4:22-cv-00718
E.D. Ark.Nov 14, 2022Background
- Welspun Tubular LLC, Welspun Pipes, Inc., and Welspun Global Trade LLC sued Phenix Energy Group, Inc. and Gerald J. Leroux for breach of contract arising from the defendants' failure to refund a $250,000 deposit.
- Plaintiffs sent a written demand for the refund on February 2, 2022; defendants were served with the complaint but did not timely respond.
- The Clerk entered default on September 21, 2022 under Fed. R. Civ. P. 55(a); plaintiffs moved for default judgment.
- Approximately 70 days after service and after the motion, defendants filed a late "statement of defense" signed by Leroux (a non-lawyer); the court struck that filing because a corporation cannot appear pro se and no excusable neglect was shown.
- Treating the complaint's allegations as true, the court entered default judgment for breach of contract: principal $250,000 plus prejudgment interest $118,520.73 (total $368,520.73).
- The court awarded post-judgment interest at 4.74% per annum and attorneys' fees and costs totaling $9,352.50 (including $620 in costs), finding fees reasonable and recoverable under Arkansas law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment is appropriate for failure to respond | Plaintiffs: default is proper; allegations admitted; seek judgment | Defendants: (no timely opposition); late filing attempted but not timely | Court: default judgment appropriate; allegations taken as true |
| Whether corporate defendant may appear pro se | Plaintiffs: corporate entity must be represented by counsel | Defendants: Leroux filed pro se statement of defense | Court: corporate defendant cannot appear without counsel; pro se filing stricken |
| Whether late filing excused / good cause shown | Plaintiffs: no excuse, so default should stand | Defendants: offered no excusable neglect or good cause in late filing | Court: no good cause shown; late pleading stricken |
| Damages and fee recovery: amount and entitlement | Plaintiffs: seek $250,000 refund, prejudgment interest, attorneys' fees, costs, pre/post-judgment interest | Defendants: did not meaningfully contest amounts | Court: awarded $368,520.73 (principal + prejudgment interest), post-judgment interest at 4.74%, and attorneys' fees and costs $9,352.50 |
Key Cases Cited
- Angelo Iafrate Constr., LLC v. Potashnick Constr., Inc., 370 F.3d 715 (8th Cir. 2004) (default judgment binds the defaulting party and its allegations are deemed admitted)
- Taylor v. City of Ballwin, Mo., 859 F.2d 1330 (8th Cir. 1988) (discussing consequences of entry of default)
- Brown v. Kenron Aluminum & Glass Corp., 477 F.2d 526 (8th Cir. 1973) (when default entered, allegations except damages are taken as true)
- United States v. Lylalele, Inc., 221 F.3d 1345 (8th Cir. 2000) (corporations cannot appear in federal court without counsel)
- United States v. Van Stelton, 988 F.2d 70 (8th Cir. 1993) (same principle regarding corporate pro se appearances)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (standard for awarding reasonable attorneys' fees)