent judgments resulting from an
answering defendant's success on the merits and another
defendant's suffering of a default judgment are to be
avoided.”). Other courts in this circuit, relying on
Peerless and Frow, have found “just
reason for delay” of the entry of default judgment
against one of multiple defendants because of the possibility
of inconsistent judgments between defendants in default and
answering defendants. See Joe Hand Promotions, Inc. v.
Sheedy, Civil Action No. 4:08-cv-1797-TLW-TER, 2010 WL
3724754, at *3 (D.S.C. May 13, 2010) (finding “just
reason” to delay an entry of default judgment against
the defaulting defendant because the other defendant had yet
to litigate the merits of causes of action raised against
both defendants); Jefferson v. Briner, Inc., 461
F.Supp.2d 430, 434 (E.D. Va. 2006) (“[T]he avoidance of
logically inconsistent judgments in the same action and
factually meritless default judgments provide ‘just
reason for delay' within the meaning of Rule
54(b).”); but see People's United Equip. Fin.
Corp. v. Wright, Civil Action No. 1:11cv0249 (LMB/JFA),
2011 WL 2607155, at * 3 (E.D. Va. June 9, 2011) (finding no
just cause for delay in entering a default judgment against
the defaulting defendant where the plaintiff raised one cause
of action against both defendants, but the defendants raised
separate defenses that would prevent the imposition of
logically inconsistent judgments).
the court finds Plaintiffs have met their burden of showing
that they are entitled to the entry of a final judgment
against Fanatik and Jones. See Braswell Shipyards, 2
F.3d at 1335. Plaintiffs' sole argument in support of the
motion is that if the court issues the default judgments,
Plaintiffs may be able to obtain the relief they seek against
those defendants without having to litigate against the other
defendant, which could hasten, rather than delay, the
disposition of this action. (Mot. for Final J., ECF No. 67 at
1.) However, Plaintiffs devote no argument to the issue of
whether a judgment against Fanatik and Jones would be
inconsistent with a potential judgment against the remaining
defendant who has not settled and is not in default-Darren
Smith. But, Plaintiffs do not raise a cause of action against
Smith that they also raise against Fanatik and Jones. The
sole cause of action raised as to Smith is for civil
conspiracy, in which Plaintiffs allege Smith conspired with
Clark, Addison, and the Doe Defendants to induce Plaintiffs
to add Clark as a cosigner on Plaintiffs' bank accounts
with intent to injure Plaintiffs. Therefore, any defense
raised by Smith could not enure to the benefit of Fanatik or
Jones. See People's United Equip. Fin. Corp.,
2011 WL 2607155, at * 3. Moreover, the court finds the entry
of final judgments against Fanatik and Jones would not likely
lead to piecemeal appeals because there is only one defendant
remaining who is actively defending against Plaintiffs'
claim, which does not overlap with the claims Plaintiffs
raise against the defaulted defendants. Finally, granting
Plaintiffs' motion may relieve the parties of the need to
litigate secondary claims if Plaintiffs can obtain the relief
they seek from Fanatik and Jones.
foregoing reasons, the court recommends Plaintiffs'
motion for entry of a final judgment against Defendants
Fanatik Productions, LLC and Thaddeus W. Jones, ...