The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
Board of Education of the Springfield : Case No. 3:17-cv-00330
City School District, :
: District Judge Thomas M. Rose
Plaintiff, : Magistrate Judge Sharon L. Ovington
:
vs.
:
:
HBH Technology, Inc., et al.,
:
Defendants. :
REPORT AND RECOMMENDATIONS1
This diversity-jurisdiction case is before the Court upon Plaintiff Board of
Education of the Springfield City School District’s Motion for Default Judgment Against
Defendant HBH Technology, Inc., fka Computer Automation Systems, Inc. (Doc. #34),
Defendant TTCO Holding Company Inc.’s Memorandum in Opposition (Doc. #38), and
Plaintiff’s Reply (Doc. #40).
To their credit, the parties agree that entry of default is warranted against
Defendant HBH Technology, Inc. under Fed. R. Civ. P. 55(a). This is correct because
Defendant HBH has not participated in this litigation since its counsel was permitted to
withdraw in early November 2018 and because Defendant HBH has not obtained counsel
to represent it in this case despite having been ordered to do so by the Court on two
occasions. And for more than a year, Defendant HBH has not responded to Plaintiff’s
1 Attached is a NOTICE to the parties regarding objections to this Report and Recommendations.
written discovery requests and has not contacted Plaintiff’s counsel to discuss discovery.
Plaintiff’s counsel has submitted an affidavit verifying these facts. See Doc. #34, PageID
#s 271-72. Most recently, in January 2020, no counsel appeared on its behalf during a
phone conference with U.S. Magistrate Judge Michael R. Newman concerning
settlement. In this situation, entry of default against Defendant HBS is warranted. See
Fed. R. Civ. P. 55(a) (“When a party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party’s default.); cf. Renewable Energy Equipment
Leasing, LLC v. Team Gemini, LLC, 2:14cv2687, 2017 WL 3475687, at *2 (S.D. Ohio
2017) (Watson, DJ) (“While there is no specific Federal Rule or statute that provides for
entry of a default judgment against a party who disobeys judicial orders, the Court may
do so pursuant to its broad inherent authority to protect the integrity of the judicial
process and guard against abuses.”)
Defendant TTCO Holding Company, Inc. contends that entering default judgment
against Defendant HBH would be premature because an issue remains whether
Defendant TTCO is Defendant HBH’s successor in interest with respect to all claims
Plaintiff raises in its Complaint. Defendant TTCO points out that it has actively defended
against Plaintiff’s claims, including by filing a presently pending motion for summary.
Defendant TTCO is correct: Entering a default judgment is premature at the moment
when the issue of whether Defendant TTCO is a successor in interest to Defendant HBH
remains unresolved. See Scalia v. MICA Contracting, LLC, 1:18cv00590, 2019 WL
6270930, at *2 (S.D. Ohio 2019) (Litkovitz, MJ) (and cases cited therein), Report &
Recommendation adopted, 2020 WL 33121, at *1 (S.D. Ohio 2020) (Dlott, DJ).
Plaintiff does not oppose this conclusion. Plaintiff reassures that it is not
attempting to prejudice Defendant TTCO’s ability to litigate the successor-in-interest
issue. “Plaintiff School District is requesting that the default against Defendant HBH be
reduced to a money judgment after its claims against Defendant TTCO have been fully
resolved (on summary judgment or at trial) so that the Court can properly apportion
liability, if appropriate, between Defendants HBH and TTCO.” (Doc. #40, PageID #685)
(emphasis in original). This approach, however, jumps the gun by requiring the Court to
fix in place a default judgment against Defendant HBH. “Following the Clerk’s entry of
default and the plaintiff’s motion for default judgment, the Court must still consider
whether a default judgment is proper.” MICA Contracting, 2019 WL 6270930, at *2. It
may or may not be proper against Defendant HBH depending on the facts that emerge at
summary judgment or trial, including facts related to the successor-in-interest issue.
“[T]he proper course of action is to keep the entry of default against defendant [HBC] in
place, but to delay judgment until the claims against defendant TTCO … have been
resolved.” Id.
IT IS THEREFORE RECOMMENDED THAT:
1. Plaintiff Board of Education of the Springfield City School District’s
Motion for Default Judgment Against Defendant HBH Technology, Inc.,
fka Computer Automation Systems, Inc. (Doc. #34) be GRANTED, in
part, and the Clerk of Court be directed to docket an entry of default
against Defendant HBC Technologies pursuant to Fed. R. Civ. P. 55(a); and
2. Plaintiff Board of Education of the Springfield City School District’s
Motion for Default Judgment Against Defendant HBH Technology, Inc.,
fka Computer Automation Systems, Inc. (Doc. #34) be DENIED without
prejudice to renewal after the successor-in-interest issue is resolved at
summary judgment or trial.
April 23, 2020 s/Sharon L. Ovington
Sharon L. Ovington
United States Magistrate Judge
NOTICE REGARDING OBJECTIONS
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written
objections to the proposed findings and recommendations within FOURTEEN days after
being served with this Report and Recommendations. Such objections shall specify the
portions of the Report objected to and shall be accompanied by a memorandum of law in
support of the objections. If the Report and Recommendation is based in whole or in part
upon matters occurring of record at an oral hearing, the objecting party shall promptly
arrange for the transcription of the record, or such portions of it as all parties may agree
upon or the Magistrate Judge deems sufficient, unless the assigned District Judge
otherwise directs. A party may respond to another party’s objections within
FOURTEEN days after being served with a copy thereof.
Failure to make objections in accordance with this procedure may forfeit rights on
appeal. See Thomas v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947,
949-50 (6th Cir. 1981).