Opinion
1:24-CV-00322-DII-DH
07-17-2024
ROBERT S. DALLEY, Plaintiff v. RANDOLPH BROOKS FEDERAL CREDIT UNION, Defendant
ORDER AND REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
DUSTIN M. HOWELL UNITED STATES MAGISTRATE JUDGE
Before the Court is Plaintiff Robert S. Dalley's complaint, Dkt. 1, and Application to Proceed In Forma Pauperis, Dkt. 2. The District Court referred the above motions to the undersigned Magistrate Judge for a determination pursuant to 28 U.S.C. § 636(b) and Rule 1(c) of Appendix C of the Local Rules.
I. APPLICATION TO PROCEED IN FORMA PAUPERIS
After reviewing Dalley 's Application to Proceed In Forma Pauperis, the Court finds that he is indigent. Accordingly, the Court HEREBY GRANTS Dalley in forma pauperis status and ORDERS his Complaint be filed without pre-payment of fees or costs or giving security therefor pursuant to 28 U.S.C. § 1915(a)(1). This indigent status is granted subject to a later determination that the action should be dismissed if the allegation of poverty is untrue or the action is found frivolous or malicious pursuant to 28 U.S.C. § 1915(e). Dalley is further advised that although he has been granted leave to proceed in forma pauperis, the Court may, in its discretion, impose costs of court at the conclusion of this lawsuit, as in other cases. Moore v. McDonald, 30 F.3d 616, 621 (5th Cir. 1994). However, service upon Defendant should be withheld pending this Court's review under § 1915(e).
Because Dalley has been granted leave to proceed in forma pauperis, the Court is required by standing order to review his Complaint under § 1915(e)(2) which provides in relevant part that “the court shall dismiss the case at any time if the court determines that . . . the action or appeal (i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2). “A complaint filed IFP may be dismissed as frivolous if it lacks an arguable basis in law or fact,” Allison v. Kyle, 66 F.3d 71, 73 (5th Cir. 1995), and the claims “are of little or no weight, value, or importance, not worthy of serious consideration or trivial.” Deutsch v. United States, 67 F.3d 1080, 1083 (3d Cir. 1995).
II. REVIEW OF THE MERITS OF THE CLAIMS
Dalley sues Randolph Brooks Federal Credit Union (“RBFCU”) for alleged violations of federal laws and breach of contract related to a home equity loan. Dkt. 1, at 1. However, Dalley has filed a “Petition for Default Judgment.” Id. Rule 55 of the Federal Rules of Civil Procedure sets forth the conditions under which default may be entered against a party, as well as the procedure to seek the entry of default judgment. There is a three-step process for securing a default judgment. See N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). First a default occurs when a party “has failed to plead or otherwise defend” against an action. Fed.R.Civ.P. 55(a). A party must be properly served with process to be subject to a default judgment and the plaintiff bears the burden of demonstrating proper service when moving for default. Broadcast Music, Inc. v. M.T.S. Enterprises, Inc., 811 F.2d 278, 282 (5th Cir. 1987); RooR Int'l BV v. A1 Smoke Shop Inc., No. 4:18-CV-3828, 2019 WL 6330543, at *2 (S.D. Tex. Oct. 18, 2019). Next, an entry of default must be entered by the clerk when the default is established “by affidavit or otherwise.” N.Y. Life Ins., 84 F.3d at 141. Third, a party may apply to the clerk or the court for a default judgment after an entry of default. Fed.R.Civ.P. 55(b); N.Y. Life Ins., 84 F.3d at 141.
Here, because Dalley has not filed a complaint and RBFCU has not been served, RBFCU has not failed to defend. Accordingly, there is no basis for the Clerk of the Court to enter a default under Rule 55(a), even if Dalley had requested entry of default, which he did not.Without a prior entry of default, a party has no basis to seek a default judgment. Moreover, “a party is not entitled to a default judgment as a matter of right, even where the defendant is technically in default.” Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996) (per curiam)). “In fact, ‘[d]efault judgments are a drastic remedy, not favored by the Federal Rules and resorted to by courts only in extreme situations.'” Lewis, 236 F.3d at 767 (quoting Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989)). Based on the forgoing, the undersigned recommends Dalley's “Petition for Default Judgment,” Dkt. 1, be denied.
Dalley states that in trying to notify RBFCU of its alleged wrongful actions he “discovered that an independent third party who was sworn as a clerk of the court could compel the defendant to respond since the Plaintiff had not succeeded in receiving a proper reply.” Dkt. 1, at 10. He then “enlisted a Notary Public to commence the Notary Certificate of Dishonor Process or the Notary Public Protest, which resulted in a dishonorable, non-response default being entered against the Defendant.” Id. However, he offers no authority as to why this Court's disposition of his petition would be governed by alleged entry of default by a Notary Public, nor how a Notary Public might qualify as a clerk of this Court.
III. ORDER AND RECOMMENDATION
In accordance with the foregoing discussion, the Court HEREBY GRANTS Dalley in forma pauperis status. Service upon Defendant should be withheld pending the Court's review under 28 U.S.C. § 1915. The undersigned RECCOMENDS Dalley's Petition for Default Judgment, Dkt. 1, be DENIED. Referral of this case should be CANCELED.