Opinion
No. 2:03-CV-411 PS.
April 22, 2004
ORDER
This matter is before the Court on Plaintiff's Application for Default Judgment [Doc. 6] pursuant to Fed.R.Civ.Pro. 55(b)(2). Defendant Baum has failed to appear, answer, or otherwise plead in this action. Because the grounds for default are clearly established, and the amount of damages are definite, Plaintiff's Application for Default Judgment is GRANTED.
This suit involves unpaid federal income tax assessments that were made against John H. Baum and Marleen M. Baum, jointly and severally for the years 1989 through 1998. ( See generally Compl.) On September 27, 2001, Marleen M. Baum filed a Chapter 7 bankruptcy petition with the U.S. Bankruptcy Court for the Northern District of Indiana, Hammond Division. By order dated February 11, 2002, Marleen Baum was granted discharge under 11 U.S.C. § 727. As a result, the United States is seeking judgment against John H. Baum, solely. ( Id. ¶ 5.)
Delegates of the Secretary of the Treasury made assessments against John Baum and Marleen Baum for income tax, penalties, and interest on the following dates, for the years, and in the amounts set forth:
Date Year Amount
September 27, 1993 1991 $14,377.35 December 20, 1993 1990 $36,679.41 March 30, 1994 1992 $8,672.91 May 30, 1994 1993 $15,201.07 November 27, 1995 1994 $56,296.73 February 3, 1997 1995 $42,237.73 June 22, 1998 1996 $29,972.18 August 10, 1998 1997 $32,079.18 May 24, 1999 1998 $47,410.90 September 11, 2000 1989 $26,433.79 October 16, 2000 1991 $52,098.65
(Compl. ¶ 3.)
Notice of the assessments, and demand for their payment were sent to John and Marleen Baum on or within five days of the date of the assessments. (Compl. ¶ 4.) Despite notice and demand, the Baums have not fully paid the assessments, interest and other statutory additions that have accrued. The United States seeks to recover the sum of $411,619.56, plus interest and other statutory additions accruing from and after January 17, 2003.
John Baum was personally served with a summons and a copy of the complaint on October 14, 2003. [Doc. 3]. The United States applied for Entry of Default on January 14, 2004, and the Clerk entered Default as to John Baum on January 26, 2004. [Docs. 5 and 8]. On January 14, 2004, the United Stated filed its Application for Default Judgment.
Although Federal Rule of Civil Procedure 55(b) gives the Court the power to enter default judgment in this situation, the Court must exercise sound judicial discretion in doing so. See Dundee Cement Co. v. Howard Pipe Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983). The Court may consider a number of factors when deciding a motion for default judgment. These factors include the amount of money potentially involved, whether material issues of fact or issues of substantial public importance are at issue, whether the default is largely technical, whether plaintiff has been substantially prejudiced by the delay involved, and whether the grounds for default are clearly established or are in doubt. 10A Wright, Miller Kane, Federal Practice and Procedure § 2685 (3d ed. 1998).
Here, no material issues of fact are at issue and the grounds for default are clearly established. In addition, the default goes beyond a mere technicality, as the Defendant has still not filed any responsive pleading in more than six months. Defendant was served with the summons and complaint on October 14, 2003, and the clerk entered default on January 26, 2004. [Doc. 8]. Defendant cannot be allowed to completely ignore this suit. "A trial court is entitled to say, under proper circumstances, that enough is enough." In re Pyramid Energy, Ltd. v. Heyl Patterson, Inc., 869 F.2d 1058, 1062 (7th Cir. 1989). Here, the Court finds that the weighing of factors comes out strongly in favor of the Plaintiff, and default judgment for the Plaintiff is appropriate.
Normally, after granting a motion for default judgment, a court must have a hearing to determine damages. See Pope v. United States, 323 U.S. 1 (1944); Dundee Cement Co., 722 F.2d at 1323. In cases where damages are capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits, however, such a hearing is unnecessary. Dundee Cement Co., 722 F.2d at 1323. In this case, the Court has the necessary information to calculate damages and no hearing is necessary. The Plaintiff has attached the declaration of Louie M. Leach, Jr. to establish the amount of damages owed by the Defendant. The Declaration is detailed and the amount of damages are certain.
Louie Leach, Jr. is employed by the Internal Revenue Service ("IRS") as an Advisor with the Technical Services unit in Indianapolis, Indiana. He reviewed the records of the IRS as they relate to Baum, and provided computation of his outstanding federal tax liabilities, including interest, penalties, and statutory additions, as of January 17, 2003. Leach declares that there remains due and owing to the United States the sum of $411,619.56, plus interest and other statutory additions accruing from and after January 17, 2003.
Accordingly, because the damages are certain and are ascertainable from the Declaration supplied by the United States we see no reason to hold a hearing in this matter.
CONCLUSION
For the foregoing reasons, Plaintiff's Application for Default Judgment [Doc. 6] is GRANTED. It is hereby ORDERED AND ADJUDGED that judgment for unpaid federal income taxes for the years 1989 through 1998 is hereby entered in favor of the United States of America and against the Defendant John H. Baum, in the amount of $411,619.56, plus interest and other statutory additions accruing from and after January 17, 2003. The Clerk is directed to enter FINAL JUDGMENT stating that Plaintiff is entitled to the relief ordered herein. The Clerk is further directed to treat this matter as TERMINATED.