holding that when a plaintiff “makes a joint charge against several defendants, and one of them makes default,” the court should “proceed with the cause upon the answers of the other defendants”
How later courts described this case
- holding that when a plaintiff “makes a joint charge against several defendants, and one of them makes default,” the court should “proceed with the cause upon the answers of the other defendants”
- “[D]efault judgments entered against the defendants are subject to alteration by the lower court until it disposes of all the claims against all of the parties.”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
STATE NATIONAL INSURANCE
COMPANY, INC.,
Plaintiff,
v. Case No. 2:24-cv-1424-HDM
DAMON TREADWELL, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Before the court is a Motion for Entry of Final Judgment by Plaintiff State
National Insurance Company (“State National”). (Doc. 64). For the reasons
explained below, the motion is due to be DENIED.
This declaratory-judgment action was brought by State National against
Defendants Rodreecas Brown, BCR Development, LLC (“BCR”), Damon
Treadwell, and Catherine Treadwell. (See Doc. 1). It concerns whether State
National has a duty to defend or indemnify its insureds—Brown and BCR—in
connection with the Treadwells’ underlying state-court lawsuit arising from the
construction of the Treadwells’ residence. See id. This court previously entered
default judgments against BCR and Brown after those defendants failed to answer
or otherwise defend against State National’s complaint. (Docs. 59, 63). State
National now argues that those default judgments resolve all issues in this action and
requests entry of a final judgment closing the case. (See Doc. 64). The court
disagrees.
Although default judgment has been entered against Brown and BCR,
Defendants Damon and Catherine Treadwell have appeared and continue to contest
State National’s claim that the insurance policy affords no coverage. (See, e.g., Doc.
37 (Answer to Complaint)). A default judgment admits only the well-pleaded factual
allegations of the complaint against the defaulting party; it does not establish those
facts against non-defaulting defendants. See Frow v. De La Vega, 82 U.S. 552, 554
(1872) (holding that when a plaintiff “makes a joint charge against several
defendants, and one of them makes default,” the court should “proceed with the
cause upon the answers of the other defendants”). Thus, the default judgments
against Brown and BCR cannot operate to adjudicate the rights of the Treadwells,
who are actively defending this case.
Nevertheless, when multiple defendants are involved in an action and their
potential liability turns on common issues, courts must avoid entering judgments
that could produce logically inconsistent outcomes. Frow, 82 U.S. at 554. In Frow
v. De La Vega, the Supreme Court held that a court should not enter judgment against
a defaulting defendant where doing so could result in inconsistent adjudications as
to similarly situated non-defaulting defendants. Id. Courts in the Eleventh Circuit
have repeatedly applied this principle, explaining that courts should not enter a
judgment where doing so could create “logically inconsistent judgments” among
defendants. See, e.g., U.S. Commodity Futures Trading Comm’n v. Montano, No.
6:18-cv-1607-ORL-31GJK, 2019 WL 11648519, at *3 (M.D. Fla. July 15, 2019)
(citing Frow, 82 U.S. at 554).
The risk of inconsistency is present here. The central issue in this action—
whether the State National policy provides coverage for the claims asserted in the
underlying litigation—remains actively disputed between State National and the
Treadwells. (See Doc. 66 (arguing against a grant of final judgment in favor of State
National)). Entering final judgment based solely on the defaults of Brown and BCR
would effectively determine the coverage issue without affording the Treadwells an
opportunity to litigate the matter on the merits and could create conflicting
determinations if the court were later to conclude that coverage exists with respect
to the Treadwells’ claims. Accordingly, entry of final judgment at this stage would
be improper.
The court’s prior default judgments adjudicate fewer than all of the rights and
liabilities of the parties and therefore remain interlocutory orders. Under Federal
Rule of Civil Procedure 54(b), such orders “may be revised at any time” before entry
of a final judgment resolving all claims as to all parties. Fed. R. Civ. P. 54(b); see
also Bache & Co. v. Taylor, 458 F.2d 395, 395-96 (Sth Cir. 1972) (“[D]efault
judgments entered against the defendants are subject to alteration by the lower court
until it disposes of all the claims against all of the parties.”); Roche Diagnostics
Corp. v. Priority Healthcare Corp., No. 2:18-cv-01479, 2021 WL 289597, at *2
(N.D. Ala. Jan. 28, 2021) (“A default judgment that does not dispose of all of the
claims among all parties is not a final judgment unless the court directs entry of final
judgment under Rule 54(b). Until final judgment is entered, Rule 54(b) allows
revision of the default judgment at any time. The demanding standards set by Rule
60(b) apply only in seeking relief from a final judgment.”) (quoting Fed. R. Civ. P.
55(c) advisory committee’s note). Consistent with Rule 54(b), the court retains the
authority to revisit the default judgments entered against Brown and BCR if
necessary to prevent inconsistent results once the coverage dispute between State
National and the Treadwells is resolved on the merits.
For these reasons, State National’s Motion for Entry of Final Judgment, (doc.
64), is DENIED.
DONE and ORDERED on March 13, 2026.
(AOA
UNITED STATES DISTRICT JUDGE