United States District Court, E.D. Pennsylvania
Williams-Lester sued Vision Financial Corporation
("VFC") for contacting her to collect an alleged
consumer debt in violation of the Fair Debt Collection
Practices Act ("FDCPA"). VFC answered the Complaint
through counsel, but the Court subsequently granted a motion
by VFC's counsel to withdraw. Despite two orders of the
Court, VFC has not appointed new counsel. The Clerk of Court
entered VFC's default, and Williams-Lester moved for
default judgment. Because Williams-Lester has made out claims
for four violations of the FDCPA and because default judgment
is proper, the Court will grant the motion and enter judgment
against VFC in the amount of $4, 595.50.
complaint, Williams-Lester alleged that debt collection
company VFC contacted her repeatedly to collect a consumer
debt that she owed to Comenity Bank. (Compl. ¶¶ 5,
8-9, 12-14, ECF No. 1.) Between December 2014 and April 2015,
VFC called her home and cellular phones two to three times
per day, on average. (Id. ¶¶ 15-16.) She
received some calls before 8:00 a.m. and after 9:00 p.m.
(Id. ¶¶ 17-18.) VFC continued to call her
home and cell phones even after she told the company to only
contact her by mail. (Id. ¶¶ 19-21.) VFC
threatened legal action when she did not pay the debt, and
Williams-Lester claimed that VFC's failure to actually
take legal action indicated that this threat was made solely
to force her to make payment. (Id. ¶¶
22-23.) Finally, she alleged that VFC failed to send her
written notification, "within five days of its initial
communication with her, of her rights to dispute the debt
and/or to request verification of the debt, as well as the
name of the original creditor and the amount of the
debt." (Id. ¶ 24.) Williams-Lester claimed
that VFC's actions were "taken with the intent to
annoy and harass" her. (M¶ 25.)
sued VFC on December 17, 2015, alleging five violations of
the FDCPA, 15 U.S.C. §§ 1692-1692p. Through
counsel, VFC filed its answer one day late, admitting that
part of its business is debt collection, and that when it
operates as a debt collector as defined by the FDCPA,
"certain of its activities may be regulated by the
FDCPA." (Answer ¶¶9-10, ECF No. 4.) VFC also
admitted that it was retained to collect a debt that
Williams-Lester owed to Comenity Bank, and that it contacted
Williams-Lester between March and May 2015. (Id.
¶¶ 12-13, 15.)
months before the scheduled arbitration hearing, counsel for
VFC filed a motion to withdraw as attorney, which the Court
granted. The Court postponed the scheduled arbitration
hearing and ordered VFC to retain new counsel by July 30,
2016. Arbitration was rescheduled for October 4,
2016, but VFC never retained new counsel or otherwise
responded to the Court's Order. On September 8, 2016, the
Court ordered VFC to show cause as to why it had not complied
with the Court's Order and warned that failure to appoint
counsel could result in sanctions. VFC never responded. The
Court cancelled the arbitration hearing, and the Clerk of
Court entered default on October 12, 2016. Williams-Lester
filed for default judgment two months later.
VFC is not represented by counsel, the Clerk of Court mailed
paper copies of the order to show cause, the notice canceling
the arbitration hearing, and the order entering default to
VFC's mailing address, 11960 Westline Industrial Drive,
Suite 330, Maryland Heights, Missouri, 63146. The copies have
been returned by the U.S. Postal Service as
undeliverable. Williams-Lester certified that she served
a copy of the motion for default judgment on VFC at the same
address. (Mot. Default J., ECF No. 18.)
STANDARD OF REVIEW
Rule of Civil Procedure 55 sets out a two-step process for
obtaining a default judgment. First, when a party has
"failed to plead or otherwise defend" an action,
the Clerk of Court must enter the party's default.
Fed.R.Civ.P. 55(a). Failure to "otherwise defend"
includes failure to comply with a Court order to "obtain
substitute counsel." Hoxworth v. Blinder, Robinson
& Co., 980 F.2d 912, 918 (3d Cir. 1992). Second,
upon application by the party not in default, a district
court may enter default judgment. Fed.R.Civ.P. 55(b)(2). If
the party in default "has appeared personally or by a
representative, that party or its representative must be
served with written notice of the application at least 7 days
before the hearing." Id. The court "has
discretion to determine whether a hearing is necessary"
prior to entry of default judgment. 10A Charles Alan Wright,
Arthur R. Miller, et al, Federal Practice and
Procedure § 2688 (4th ed. Supp. 2016). The entry of
default judgment is likewise left primarily to the discretion
of the Court. Hritz v. Woma Corp., 732 F.2d 1178,
1180 (3d Cir. 1984).
entering default judgment, the court must make two
determinations. First, the Court must determine that the
facts set forth in the complaint establish a legitimate cause
of action, because a party in default does not admit mere
conclusions of law. Carroll v. Stettler, Civ. A. No.
10-2262, 2012 WL 3279213, at *2 (E.D. Pa. Aug. 10, 2012);
Bricklayers & Allied Craftworkers Local 1 v.
WaterControl Servs., Inc., Civ. A. No. 09-3935, 2012 WL
3104437, at *3 (E.D. Pa. July 30, 2012). Second, the Court
must determine that default judgment is proper. When a
defendant in default has initially filed an answer or
responsive pleading, default judgment functions as a
sanction. Comdyne I, Inc. v. Corbin, 908 F.2d 1142,
1148 (3d Cir. 1990); Jimenez v. Rosenbaum-Cunningham,
Inc., Civ. A. No. 07-1066, 2010 WL 1303449, at *3 (E.D.
Pa. Mar. 31, 2010). Before entering default judgment as a
sanction, the district court must consider the
Poulis factors (see infra Part III.B).
Knoll v. City of Allentown, 707 F.3d 406, 409 (3d
Cir. 2013) (citing Poulis v. State Farm Fire and Casualty
Co., 747 F.2d 863, 868 (3d Cir. 1984)); Comdyne I,
Inc., 908 F.2d at 1148. A court can enter default
judgment even if it lacks sufficient information to evaluate
a factor or if not all factors favor the entry of default
judgment. Jimenez, 2010 WL 1303449, at *3.
Clerk of Court properly entered VFC's default because VFC
failed to comply with the Court's order to retain new
counsel. Mendelsohn, Drucker, & Assocs., P.C. v.
Titan Atlas Mfg., Inc., Civ. A. No. 12-0453, 2013 WL
1842124, at *5 (E.D. Pa. May 2, 2013) ("Because a
corporation cannot represent itself pro se in federal court,
a corporate defendant's failure to retain counsel after
being ordered to do so is a failure to 'otherwise
defend' under Rule 55 that justifies a default."
(internal citation omitted)). Williams-Lester properly
notified VFC of its motion for default judgment, Fed.R.Civ.P.
55(b)(2), and more than a month has passed without a