Opinion

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

REGINALD JOHNSON, ET AL. CIVIL ACTION

VERSUS NO. 25-548

CBA HOMEBUILDERS, LLC, ET AL. SECTION: “G”(5)

ORDER AND REASONS

In this litigation, Plaintiffs Reginald Johnson and Anyiesa Johnson (collectively,

“Plaintiffs”) bring a claim for breach of contract against Defendants CBA Home Builders, Inc. and

Lionel Nelson (collectively, “Defendants”).1 Before the Court is Plaintiffs Reginald Johnson and

Anyiesa Johnson’s (“Plaintiffs”) Motion for Default Judgment.2 On January 23, 2026, the Court

denied Plaintiff’s first Motion for Default Judgment without prejudice.3 Plaintiffs have now filed

a renewed Motion for Default Judgment against CBA Home Builders, Inc. and Lionel Nelson.4

Having reviewed the motion, the memorandum in support, the record, and the applicable law, the

Court will grant in part, as to CBA Home Builders, and deny the motion in part as to Lionel Nelson.

The request for attorneys’ fees is deferred pending further briefing on that issue.

1 Rec. Doc. 23. Plaintiffs originally named Dramatic Homes and Kewa Short as additional defendants.

However, Plaintiffs voluntarily dismissed those claims on April 2, 2026. Rec. Doc. 28. Plaintiffs also originally named

CBA Homebuilders, LLC. On January 2, 2026, Plaintiffs amended the Complaint to correct the entity’s name to CBA

Home Builders, Inc. Rec. Doc. 23.

2 Rec. Doc. 31.

3 Rec. Doc. 25.

4 Rec. Doc. 31.

I. Background

A. Factual Background

On March 1, 2024, Plaintiffs entered into a building agreement with Defendant CBA Home

Builders, Inc. for the construction of a residence.5 The total cost to build the residence was

$650,000.6 On June 8, 2024, Plaintiffs executed a change order to remove and replace buried

foundation at the residence, subsequently increasing the contractual price by $7,900 and extending

the date of completion of the residence.7 On June 12, 2024, Plaintiffs executed a second change

order to add an elevator to the residence, extending the date of completion to February 15, 2025.8

According to the Amended Complaint, Plaintiffs paid an additional $34,000 to purchase the

elevator, to have the elevator reframed, installed and completed.9 The Amended Complaint states

Defendants failed to provide regular updates regarding the progress of the residence, and refrained

from working for months at a time on the construction of the residence.10

On December 9, 2024, Plaintiffs entered a third change order, paying an additional $8,900

to purchase and install a generator.11 On February 4, 2025, Plaintiffs contend Defendants failed to

5 Rec. Doc. 23 at 2.

6 Rec. Doc. 1-1.

7 Rec. Doc. 23 at 3.

8 Id.

9 Id.

10 Id.

11 Id.

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respond to an inquiry regarding an update on status of construction of residence.12 The Amended

Complaint alleges that Plaintiffs and Defendant Lionel Nelson (“Nelson”) agreed to meet at the

residence on February 10, 2025, but Nelson failed to appear or respond to several calls and texts

from Plaintiffs.13 The Amended Complaint explains that Nelson responded to Plaintiffs’ inquiries

regarding construction of the residence two days later, stating that his failure to respond and

absence was due to his incarceration.14 Plaintiffs allege Nelson informed them that the

incarceration stemmed from a traffic stop due to suspension of license for failure to pay state

income taxes.15 During the period that Nelson was unresponsive, Plaintiffs allege they discovered

that the windows were not installed because Nelson failed to purchase the windows.16 Plaintiffs

further contend that Nelson’s deposit check bounced, and Nelson failed to return phone calls from

the window vendor.17 Plaintiffs allege Nelson falsely stated the floor tile was being ordered for

construction of the residence.18 According to the Complaint, Plaintiffs personally purchased

windows and tile to be installed because Nelson did not pay for the materials.19

On February 6, 2025, Plaintiffs inquired about an updated timeline and status regarding the

remaining work to be completed at the residence, including copies of paid invoices for the elevator

12 Id.

13 Id.

14 Id.

15 Id. at 4.

16 Id.

17 Id.

18 Id.

19 Id.

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and generator.20 Plaintiffs contend Defendants failed to provide the updated timeline, status of

work, or invoices for the elevator and generator.21 After repeated failures to meet with Defendants

to provide requested information regarding inability to complete construction of the residence,

Plaintiffs retained counsel.22

On February 12, 2025, Plaintiffs sent Defendants a termination letter for breach of contract

via text message and e-mail.23 Plaintiffs assert the contract provided that if an action is brought for

breach of contract, the prevailing party would be entitled to damages, including attorney’s fees

and costs.24 On February 18, 2025, Plaintiffs allege they learned that Defendants failed to have all

inspections completed prior to closing of walls with insulation and sheetrock at the residence.25

The Complaint states that Plaintiffs hired a new contractor, and expended additional time, effort

and costs to resolve the inspection issue.26

B. Procedural Background

On March 20, 2025, Plaintiffs filed a Complaint in this Court against CBA Homebuilders,

LLC, Lionel Nelson, Dramatic Homes, and Kewa Short, asserting a claim for breach of contract.27

On June 3, 2025, Defendants CBA Homebuilders, LLC, Lionel Nelson, Kewa Short, and Dramatic

20 Id.

21 Id.

22 Id.

23 Id. at 5.

24 Id.

25 Id.

26 Id.

27 Rec. Doc. 1.

4

Homes were served with the Complaint.28 On July 11, 2025, Plaintiffs filed Motions for Entry of

Default against Defendants CBA Homebuilders, LLC, Lionel Nelson, Kewa Short, and Dramatic

Homes.29 On July 15, 2025, the Clerk of Court granted Plaintiff’s Motions for Entry of Default.30

On December 2, 2025, Plaintiffs filed the first Motion for Default Judgment, seeking default

judgment against Nelson only.31

On December 30, 2025, Plaintiffs filed a Motion for Leave of Court to File an Amended

Complaint to substitute CBA Homebuilders, LLC, with CBA Home Builders, Inc.32 On January

2, 2026, this Court granted Plaintiff’s Motion for Leave to File an Amended Complaint.33 On

February 3, 2026, Defendant CBA Home Builders, Inc. was served with the Amended

Complaint.34

On January 23, 2026, this Court denied Plaintiffs’ first Motion for Default Judgment,

concluding that default judgment should not be entered against Nelson only because the named

defendants were allegedly jointly liable.35 On March 30, 2026, Plaintiffs filed a Motion to Dismiss

28 Rec. Docs. 10, 11, 12.

29 Rec. Docs. 14, 15, 16, 17.

30 Rec. Doc. 18.

31 Rec. Doc. 19.

32 Rec. Doc. 20.

33 Rec. Doc. 22.

34 Rec. Doc. 26.

35 Rec. Doc. 25.

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Defendants Kewa Short and Dramatic Homes without prejudice.36 On April 2, 2026, this Court

granted Plaintiff’s Motion, dismissing Kewa Short and Dramatic Homes.37

On April 7, 2026, Plaintiffs filed a Motion for Entry of Default as to Defendant CBA Home

Builders, Inc.38 On April 8, 2026, the Clerk of Court granted Plaintiff’s Motion for Entry Default.39

On April 27, 2026, Plaintiffs filed the instant Motion for Default Judgment, seeking default

judgment against Defendants CBA Home Builders, Inc. and Nelson.40 To date, none of the named

defendants have made an appearance or responded to the instant motion.

II. Plaintiff’s Arguments

In the instant Motion for Default Judgment, Plaintiffs argue that the unchallenged

Complaint establishes a viable claim to relief.41 Plaintiffs contend that they are entitled to default

judgment on their breach of contract claim.42 Plaintiffs explain that under the Building Agreement,

Plaintiffs agreed to tender $650,000 to Defendant CBA Home Builders, Inc. for construction of

the residence.43 Plaintiffs contend that Defendants failed to complete construction of the residence

within the time agreed upon, and Defendants failed to provide updates to Plaintiffs regarding

36 Rec. Doc. 27.

37 Rec. Doc. 28.

38 Rec. Doc. 29.

39 Rec. Doc. 30.

40 Rec. Doc. 31.

41 Id.

42 Rec. Doc. 31-1 at 4.

43 Rec. Doc. 1-1.

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progress of the construction of the residence.44 Plaintiffs further argue that they are entitled to

recover damages in the amount of $217,587.17 for breach of contract, costs, including reasonable

attorney’s fees, pursuant to Paragraph 24 in the contract.45

III. Law and Analysis

A. Legal Standard on a Motion for Default Judgment

As the Fifth Circuit has explained, Federal Rule of Civil Procedure 55 establishes three

steps for obtaining a default judgment: (1) default; (2) entry of default; and (3) default judgment.46

A default occurs when “a defendant has failed to plead or otherwise respond to the complaint

within the time required by the Federal Rules.”47 The clerk will then enter an entry of default

“when the default is established by affidavit or otherwise.”48 After the clerk’s entry of default, a

“plaintiff may apply for a judgment based on such default. This is a default judgment.”49 Before

granting a motion for default judgment, this Court “has the duty to assure that it has the power to

enter a valid default judgment,” and must “look into its jurisdiction both over the subject matter

and the parties.”50 The Fifth Circuit has held that “[a] judgment entered without personal

jurisdiction is void.”51

44 Rec. Doc. 23 at 5.

45 Rec. Doc. 31.

46 New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996).

47 Id.

48 Id.

49 Id. (emphasis in original).

50 Sys. Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001).

51 Id.

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The Fifth Circuit emphasizes that “[d]efault judgments are a drastic remedy, not favored

by the Federal Rules and resorted to by courts only in extreme situations.”52 “A party is not entitled

to a default judgment as a matter of right, even where the defendant is technically in default.”53 In

cases over which the Court has subject matter jurisdiction and personal jurisdiction over the

parties, the Court may only issue a default judgment when circumstances support doing so. If the

procedural prerequisites for default are met, the Court must then decide whether the plaintiff’s

requests for relief are appropriate.54 The Court considers the following factors in deciding a motion

for default judgment:

[1] whether material issues of fact are at issue,

[2] whether there has been substantial prejudice,

[3] whether the grounds for default are clearly established,

[4] whether the default was caused by a good faith mistake or excusable

neglect,

[5] the harshness of a default judgment, and

[6] whether the court would think itself obliged to set aside the default on the

defendant’s motion.55

On a motion for default judgment, the Court accepts as true the plaintiff’s allegations of

fact but remains obligated to determine whether those allegations state a claim for relief.56 The

52 Sun Bank of Ocala v. Pelican Homestead & Sav. Ass’n, 874 F.2d 274, 276 (5th Cir. 1989).

53 Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996).

54 Fagan v. Lawrence Nathan Assocs., Inc., 957 F. Supp. 2d. 784, 796 (E.D. La. 2013) (Brown, J.) (citations

omitted).

55 Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).

56 Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001).

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pleadings must provide a sufficient basis to support the entry of a default judgment.57 When a party

seeks a default judgment for damages, the Fifth Circuit instructs that “damages should not [be]

awarded without a hearing or a demonstration by detailed affidavits establishing the necessary

facts.”58 However, “where the amount of damages and/or costs can be determined with certainty

by reference to the pleadings and supporting documents and where a hearing would not be

beneficial, a hearing is unnecessary.”59

B. Jurisdiction to Enter a Default Judgment

As a preliminary matter, the Court first considers whether it has subject matter jurisdiction

over this action and personal jurisdiction over Defendants.

1. Subject matter jurisdiction

Plaintiffs allege in the Amended Complaint that subject matter jurisdiction is proper in this

Court, based on 28 U.S.C. § 1332(a)(1) because the amount in controversy exceeds $75,000,

exclusive of interest and costs and the action is between citizens of different states.60 The Amended

Complaint states that Plaintiffs Reginald Johnson and Anyiesa Johnson are individual persons

domiciled in the state of Texas.61 As such, Plaintiffs are citizens of Texas.

The Amended Complaint states that Defendant CBA Home Builders, Inc. is a corporation

incorporated in the State of Louisiana, with its principal place of business in New Orleans,

57 Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (citations omitted).

58 United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979).

59 Fagan, 957 F. Supp. 2d at 802 (quoting Columbia Pictures Indus., Inc. v. Whitting, No. 06–133, 2006 WL

1851388, at *1 (W.D. Tex. June 1, 2006)).

60 Rec. Doc. 23 at 2.

61 Rec. Doc. 23 at 1.

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Louisiana.62 Further, the Amended Complaint explains that Defendant Nelson is an individual

residing in Louisiana. Accordingly, Defendants CBA Homes Builders, Inc., and Nelson are

citizens of Louisiana.63

Based on the record, there is complete diversity amongst the parties. Further, the amount

in controversy exceeds $75,000.64 As such, the Court finds that it has subject matter jurisdiction

over Plaintiffs’ claims against Defendants.

2. Personal jurisdiction

Next, the Court must determine whether it has personal jurisdiction over Defendants. The

Amended Complaint states that CBA Home Builders, Inc. is a corporation incorporated in

Louisiana with their principal place of business in Louisiana.65 The Amended Complaint further

explains that Nelson is an individual domiciled in Louisiana.66 The Fifth Circuit has explained that

the paradigm forum for the exercise of general jurisdiction for an individual is their domicile.67

The Fifth Circuit has further explained that a corporation’s “home” is the state of its incorporation,

and the state where it has its principal place of business.68 Thus, Defendants are subject to general

personal jurisdiction in Louisiana. Accordingly, the Court finds that it has personal jurisdiction

over Defendants.

62 Id.

63 Id.

64 Id.

65 Rec. Doc. 23 at 1–2.

66 Id. at 1.

67 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011).

68 Pace v. Cirrus Design Corp., 93 F.4th 879 (5th Cir. 2024).

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3. Service of Process

In order for a federal court to exercise personal jurisdiction over a defendant, “the

procedural requirement of service of summons must be satisfied.”69 Consequently, absent proper

service, the court lacks personal jurisdiction over the defendant, and any default judgment entered

against the defendant is void.70

Proper service of process must occur in accordance with Federal Rule of Civil Procedure

4. With respect to serving individuals within a judicial district of the United States, Rule(e)(2)(A)

authorizes service by, “delivering a copy of the summons and the complaint to the individual

personally.” With respect to serving corporations, partnerships, or associations within a judicial

district of the United States, Rule 4(h) authorizes service:

(1) in the manner prescribed by Rule 4(e)(1) for serving an individual; or

(2) by delivering a copy of the summons and of the complaint to an officer, a

managing or general agent, or any other agent authorized by appointment

or by law to receive service of process and—if the agent is one authorized

by statute and the statute so requires—by also mailing a copy of each to the

defendant.

Rule 4(e)(1) provides for service of process by “following state law for serving a summons in an

action brought in courts of general jurisdiction in the state where the district court is located or

where service is made.”

69 Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104 (1987) (citing Miss. Publ’g Corp. v.

Murphee, 326 U.S. 438, 444B45 (1946) (“[S]ervice of summons is the procedure by which a court having venue and

jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served.”)).

70 See Rogers v. Hartford Life and Accident Ins. Co., 167 F.3d 933, 940 (5th Cir. 1999) (“When a district

court lacks jurisdiction over a defendant because of improper service of process, the default judgment is void . . . .”);

Omni, 484 U.S. at 104.

11

Here, the record indicates CBA Home Builders, Inc. was personally served with the

Amended Complaint on February 3, 2026, through its registered agent, Lionel Nelson.71 Under

Louisiana Code of Civil Procedure Article 1261, “Service of citation or other process on a

domestic or foreign corporation is made by personal service on any one of its agents for service of

process.”72 Therefore, service of CBA Home Builders, Inc. was proper.

The record does not reflect that Nelson was served with the Amended Complaint. However,

Nelson was previously personally served with the Original Complaint,73 and the Clerk entered

default against him after he failed to appear.74 The Amended Complaint did not assert any new

claims for relief or additional allegations against Nelson. Accordingly, pursuant to Federal Rule

of Civil Procedure 5(a)(2), Plaintiffs were not required to serve Nelson with the Amended

Complaint.75 Accordingly, the Court finds that service of process was proper.

C. Entry of Judgment

1. Whether Default Judgment is Appropriate

The Court must next decide whether Plaintiffs’ request for entry of default judgment is

appropriate.76 The Court considers the following factors when determining whether to grant a

default judgment:

71 Rec. Doc. 26 at 2.

72 La. Code Civ. P. art. 1261.

73 Rec. Doc. 10.

74 Rec. Doc. 18.

75 See Fed. R. Civ. Pro. 5(a)(2) (“No service is required on a party who is in default for failing to appear. But

a pleading that asserts a new claim for relief against such a party must be served on that party under Rule 4.”).

76 Fagan, 957 F. Supp. 2d at 796 (citations omitted).

12

[1] whether material issues of fact are at issue,

[2] whether there has been substantial prejudice,

[3] the harshness of a default judgment, and

[4] whether the court would think itself obliged to set aside the default on the

[5] the harshness of a default judgment, and

[6] whether the court would think itself obliged to set aside the default on the

defendant’s motion.77

As for the first factor, when a party fails to respond to a complaint, as Defendants have

done here, it also fails to place any material facts in dispute, and is barred from contesting on

appeal the facts as established by the participating party’s pleadings.78 Turning to the second

factor, Defendants’ failure to respond to the complaint in this matter has substantially prejudiced

Plaintiffs’ interest in resolving its claims against Defendants.79 Third, the grounds for default are

clearly established. The record indicates that Defendant Lionel Nelson was served with the

Original Complaint on June 3, 2025.80 The record further indicates that Defendant CBA Home

Builders, Inc., was served with the Amended Complaint on February 3, 2026 through its registered

agent Lionel Nelson.81 The Clerk of Court issued an entry of default against Nelson on July 15,

77 Lindsey, 161 F.3d at 893.

78 Fagan, 957 F.Supp.2d at 797 (citing Nishimatsu Constr. Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206

(5th Cir. 1975)).

79 See id.

80 Rec. Doc. 10.

81 Rec. Doc. 26.

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2025, and against CBA Home Builders, Inc. April 8, 2026.82 Despite proper service, Defendants

have not appeared to answer this matter or challenge the entry of default against them. Fourth,

since Defendants have not participated in this matter, they have not offered any evidence to show

that their failure to appear was the product of good faith mistake or excusable neglect. As for the

fifth factor, entry of a default judgment would not be overly harsh, because, as discussed infra,

Plaintiffs are seeking a reasonable sum of money for breach of the agreement. Finally, the Court

is not aware of any facts that would give rise to “good cause” to set aside the default judgement if

challenged by Defendants. Accordingly, the Court finds that the six factors weigh in favor of

entering a default judgment.

Next, the Court must determine whether, taking all of Plaintiffs’ well-pleaded facts as true,

Plaintiffs has adequately demonstrated that they are entitled to a default judgment on the claims.83

2. Plaintiffs’ Claim Against Defendants

Plaintiffs assert a claim against Defendants for breach of contract. Plaintiffs allege that

Defendants breached the Building Agreement by failing to complete the construction of the

residence within the time provided. The Amended Complaint states on March 1, 2024, Plaintiffs

entered into a Building Agreement with Defendant CBA Home Builders, Inc. for the construction

of a residence.84 The total cost to build the residence was $650,000.85 The Amended Complaint

states Defendants failed to provide regular updates regarding the progress of the residence,

82 Rec. Docs. 18, 30.

83 See Fagan, 957 F.Supp.2d at 797 (citing Nishimatsu Constr. Ltd., 515 F.2d at 1206).

84 Rec. Doc. 23.

85 Rec. Doc. 1-1.

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refrained from working for months at a time on the construction of the residence, failed to purchase

the required materials and supplies, and the contract was ultimately terminated by Plaintiffs due to

the alleged lack of performance.86

In order to prevail on a breach of contract claim under Louisiana law, Plaintiffs must prove

by a preponderance of the evidence that: (1) Defendants owed them an obligation; (2) Defendants

failed to perform the obligation; and (3) Defendants’ failure to perform resulted in damage to

Plaintiffs.87

The Amended Complaint alleges Defendants breached the contract by failing to work as if

time was of the essence, failing to purchase materials, and failing to complete the construction of

the residence within the time provided, resulting in economic loss to Plaintiffs.88 However, the

underlying Building Agreement was entered into by Plaintiffs and CBA Home Builders, Inc.

only.89 Nelson signed the Building Agreement on behalf of CBA Home Builders, Inc.90 Accepting

the allegations as true, the Court finds that Plaintiff has sufficiently stated a claim against

Defendant, CBA Home Builders, Inc. for breach of contract. However, Plaintiffs have not properly

asserted a claim for breach of contract against Nelson because Nelson was not a party to the

Building Agreement.

86 Rec. Doc. 23.

87 Hayes Fund for the First United Methodist Church of Welsh, L.L.C. v. Kerr–McGee Rocky Mt., L.L.C., 14-

2592 (La. 12/8/15), 193 So. 3d 1110, 1115.

88 Rec. Doc. 23 at 6.

89 Rec. Doc. 1-1.

90 Id.

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Plaintiffs seek to hold Nelson personally liable for the corporation’s contractual obligations

under a corporate veil-piercing theory.91 Plaintiffs contend Nelson is the alter ego of CBA Home

Builders, Inc. because its corporate and personal funds were commingled and the corporation’s

active status lapsed at some point during the duration of the contract.92 Plaintiffs further contend

that Nelson was negligent, that he intentionally deceived and misled them, and that Nelson acted

in bad faith because he knew Plaintiffs relied on his statements and representations regarding

construction of the residence, and he failed to exercise reasonable care and failed to keep Plaintiffs

updated on the construction of the Residence.93

Corporations function as distinct legal entities, separate from the individuals who own

them, and their shareholders are generally not liable for the debts and obligations of the

corporation.94 Louisiana courts have recognized that veil piercing is an extraordinary remedy

warranted only in exceptional circumstances.95 The Louisiana Supreme Court applies five factors

to determine whether to pierce the corporate veil: (1) commingling of corporate and shareholder

funds, (2) failure to follow statutory formalities for incorporating and transacting corporate affairs,

(3) undercapitalization, (4) failure to provide separate bank accounts and bookkeeping records,

and (5) failure to hold regular shareholder and director meetings.96 In addition, “the Court may

91 Rec. Doc. 31-1 at at6–8.

92 Id.

93 Id.at 8.

94 Riggins v. Dixie Shoring Co., 590 So. 2d 1164, 1167 (La. 1991).

95 Bujol v. Entergy Servs., Inc., 03-0492 (La. 5/25/04), 922 So. 2d 1113, 1128, adhered to on reh'g (La.

1/19/06).

96 Riggins, 590 So. 2d at 1167.

16

consider other factors as part of the totality of the circumstances if appropriate.”97 Moreover,

“[W]here fraud or deceit is absent, other circumstances must be so strong as to clearly indicate that

the corporation and shareholder operated as one.”98 “Piercing the veil under the alter ego theory

usually requires evidence that ‘fraud or deceit has been practiced by the [members] acting through

the corporation.’”99

Plaintiffs contend that the Court should pierce the corporate veil under an alter ego theory

because Nelson commingled personal and corporate funds and disregarded corporate formalities

when his corporation’s active status lapsed.100 Furthermore, Plaintiffs argue that Nelson

intentionally deceived and misled them and acted in bad faith because Nelson knew Plaintiffs

relied on his statements and representations regarding construction of the residence, and he failed

to exercise reasonable care and failed to keep Plaintiffs updated on the construction of the

residence.101 Plaintiffs further contend Nelson’s work was substandard and incomplete, and

Nelson failed to perform his contractual obligations.102

To support their theory of commingling corporate and shareholder funds, Plaintiffs rely on

the payments for Change Orders to Defendants.103 Plaintiffs contend Nelson regularly uses his

97 Sweeping Corp. of Am., LLC v. MDL Enters, LLC, 23-7364, 2024 WL 5165177, at *5 (E.D. La. May 7,

2024) (citing Hollowell v. Orleans Reg'l Hosp. LLC, 217 F.3d 379, 387 (5th Cir. 2000)).

98 Id. (quoting Hill Int’l, v. JTS Realty Corp., 2021-0157 (La. App. 1 Cir. 10/20/22), 370 So. 3d 16, 33).

99 Id. (quoting ORX Res., Inc. v. MBW Expl., LLC., 2009-0662 (La. App. 4 Cir. 2/10/10), 32 So. 3d 931, 935,

writ denied, 2010-0530 (La. 5/7/10), 34 So. 3d 862).

100 Rec. Doc. 31-1 at 6.

101 Id. at 8.

102 Id.

103 Id. at 7–8.

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personal Venmo account for business related items.104 Plaintiffs further contend some Venmo

payments for change orders were transmitted directly to Nelson personally.105 Although this

evidence does support an inference of some commingling of funds, Plaintiffs have not provided

additional evidence regarding Nelson’s “regular use” of his personal Venmo account for business

related items. Considering Plaintiffs have shown only two Venmo payments transmitted to Nelson

personally, the Venmo transactions demonstrate only limited commingling of funds.

Regarding the failure to follow statutory formalities for incorporating and transacting

corporate affairs, Plaintiffs contend Defendants did not follow corporate formalities because the

CBA Home Builders, Inc. was administratively terminated by the Louisiana Secretary of State.106

Nevertheless, Plaintiffs acknowledge that CBA Home Builders, Inc. was reinstated less than two

months later.107 Accordingly, this factor provides limited support in Plaintiffs’ argument of

piercing the corporate veil.

Plaintiffs further argue that Defendants intentionally misled and deceived them regarding

the construction of the residence because Plaintiffs relied upon Defendants representations, failed

to provide updates, and delivered substandard and incomplete work.108 Courts have recognized

that “piercing the corporate veil under the alter ego theory usually requires evidence that ‘fraud or

deceit has been practiced by the [members] acting through the corporation.’”109 Plaintiffs have not

104 Id.

105 Id.

106 Id. at 7.

107 Id.

108 Id. at 8.

109 Sweeping Corp., 2024 WL 5165177, at *5 (quoting ORX Res., 34 So. 3d at 935).

18

shown that Nelson used the corporation as an instrumentality to perpetuate fraud. Rather, the

alleged misconduct is primarily centered on Nelson’s failure to fulfill contractual obligations.

Accordingly, this factor provides limited support for Plaintiffs piercing the corporate veil under

the alter ego theory. Considering the undercapitalization factor, Plaintiffs have not presented

evidence regarding undercapitalization, failure to maintain separate bank accounts, or failure to

hold regular shareholder or director meetings. For these reasons, the Court finds that Plaintiffs

have not established sufficient grounds to attach personal liability upon Nelson through piercing

of the corporate veil under the alter ego theory.

The Court may dismiss a claim sua sponte if it concludes that the claim fails as a matter of

law and gives the plaintiff notice of its intention and an opportunity to respond.110 Accordingly,

Plaintiffs are granted 14 days from the date of this Order to amend its claim against Nelson for

breach of contract. If Plaintiffs cannot satisfactorily amend the complaint, the claim will be

dismissed.

D. Relief

1. Damages

Finally, having found that entry of default judgment is warranted on Plaintiffs’ breach of

contract claim against CBA Home Builders, Inc., the Court must further determine if it would be

appropriate to award the remedies requested by Plaintiffs in the pending motion.111 Federal Rule

of Civil Procedure 54(c) states that “[a] default judgment must not differ in kind from, or exceed

in amount, what is demanded in the pleadings.” While the relief available is restricted to what is

110 Carver v. Atwood, 18 F.4th 494, 498 (5th Cir. 2021).

111 Fagan, 957 F.Supp.2d. at 801.

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requested in the pleadings, the Court must also determine if the requested relief is appropriate

based on governing law.112

When a party seeks a default judgment for damages, the Fifth Circuit has held that

“damages should not [be] awarded without a hearing or a demonstration by detailed affidavits

establishing the necessary facts.”113 However, “where the amount of damages and/or costs can be

determined with certainty by reference to the pleadings and supporting documents and where a

hearing would not be beneficial, a hearing is unnecessary.”114

Here, Plaintiffs have provided this Court with the contract at issue, receipts, and additional

records to support the relief requested, specifically against CBA Home Builders, Inc. This

evidence establishes the basis for the damages and relief specified in the request for default

judgment, it is not necessary for this Court to hold a hearing.115 Furthermore, as CBA Home

Builders, Inc. has failed to take any action in this matter, it is unlikely that CBA Home Builders,

Inc. would participate in an evidentiary hearing to determine damages. Therefore, a hearing would

not be beneficial and as such is unnecessary.116

In the Complaint, Plaintiff seeks the following relief: (1) actual damages in the amount of

$206,766.17, and (2) an award of attorneys’ fees and costs in the amount of $10,821.117 In the

motion for default judgment, Plaintiffs requests that the Court award $206,766.17 for Defendants’

112 Id.

113 Freeman, 605 F.2d at 857.

114 Fagan, 957 F. Supp. 2d at 802 (quoting Columbia Pictures Indus., 2006 WL 1851338, at *1).

115 Rec. Doc. 31.

116 James v. Frame, 6 F.3d 307, 311 (5th Cir. 1993) (citing Fed. R. Civ. P. 55(b)).

117 Rec. Doc. 31-3.

20

breach of contract, plus $10,821 in attorneys’ fees and costs, and post-judgment interest at the

legal rate provided by federal law.118 Plaintiffs have established actual damages in the amount of

$206,766.17, representing the amount owed for CBA Home Builders, Inc.’s breach of contract.119

2. Attorney’s Fees

Plaintiffs request attorney’s fees in the amount of $10,821.00. Pursuant to the underlying

contract, the non-defaulting party is entitled to attorney’s fees.120

To calculate reasonable attorney’s fees, the Fifth Circuit uses the “lodestar” method, which

involves multiplying the number of hours spent by a reasonable hourly rate for such work in the

community to obtain a lodestar.121 A court may then enhance or decrease the lodestar based on the

twelve factors set out in Johnson v. Georgia Highway Express, Inc.122 The lodestar may not be

adjusted if the Johnson factors were considered in determining the original lodestar amount.123

118 Id.

119 Rec. Doc. 31-2.

120 Rec. Doc. 1-1 at 3.

121 Heidtman v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999).

122 Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013). Traditionally, courts have considered the

factors set forth in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974) when calculating

attorney’s fees. In Perdue v. Kenny A. ex. rel. Winn, 559 U.S. 542, 550–551 (2010), the Supreme Court noted that the

Johnson factors were “[o]ne possible method” for determining reasonable attorney’s fees, but that the factors “gave

very little actual guidance to district courts. Setting attorney’s fees by reference to a series of sometimes subjective

factors placed unlimited discretion in trial judges and produced disparate results.” Since Perdue, however, the Fifth

Circuit and the Eastern District of Louisiana have continued to weigh the Johnson factors when considering whether

to decrease or enhance the lodestar in attorney’s fee cases. See, e.g., Ransom v. M. Patel Enters., Inc., 734 F.3d 377,

388 n.17 (5th Cir. 2013); Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013); Altier v. Worley Catastrophe

Response, LLC, No. 11-241, 2012 WL 161824, at *22 (E.D. La. Jan. 18, 2012) (Wilkinson, M.J.). Accordingly, this

Court does the same. See Ahmed v. Bros. Food Mart, et al., No. 13-5948, Rec. Doc. 33 (E.D. La. Sept. 12, 2014)

(Brown, J.).

123 Johnson, 488 F.2d at 417–19. The Johnson factors are: (1) the time and labor required to litigate the

matter; (2) the novelty and difficulty of the issues; (3) the skill required to properly litigate the issues; (4) whether the

attorney had to refuse other work to litigate the case; (5) the attorney’s customary fee; (6) whether the fee is fixed or

contingent; (7) whether the client or case imposed time constraints; (8) the amount involved and results obtained; (9)

the experience, reputation, and ability of the attorney; (10) whether the case was “undesirable;” (11) the type of

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Plaintiffs attach a billing summary from their attorney, however, much of the pertinent

information is redacted, including the billing rate and time expended on certain tasks. Further, in

the motion for default judgment, Plaintiffs fail to provide information regarding the attorneys’

reputation, years of experience, special skills, or the prevailing rates for similar attorneys in the

Eastern District of Louisiana.

Therefore, the Court cannot determine whether the number of hours expended was

reasonable. Moreover, Plaintiffs have not provided any information to the Court to demonstrate

that the requested hourly rate is reasonable “in the community for such work.”124 As the Fifth

Circuit held in Louisiana Power & Light Company v. Kellstrom, courts awarding attorneys’ fees

must determine both the reasonable number of hours expended on a matter and “the reasonable

hourly rates for the participating lawyers.”125 The Fifth Circuit has instructed that courts should

consider both the attorney’s regular rate as well as the prevailing rates in the community for similar

work to ensure the billing rate requested is reasonable.126 Similarly, in Blum v. Stenson, the

Supreme Court determined that “courts properly have required prevailing attorneys to justify the

reasonableness of the requested rate” by placing the burden on the applicant “to produce

satisfactory evidence—in addition to the attorney’s own affidavits—that the requested rates are in

line with those prevailing in the community for similar services by lawyers of reasonably

comparable skill, experience, and reputation.”127 As the Fifth Circuit has previously determined,

attorney-client relationship and whether the relationship was long-standing; and (12) awards made in similar cases.

124 Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 (5th Cir. 2006).

125 50 F.3d 319, 324 (5th Cir. 1995).

126 Id. at 328 (citing H.J., Inc. v. Flygt Corp., 925 F.2d 257, 260 (8th Cir. 1991)).

127 465 U.S. 886, 896 n.11 (1984).

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“[t]he hourly fee awarded must be supported by the record; the district court may not simply rely

on its own experience in the relevant market to set a reasonable hourly billing rate.”128 Thus, the

Court cannot determine at this time whether the requested hourly rate is reasonable. Accordingly,

the Court orders Plaintiffs’ counsel to submit additional briefing regarding the hourly rate

requested and the number of hours expended, so that the Court may consider this evidence in its

evaluation of the reasonableness of the requested attorneys’ fees.

Finally, 28 U.S.C. § 1961 provides: “Interest shall be allowed on any money judgment in

a civil case recovered in a district court.”129 Accordingly, the Court also grants Plaintiff’s request

for interest on the amount of this judgment in accordance with 28 U.S.C. § 1961.

IV. Conclusion

For the foregoing reasons, the Court finds that it has jurisdiction to enter a default judgment

against CBA Home Builders, Inc. and that entry of a default judgment against CBA Home

Builders, Inc. is appropriate. The Court further finds that taking all of Plaintiffs’ well-pleaded facts

as true, Plaintiffs have adequately demonstrated that they are entitled to default judgment on their

claim for breach of contract against CBA Home Builders, Inc. The Court finds CBA Home

Builders, Inc. liable to Plaintiffs in the amount of $206,766.17 in damages, plus interest on the

amount of this judgment from the date of this judgment, pursuant to 28 U.S.C. § 1961. However,

because of a lack of evidence submitted, the Court cannot determine at this time whether the hours

expended or the hourly rate requested by Plaintiffs for Plaintiffs’ counsel’s work on this case is

128 League of United Latin Am. Citizens No. 4552 (LULAC) v. Roscoe Indep. Sch. Dist., 119 F.3d 1228, 1234

(5th Cir. 1997) (citations omitted); see also Cobb v. Miller, 818 F.2d 1227, 1232 & n.7 (5th Cir. 1987) (noting that a

magistrate judge should not have considered his personal experience in setting a reasonable hourly rate).

129 See 28 U.S.C. § 1961(a) (emphasis added).

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reasonable. Accordingly, the Court orders Plaintiffs’ counsel to submit additional briefing

regarding the hourly rate requested and the number of hours expended, so that the Court may

consider this evidence in its evaluation of the reasonableness of the requested attorneys’ fees.

IT IS HEREBY ORDERED that Plaintiffs’ Motion for Default Judgment’ is

GRANTED IN PART, DEFERRED IN PART and DENIED IN PART as to Defendant CBA

Home Builders, Inc. The motion is GRANTED to the extent it requests that a judgment be entered

on Plaintiffs’ breach of contract claim against CBA Home Builders, Inc. The request for attorneys’

fees is DEFERRED pending further briefing on that issue. Plaintiffs’ counsel must submit

additional briefing regarding the attorneys’ fees requested within 14 days of entry of this Order.

IT IS FURTHER ORDERED that the motion is DENIED insofar as Plaintiffs seek

default judgment against Defendant Lionel Nelson. Plaintiffs are granted leave to amend its claim

against Nelson within 14 days of this Order.

NEW ORLEANS, LOUISIANA, thid Oth’ day of September, 2026.

NANNETTE JOLIVETTE BROWN

UNITED STATES DISTRICT JUDGE

6° Rec. Doc. 31.

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