United States District Court, S.D. Georgia, Savannah Division
BENNY HOLLAND, JR., DAVID F. ADAM, and MANAGEMENT-ILA MANAGED HEALTH CARE TRUST FUND, Plaintiffs,
GARY SCOTT, Defendant.
WILLIAM T. MOORE, JR., JUDGE.
the Court is the Plaintiffs' second Motion for Default
Judgment (Doc. 12), to which Defendant has not responded. In
this Motion, Plaintiffs request a default judgment against
Defendant Gary Scott. (Id.) For the following
reasons, Plaintiffs' motion is DENIED.
case arises from welfare benefits that Plaintiffs provided to
Defendant Gary Scott and his ex-spouse, Linda Scott. (Doc.
1.) Plaintiff Management-ILA Managed Health Care Trust Fund
("MILA") is a "multiemployer employee welfare
benefit plan . created and maintained for the purpose of
providing welfare benefits to eligible participants and their
qualified dependents in accordance with MILA's plan
documents and the collective bargaining agreement between
United States Maritime Alliance, Ltd. ("USMX") and
the International Longshoremen's Association, AFL-CIO.
(``ILA") " (Id. at 1-2.) Plaintiffs David
F. Adam and Benny Holland, Jr. are co-chairmen of the MILA
Board of Trustees. (Id. at 1.) Plaintiffs
acknowledge that Defendant Scott "was a participant in
MILA and entitled to receive healthcare benefits from
MILA" during the relevant time period. (Id. at
3.) Additionally, Plaintiffs acknowledge that prior to August
22, 2014, Linda Scott was entitled to receive healthcare
benefits from Plaintiffs as Defendant Scott's lawful
their complaint, Plaintiffs allege that Defendant Gary Scott
committed fraud and negligent misrepresentation in violation
of Georgia law because he allowed Plaintiffs to provide Linda
Scott healthcare benefits until "about July 26,
2017" even though Linda Scott was no longer
Defendant's lawful spouse. (Id. at 5.)
Plaintiffs state that MILA's "controlling plan
documents" provide that an ex-spouse "loses the
eligibility for benefits upon the date of any final decree in
a proceeding to dissolve or terminate the marriage, and
coverage ceases upon said final decree." (Id.
at 3.) Moreover, Plaintiffs allege that their controlling
plan documents "put [ ] participants on notice that they
`must notify [MILA] upon the receipt of any interlocutory or
final decree in a proceeding to dissolve or terminate the
marriage.'" (Id.) Plaintiffs did not supply
the Court with these controlling plan documents, but only
provided an affidavit written by Laverne Thompson, Executive
Director of MILA, reciting relevant sections of the
controlling plan documents. (Doc. 8, Attach. 2.) Plaintiffs
further allege that on August 22, 2014, "a final divorce
decree was entered in the Superior Court of the Eastern
Judicial Circuit of the State of Georgia terminating the
marriage of Defendant Scott and Linda Scott." (Doc. 1 at
4). Plaintiffs claim to have received the divorce decree
"on or about July 26, 2017" but did not provide the
Court with this divorce decree. (Id.)
argue that under the controlling plan, Defendant Scott had an
"obligation to notify [MILA] of the divorce ..."
and had he notified Plaintiffs of his divorce, Linda
Scott's healthcare benefits would have been terminated on
the day the divorce was finalized. (Id.) In reliance
on Defendant Scott's silence, Plaintiffs provided full
healthcare coverage to Linda Scott from August 22, 2014 to
July 26, 2017. (Id. at 5.) According to
Plaintiffs' records, Linda Scott submitted claims in the
amount of "$195, 173. 34, which includes $78, 023.82 in
medical benefits, $114, 714, 67 in prescription-drug
benefits, $2, 254.85 in dental benefits, and $180.00 in
vision benefits." (See Doc. 8, Attach. 2.) Thus,
Plaintiffs argue that Defendant Scott committed fraud and
negligent misrepresentation by failing to notify MILA of his
divorce and now Plaintiffs claim damages in the amount of
healthcare benefits disbursed on behalf of Linda Scott after
the date of the divorce. (Doc. 1 at 5.)
filed their complaint on January 22, 2019. (Doc. 1.)
Defendant Scott was served a copy of the complaint and
summons on April 4, 2019 (Doc. 6), but he did not file a
response. On June 21, 2019, Plaintiffs filed their first
Motion for Default Judgment. (Doc. 8.) On August 5, 2019,
this Court denied Plaintiffs' Motion for Default Judgment
because of Plaintiffs' failure to first receive a
Clerk's Entry of Default in compliance with Federal Rule
of Civil Procedure 55. (Doc. 9.) Subsequently, Plaintiffs
received a Clerk's Entry of Default on August 7, 2019.
(Doc. 11.) Plaintiffs then filed this second Motion for
Default Judgment. (Doc. 12.)
this Court has found that Defendant Scott failed to file a
responsive pleading and the Plaintiffs have received a
Clerk's Entry of Default (Doc. 11), the Court will now
consider the merits of Plaintiffs' Motion for Default
Judgment (Doc. 12) . There is no right to judgment by
default, but the matter lies within the Court's
discretion. Hamm v. DeKalb Cnty., 774 F.2d 1567,
1576 (11th Cir. 1985). ``(B]efore entering a default judgment
for damages, the district court must ensure that the
well-pleaded allegations in the complaint, which are taken as
true due to the default, actually state a substantive cause
of action and that there is a substantive, sufficient basis
in the pleadings for the particular relief sought."
Tyco Fire & Sec, LLC v. Alcocer, 218 F.
App" x 860, 863 (11th Cir. 2007). Moreover,
``[a] court has an obligation to assure that there
is a legitimate basis for any damage award it enters . . .
." Anheuser Busch, Inc. v. Philpot, 317 F.3d
1264, 1266 (11th Cir. 2003). However, default judgments are a
disfavored disposition of a case in the Eleventh Circuit.
In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295
(11th Cir. 2003); Fla. Physician's Ins. Co. v.
Ehlers, 8 F.3d 780, 783 (11th Cir. 1993). Courts are
especially hesitant to grant default judgments when large
sums of money are requested as damages. Swank v. City of
Pagedale, 810 F.2d 791, 7 92 n.2 (8th Cir. 1987);
Tozer v. Charles A. Krause Milling Co., 189 F.2d
242, 245 (3d Cir. 1951). Therefore, to ensure there is
sufficient basis for the relief sought, a court may hold a
hearing to determine if default judgment is appropriate.
See Fed.R.Civ.P. 55(b) (2) .
request that this Court enter a judgment against Defendant
Scott in the amount of $195, 173 .24 . (Id.)
Plaintiffs assert that Defendant Scott's failure to
inform MILA of his divorce from Linda Scott amounted to fraud
and negligent misrepresentation because he knew of his
obligation to notify MILA of a divorce and his failure to do
so caused Plaintiffs to disburse benefits on behalf of Linda
Scott although she was no longer Defendant Scott's lawful
spouse. (Doc. 12.) These allegations are we11-pled, but
Plaintiffs did not provide sufficient support in the
pleadings to substantiate a default judgment. Plaintiffs did
not provide the Court with the divorce decree or MILA's
controlling plan documents. Both the divorce decree and the
controlling plan documents are necessary to support
Plaintiffs claims and easily accessible to Plaintiffs.
Without these documents, the Court cannot substantiate claims
that Defendant Scott should have known to notify Plaintiffs
of his divorce or that Defendant Scott's divorce was
finalized on August 22, 2014.
Plaintiffs' claims are deemed admitted without providing
the controlling plan documents or divorce decree, the Court
cannot grant damages in a default judgment without a
sufficient basis for the relief sought. Plaintiffs have not
provided sufficient support for the relief requested.
Plaintiffs seek $195, 173.24 in damages. (Doc. 12.) This
amount represents the healthcare benefits provided on behalf
of Linda Scott after her divorce from Defendant Gary Scott.
(Id.) Although Plaintiffs provided billing records
evidencing $195, 173.24 in benefits (Doc. 8, Attach. 2), the
Court cannot know when Linda Scott was ineligible for
benefits without the divorce decree or controlling plan
documents. The divorce decree and controlling plan documents
would prove when the marriage was terminated and when Linda
Scott's benefits should have been terminated as a result.
Moreover, Plaintiffs' requested damages are large enough
to make the Court hesitant to grant default judgment without
a hearing on the matter.
foregoing reasons, Plaintiffs' second Motion for Default
Judgment (Doc. 12) is DENIED WITHOUT
PREJUDICE. Plaintiffs may re-file to correct the
deficiencies identified herein within 14
days of the date of this order. Once Plaintiffs have
corrected these deficiencies, this Court will schedule a
hearing to determine if the pleadings support a default
judgment in the requested amount.