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United States v. Clark

United States District Court, D. South Carolina, Columbia Division

March 12, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
JEFFREY P. CLARK and CATHY M. CLARK, Defendants. 18. Tax Year Date of Assessment Amount Assessed Tax Interest Penalties Tax Year Amount Assessed Against Defendant Cathy M. Clark Date of Assessment § 6702 Penalty Interest Tax Year Amount Assessed Against Defendant Jeffrey Clark Date of Assessment § 6702 Penalty Interest Date Recorded Taxpayer Tax Year(s)

          ORDER AND OPINION GRANTING DEFAULT JUDGMENT

         The United States of America (the “Government”) filed this action against Defendants Jeffrey P. Clark and Cathy M. Clark (together “Defendants”) “to reduce to judgment unpaid individual federal tax liabilities and penalties owed” and to foreclose on federal tax liens against Defendants' real property located at 1805 Windmill Road, Leesville, South Carolina 29070 (the “Subject Property”). (ECF No. 1 at 1 ¶ 1.)

         This matter is before the court by way of the Government's unopposed Motion for Default Judgment pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. (ECF No. 15.) For the reasons set forth below, the court GRANTS the Government's Motion for Default Judgment.

         I. JURISDICTION

         “A court must have both subject matter and personal jurisdiction over a defaulting party before it can render a default judgment.” E.g., United States v. Pacheco, C/A No. 1:17cv0054 (LO/JFA), 2017 WL 3638077, at *2 (E.D. Va. July 10, 2017). This court has subject matter jurisdiction over the Government's claims via 28 U.S.C. § 1331, as the claims arise under the laws of the United States, and also via 28 U.S.C. §§ 1340, 1345, and 26 U.S.C. § 7402, which empower district courts to hear claims arising under the Internal Revenue Code. Because Defendants reside in this judicial district (see infra. ¶ 2), they are subject to the court's personal jurisdiction.

         II. RELEVANT BACKGROUND TO THE PENDING MOTION

         1. On December 20, 2017, the Government filed the Complaint against Defendants in this action. (ECF No. 1.)

         2. On March 1, 2018, Defendants signed Waivers of the Service of Summons expressly acknowledging that the failure to answer or otherwise plead would result in a default judgment. (ECF Nos. 7-1, 8-1.)

         3. Pursuant to Rule 4(d)(3), Defendants were required to answer or otherwise respond to the Complaint within sixty (60) days from March 1, 2018, the date the request for waiver of service was sent. (ECF Nos. 7-1, 8-1.)

         4. Thereafter, on March 8, 2018, the Government effectuated service of the Summons and Complaint on Defendants by United States mail sent to their address at 1805 Windmill Road, Leesville, South Carolina 29070. (ECF Nos. 7 at 1-2, 8 at 1-2.)

         5. The Government filed the Waivers of the Service of Summons on March 8, 2018. (Id.)

         6. Defendants failed to answer the Complaint, move in response to the Complaint, or otherwise serve a responsive pleading on or before April 30, 2018.

         7. Thereafter, on May 15, 2018, the Government filed a Request for Entry of Default. (ECF No. 12.)

         8. The Clerk of Court entered default in favor of the Government on May 15, 2018. (ECF No. 13.)

         9. On July 13, 2018, the Government filed the instant Motion for Default Judgment.

(ECF No. 15.)

         III. LEGAL STANDARD

         10. Rule 55(b)(2) provides for the entry of default judgment by the court against a party in default. Fed.R.Civ.P. 55(b)(2).

         11. When the defendant has failed to respond to the complaint and is in default, the court should accept the facts as set forth in the complaint. See Fed. R. Civ. P. 8(b)(6); see also Direct TV, Inc. v. Rawlins, 523 F.3d 318, 322 n.1 (4th Cir. 2009); Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (“A Defendant in default concedes the factual allegations of the Complaint.”).

         12. “Default does not, however, constitute an admission of the adversary's conclusions of law, and is not to be ‘treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover.'” United States v. Forbes, Case No. 1:17-cv-00530 (LMB/IDD), 2017 WL 5433201, at *2 (E.D. Va. Aug. 24, 2017) (quoting Ryan, 253 F.3d at 780). “Instead, the Court must ‘determine whether the well-pleaded allegations in [the][] complaint support the relief sought in [the][] action.” Id. (citation omitted).

         13. “If the court finds that liability is established, it must then turn to the determination of damages.” Entrepreneur Media, Inc. v. JMD Entm't Grp., LLC, 958 F.Supp.2d 588, 593 (D. Md. 2013) (citing Ryan, 253 F.3d at 780-81). “The court must make an independent determination regarding damages and cannot accept as true factual allegations of damages.” Id. (citing S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 422 (D. Md. 2005)). “Rule 54(c) of the Federal Rules of Civil Procedure limits the type and amount of damages that may be entered as a result of a party's ...


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