Fu v. Ling
3:18-cv-02066
| N.D. Tex. | Jan 23, 2020Background
- Plaintiff Jyue Hwa Fu sues Yeh Chin Chin, David Ling, and Ling’s Holdings, LLC alleging a $100,000 fraudulent real‑estate investment scheme.
- Fu filed an amended complaint adding Ling’s Holdings; Ling answered the original complaint but not the amended complaint; Chin has not been properly served.
- The Clerk entered default against David Ling and Ling’s Holdings; Fu moved for default judgment and alternatively moved for substituted service and severance of Chin.
- Magistrate Judge Horan found disputed material facts and Ling had previously answered, so a default judgment would be harsh without a final opportunity to appear.
- The magistrate recommended staying Fu’s motion for default judgment 45 days (to March 9, 2020), denying substituted service without prejudice for inadequate affidavit, denying severance, and noting Fu’s voluntary dismissal of Chin without prejudice.
- The court cautioned Ling to respond to the amended complaint and discovery and advised Ling’s Holdings to retain counsel; trial was to be reset pending resolution of the default motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to enter default judgment against Ling and Ling’s Holdings | Default established by failure to answer/amend; request entry of default judgment and damages | Ling previously answered original complaint; material facts disputed; neglect may be excusable | Court stayed default‑judgment motion 45 days to allow final opportunity to appear; cautioned Ling and LLC to respond |
| Whether substituted service on Chin should be authorized under Texas Rule 106(b) | Service attempts were made; Chin reportedly in Taiwan; email/contact via Ling make substituted service effective | (No appearance) Court found supporting affidavit insufficient to show Chin’s usual abode or repeated attempts or that proposed method would provide notice | Denied without prejudice for failure to strictly comply with Rule 106(b) affidavit/adequacy requirements |
| Whether to sever Chin’s claims to pursue default against other defendants | Severance would allow Fu to obtain default judgment against Ling/Ling’s Holdings more easily | Joinder arises from same transaction; severance not necessary and may not avoid prejudice | Denied; court instead accepted Fu’s voluntary dismissal of Chin without prejudice under Rule 41(a)(1)(A)(i) |
| Whether defendants must retain counsel/respond and consequence of noncompliance | Fu seeks prompt resolution and judgment; requests court action | Ling cites efforts to seek counsel and medical issues; LLC needs counsel to appear | Court ordered Ling to answer amended complaint and discovery; ordered LLC to retain counsel; warned failure to defend may lead to default judgment |
Key Cases Cited
- New York Life Ins. Co. v. Brown, 84 F.3d 137 (1996) (steps for obtaining default judgment in Fifth Circuit)
- Lindsey v. Prive Corp., 161 F.3d 886 (1998) (factors to consider before entering default judgment)
- Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490 (2015) (default‑judgment effect and reliance on well‑pleaded allegations)
- Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515 F.2d 1200 (1975) (well‑pleaded allegations deemed admitted on default)
- Wilson v. Dunn, 800 S.W.2d 833 (Tex. 1990) (strict compliance with affidavit requirement for substituted service)
- State Farm Fire & Cas. Co. v. Costley, 868 S.W.2d 298 (1993) (limits on substituted service under Texas Rule 106)
- Welsh v. Correct Care, L.L.C., 915 F.3d 341 (2019) (voluntary dismissal under Rule 41(a)(1)(A)(i))
- In re Rolls Royce Corp., 775 F.3d 671 (2014) (factors relevant to severance under Rule 21)
- Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (1996) (procedural consequence for failing to file specific objections to magistrate judge's recommendations)