Patricia Ammerman and Harris S. Ammerman v. David Lloyd Fisher, et al.

Summary

The United States District Court for the District of Utah overruled the plaintiffs’ objections and adopted a magistrate judge’s report and recommendation denying their motion for default judgment. The court concluded that entering judgment against defaulting defendants before adjudicating claims against non-defaulting defendants could create inconsistent liability determinations and damages awards. The court also found that a non-defaulting defendant’s defense concerning the alleged fraudulent scheme could apply equally to the defaulting defendants.

Holdings

1. A court should generally refrain from entering default judgment against one of several defendants alleged to be jointly or jointly and severally liable until the claims against all defendants have been adjudicated or all defendants have defaulted, when entering judgment would risk inconsistent liability determinations or damages awards.
2. Default judgment may properly be withheld when a nondefaulting defendant raises a defense closely related to the liability of the defaulting defendants, because a later adjudication of that defense could make a default judgment factually inconsistent or preclude recovery against the defaulting defendants.
3. The motion for default judgment was denied as premature.

Questions Presented

1. Whether the district court should enter default judgment against some defendants while claims arising from the same alleged scheme remained pending against nondefaulting defendants.
2. Whether the risk of inconsistent liability determinations and damages awards warranted denying default judgment under Federal Rule of Civil Procedure 55(b)(2).
3. Whether the claims against David Lloyd Fisher, including professional-duty claims, could be resolved by default judgment notwithstanding their connection to the same alleged fraudulent scheme.

Disposition

other