UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
GUARANTEE COMPANY OF NORTH AMERICA USA,
Plaintiff, Civil Action No. 12-00736 (CKK) v.
JESUS BARRERA, et al.,
Defendants.
MEMORANDUM OPINION (December 9, 2012)
Presently before the Court are six Motions for Default Judgment by Guarantee Company
of North America USA (“Plaintiff”) against Defendants Jesus Barrera d/b/a Barrera Transport
(“Barrera”), February Fourteen, Inc. (“February Fourteen”), Liverpool Express, Inc. (“Liverpool
Express”), MTS of Wisconsin, Ltd. (“MTS”), Rakhwinder Singh d/b/a Rainbow Trucking
(“Singh”), and Budreck Truck Lines, Inc. (“Budreck”) (collectively “Defendants”). Defendants
have not entered an appearance before this Court, nor have they responded to the respective
motions for default judgment against them. Having carefully considered the Amended
Complaint, Plaintiff’s submissions and attachments thereto, applicable case law, statutory
authority, and the record of the case as a whole, the Court shall GRANT Plaintiff’s [27], [28],
[29], [30], [31], and [35] Motions for Default Judgment, for the reasons that follow.
I. BACKGROUND
A review of the facts of this case, as alleged by Plaintiff, is necessary for a discussion of
this Court’s jurisdiction over Plaintiff’s claims. Plaintiff was at all relevant times a duly
admitted and licensed insurer, permitted under the laws of the State of Michigan and the District of Columbia to offer and sell the surety bond that is the subject of this action. Am. Compl. ¶ 1.
On December 22, 2012, Plaintiff issued a property broker’s surety bond number TM5122229
(the “Bond”) in the penal sum of $10,000. Id. ¶ 5. The Bond was issued on behalf of non-party
Cambridge Logistics, Inc., a property broker in the business of arranging for transportation of
goods by motor carrier, for the benefit of any and all motor carriers or shippers to whom
Cambridge Logistics, Inc. may be legally liable for the damages described in the Bond. Id. ¶ 8.
Beginning in January 2012, Plaintiff began receiving claims against the Bond from the
Defendants motor carriers who alleged that they had provided transportation services for
Cambridge Logistics, Inc. and had not been paid for such services. See id. ¶ 9 & Ex. B. On May
8, 2012, Plaintiff commenced this interpleader action pursuant to 28 U.S.C. § 1335 against
Barrera, February Fourteen, Liverpool Express, MTS, and Singh. See Compl., ECF No. [1]. On
August 7, 2012, Plaintiff filed an Amended Complaint, adding Budreck as a Defendant. See Am.
Compl., ECF No. [13]. Plaintiff alleges that the claims, and claims which could be asserted, by
Defendants are all adverse to each other, as the sum of the amounts claimed exceeds the
maximum liability of Plaintiff under the Bond. Id. ¶ 12. Specifically, the amount of the claims
asserted by Defendants total approximately $36,200 while the maximum liability of Plaintiff, if
any, is $10,000. Id. For this reason, and in order to avoid multiple litigation and potential
multiple or inconsistent liability, Plaintiff’s Amended Complaint requests that the Court order all
Defendants with claims against the Bond to interplead and establish their respective claims in
this single action. Id. ¶ 14.
Plaintiff has filed proof of putative service on each of the Defendants. See ECF Nos. [6]-
[9], [11], [33]. According to the proof of service filed with the Court, Budreck was required to
respond by October 7, 2012, and all remaining Defendants were required to respond by July 8,
2 2012. Because all of the Defendants failed to respond to Plaintiff’s Complaint within the
prescribed period of time, and upon the filing of motions for entry of default by Plaintiff, the
Clerk of the Court made an entry of default as to each Defendant on October 16, 2012. See ECF
Nos. [36], [37]. Presently before the Court are Plaintiff’s Motions for Default Judgment against
each Defendant. See ECF Nos. [27]-[31],[35]. As of the date of this Memorandum Opinion,
Defendants have neither entered an appearance nor filed any pleadings in this case.
II. LEGAL STANDARD AND DISCUSSION
Plaintiffs bring this action pursuant to the Federal Interpleader Statute, 28 U.S.C. § 1335,
which permits a party who is exposed to multiple claims on a single obligation, and who wants to
obtain adjudication of the claims in a single proceeding, to bring an action in interpleader. See
Comm’l Union Ins. Co. v. United States, 999 F.2d 581, 583 (D.C. Cir. 1993). A court may
exercise jurisdiction over an interpleader action if: (1) the plaintiff has custody of the disputed
property, which exceeds $500; (2) the plaintiff deposits the disputed property into the registry of
the court; and (3) two or more adverse claimants of diverse citizenship claim or may claim an
interest in the disputed property. 28 U.S.C. § 1335; Star Ins. Co. v. Cedar Valley Express, LLC,
273 F. Supp. 2d 38, 41 (D.D.C. 2002). The Court has jurisdiction over this interpleader action
under the provisions of 28 U.S.C. § 1335(a) because, as alleged in the pleadings, there exists
diversity of citizenship between at least two of the Defendants, Am. Compl. ¶ 2, and the penal
sum of the Bond against which all Defendants assert adverse claims is $10,000, a sum in excess
of $500, Am. Compl. ¶ 3. Furthermore, Plaintiff, at the time of filing its Complaint, filed a
motion for leave to deposit $10,000 into the Registry of this Court. See Pl.’s Mot. for Leave to
3 Deposit Funds into the Registry of the Court, ECF No. [2].1
A Court has broad discretion to order interpleader relief as an equitable remedy designed
to achieve an orderly distribution of a limited fund. See Star Ins. Co., 273 F. Supp. 2d at 40.
Where a court grants interpleader relief, the plaintiff may be discharged from further court
proceedings, provided the plaintiff does not assert an interest in the distribution of the disputed
property. 28 U.S.C. § 2361. Normally, an interpleader action is concluded in two stages, the
first determining that the statutory requirements are met and relieving the plaintiff from liability,
and the second adjudicating the adverse claims of the defendant claimants to the disputed
property. However, this bifurcation is not mandatory. New York Life Ins. Co. v. Connecticut
Dev. Auth., 700 F.2d 91, 95 (2d Cir. 1983). Where, as here, no defendant enters an appearance
in the action, their subsequent defaults “d[o] not make the interpleader action inappropriate but
merely expedite its conclusion by obviating the normal second stage.” Id. at 95. See also Gulf
Coast Galvanizing, Inc. v. Steel Sales, Co., Inc., 826 F. Supp.
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
GUARANTEE COMPANY OF NORTH AMERICA USA,
Plaintiff, Civil Action No. 12-00736 (CKK) v.
JESUS BARRERA, et al.,
Defendants.
MEMORANDUM OPINION (December 9, 2012)
Presently before the Court are six Motions for Default Judgment by Guarantee Company
of North America USA (“Plaintiff”) against Defendants Jesus Barrera d/b/a Barrera Transport
(“Barrera”), February Fourteen, Inc. (“February Fourteen”), Liverpool Express, Inc. (“Liverpool
Express”), MTS of Wisconsin, Ltd. (“MTS”), Rakhwinder Singh d/b/a Rainbow Trucking
(“Singh”), and Budreck Truck Lines, Inc. (“Budreck”) (collectively “Defendants”). Defendants
have not entered an appearance before this Court, nor have they responded to the respective
motions for default judgment against them. Having carefully considered the Amended
Complaint, Plaintiff’s submissions and attachments thereto, applicable case law, statutory
authority, and the record of the case as a whole, the Court shall GRANT Plaintiff’s [27], [28],
[29], [30], [31], and [35] Motions for Default Judgment, for the reasons that follow.
I. BACKGROUND
A review of the facts of this case, as alleged by Plaintiff, is necessary for a discussion of
this Court’s jurisdiction over Plaintiff’s claims. Plaintiff was at all relevant times a duly
admitted and licensed insurer, permitted under the laws of the State of Michigan and the District of Columbia to offer and sell the surety bond that is the subject of this action. Am. Compl. ¶ 1.
On December 22, 2012, Plaintiff issued a property broker’s surety bond number TM5122229
(the “Bond”) in the penal sum of $10,000. Id. ¶ 5. The Bond was issued on behalf of non-party
Cambridge Logistics, Inc., a property broker in the business of arranging for transportation of
goods by motor carrier, for the benefit of any and all motor carriers or shippers to whom
Cambridge Logistics, Inc. may be legally liable for the damages described in the Bond. Id. ¶ 8.
Beginning in January 2012, Plaintiff began receiving claims against the Bond from the
Defendants motor carriers who alleged that they had provided transportation services for
Cambridge Logistics, Inc. and had not been paid for such services. See id. ¶ 9 & Ex. B. On May
8, 2012, Plaintiff commenced this interpleader action pursuant to 28 U.S.C. § 1335 against
Barrera, February Fourteen, Liverpool Express, MTS, and Singh. See Compl., ECF No. [1]. On
August 7, 2012, Plaintiff filed an Amended Complaint, adding Budreck as a Defendant. See Am.
Compl., ECF No. [13]. Plaintiff alleges that the claims, and claims which could be asserted, by
Defendants are all adverse to each other, as the sum of the amounts claimed exceeds the
maximum liability of Plaintiff under the Bond. Id. ¶ 12. Specifically, the amount of the claims
asserted by Defendants total approximately $36,200 while the maximum liability of Plaintiff, if
any, is $10,000. Id. For this reason, and in order to avoid multiple litigation and potential
multiple or inconsistent liability, Plaintiff’s Amended Complaint requests that the Court order all
Defendants with claims against the Bond to interplead and establish their respective claims in
this single action. Id. ¶ 14.
Plaintiff has filed proof of putative service on each of the Defendants. See ECF Nos. [6]-
[9], [11], [33]. According to the proof of service filed with the Court, Budreck was required to
respond by October 7, 2012, and all remaining Defendants were required to respond by July 8,
2 2012. Because all of the Defendants failed to respond to Plaintiff’s Complaint within the
prescribed period of time, and upon the filing of motions for entry of default by Plaintiff, the
Clerk of the Court made an entry of default as to each Defendant on October 16, 2012. See ECF
Nos. [36], [37]. Presently before the Court are Plaintiff’s Motions for Default Judgment against
each Defendant. See ECF Nos. [27]-[31],[35]. As of the date of this Memorandum Opinion,
Defendants have neither entered an appearance nor filed any pleadings in this case.
II. LEGAL STANDARD AND DISCUSSION
Plaintiffs bring this action pursuant to the Federal Interpleader Statute, 28 U.S.C. § 1335,
which permits a party who is exposed to multiple claims on a single obligation, and who wants to
obtain adjudication of the claims in a single proceeding, to bring an action in interpleader. See
Comm’l Union Ins. Co. v. United States, 999 F.2d 581, 583 (D.C. Cir. 1993). A court may
exercise jurisdiction over an interpleader action if: (1) the plaintiff has custody of the disputed
property, which exceeds $500; (2) the plaintiff deposits the disputed property into the registry of
the court; and (3) two or more adverse claimants of diverse citizenship claim or may claim an
interest in the disputed property. 28 U.S.C. § 1335; Star Ins. Co. v. Cedar Valley Express, LLC,
273 F. Supp. 2d 38, 41 (D.D.C. 2002). The Court has jurisdiction over this interpleader action
under the provisions of 28 U.S.C. § 1335(a) because, as alleged in the pleadings, there exists
diversity of citizenship between at least two of the Defendants, Am. Compl. ¶ 2, and the penal
sum of the Bond against which all Defendants assert adverse claims is $10,000, a sum in excess
of $500, Am. Compl. ¶ 3. Furthermore, Plaintiff, at the time of filing its Complaint, filed a
motion for leave to deposit $10,000 into the Registry of this Court. See Pl.’s Mot. for Leave to
3 Deposit Funds into the Registry of the Court, ECF No. [2].1
A Court has broad discretion to order interpleader relief as an equitable remedy designed
to achieve an orderly distribution of a limited fund. See Star Ins. Co., 273 F. Supp. 2d at 40.
Where a court grants interpleader relief, the plaintiff may be discharged from further court
proceedings, provided the plaintiff does not assert an interest in the distribution of the disputed
property. 28 U.S.C. § 2361. Normally, an interpleader action is concluded in two stages, the
first determining that the statutory requirements are met and relieving the plaintiff from liability,
and the second adjudicating the adverse claims of the defendant claimants to the disputed
property. However, this bifurcation is not mandatory. New York Life Ins. Co. v. Connecticut
Dev. Auth., 700 F.2d 91, 95 (2d Cir. 1983). Where, as here, no defendant enters an appearance
in the action, their subsequent defaults “d[o] not make the interpleader action inappropriate but
merely expedite its conclusion by obviating the normal second stage.” Id. at 95. See also Gulf
Coast Galvanizing, Inc. v. Steel Sales, Co., Inc., 826 F. Supp. 197, 203 (S.D. Miss. 1993) (“The
failure of a named interpleader defendant to answer the interpleader complaint and assert a claim
to the res can be viewed as forfeiting any claim of entitlement that might have been asserted.”)
(citation omitted).
Federal Rule of Civil Procedure 55 provides that the Clerk of the Court must enter a
party’s default “[w]hen 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.” FED. R.
CIV. P. 55(a). Upon entry of a default by the clerk, the well-pleaded allegations in the complaint
1 On May 9, 2012, the Court issued an Minute Order denying without prejudice Plaintiff’s [2] Motion for Leave to Deposit Funds into the Registry of the Court, and indicating that Plaintiff could renew its motion after it filed proof of service as to all Defendants. See Min. Order (May 9, 2012). While Plaintiff at no point renewed its motion, depositing the value of the Bond into the Registry of the Court is no longer necessary in light of Defendants’ failure to plead or otherwise defend in this action, and by operation of the decision rendered by the Court today. 4 are deemed admitted. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir.
2011). Thereafter, unless the claim is for a sum certain, the plaintiff must apply to the court for a
default judgment. FED. R. CIV. P. 55(b). “The determination of whether default judgment is
appropriate is committed to the discretion of the trial court.” Int’l Painters & Allied Trades
Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57 (D.D.C. 2008) (citing
Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)).
Where, as here, there is a complete “absence of any request to set aside the default or
suggestion by the defendant that it has a meritorious defense, it is clear that the standard for
default judgment has been satisfied.” Auxier Drywall, 531 F. Supp. 2d at 57 (internal quotation
marks omitted). The Clerk of the Court entered default for each Defendant in this action, and the
factual allegations in the Complaint are therefore taken as true. See Int’l Painters, 239 F. Supp.
2d at 30. Further, the Court finds that Plaintiff’s Amended Complaint sufficiently alleges facts
to support its claims. Accordingly, Plaintiff is entitled to a default judgment discharging it of all
liability to the Defendants under the Bond. See Jenkens & Gilchrist v. Groia & Co., 542 F.3d
114, 119-24 (5th Cir. 2008) (default judgment is available in interpleader actions), cert. denied
sub nom Felderhof v. Jenkens & Gilchrist, 129 S. Ct. 1585 (2009).
III. CONCLUSION
For all of the foregoing reasons, the Court shall GRANT Plaintiff’s [27], [28], [29], [30],
[31], and [35] Motions for Default Judgment. An appropriate Order accompanies this
Memorandum Opinion.
Date: December 9, 2012 _____/s/______________________
COLLEEN KOLLAR-KOTELLY United States District Judge