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United States v. Bly

United States District Court, E.D. Virginia, Alexandria Division

November 18, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
DARIUS BLY and DARIUS BLY d/b/a SETTLES TURF FARM, Defendant.

          REPORT & RECOMMENDATION

          Michael S. Nachmanoff United States Magistrate Judge

         This matter is before the Court on Plaintiff's Motion for Default Judgment (Dkt. No. 8). Having reviewed the record, the undersigned Magistrate Judge recommends that the Court enter default judgment against Defendant in the total amount of $189, 937.77, plus statutory additions to tax that will continue to accrue until full payment is made.

         I. Procedural Background

         On July 14, 2016, Plaintiff United States of America filed this action to collect federal taxes from Defendant Darius Bly and Darius Bly d/b/a Settles Turf Farm. See Compl. (Dkt. No. 1). Defendant was served on July 25, 2016 by a special process server. See Summons Returned Executed 2 (Dkt. No. 5). Defendant did not enter an appearance or otherwise respond to the Complaint and, on August 24, 2016, the Clerk entered default against Defendant. See Entry of Default (Dkt. No. 7). On October 5, 2016, Plaintiff filed the instant Motion for Default Judgment (Dkt. No. 8). Defendant failed to appear at the hearing on this Motion on November 4, 2016, and the undersigned Magistrate Judge took the matter under advisement. See Dkt. No. 11.

         II. Factual Background

         The following facts are established by the Complaint and by the memorandum, declaration, and exhibits submitted in support of Plaintiff's Motion for Default Judgment.

         Defendant filed Employer's Annual Federal Tax Return for Agricultural Employees (“Form 943”), establishing the amount of federal income and Federal Insurance Contribution Act taxes for tax periods ending in 2003 to 2011 and 2013 to 2015. Compl. ¶ 5 (Dkt. No. 1). Despite notice and demand for payment, as of June 27, 2016, Defendant owes Plaintiff $143, 926.05, plus statutory additions to tax that will continue to accrue according to law until full payment is made. Id. ¶ 6A.

         Defendant also filed income tax returns (“Form 1040”) for the years 2010 through 2014. Compl. ¶ 7 (Dkt. No. 1). Despite notice and demand for payment, as of June 27, 2016, Defendant owes Plaintiff $47, 116.91, plus statutory additions to tax that will continue to accrue according to law until full payment is made. Id. ¶ 8A.

         Together, Plaintiff is owed $191, 042.96 in unpaid taxes. Plaintiff also seeks an award of costs of prosecuting this action. Compl. ¶¶ 6B, 8B (Dkt. No. 1).

         III. Service of Process, Jurisdiction, and Venue

         The docket reflects that Defendant was properly served via a special process server. See Summons Returned Executed 2 (Dkt. No. 5). The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1340, respectively, as Plaintiff's claims arise under federal law and from an Act of Congress providing for internal revenue. Compl. ¶ 1. In addition, the Court has subject matter jurisdiction pursuant to 26 U.S.C. § 7402(a), as the United States moves for default judgment for the enforcement of the internal revenue laws. Id. The Court has personal jurisdiction over Defendant, who resides within the Eastern District of Virginia. Id. ¶ 4. Venue is proper under 28 U.S.C. §§ 1391 and 1396 because the Defendant's residence and tax liability, as well as a substantial part of the events or omissions giving rise to the claims against Defendant, occurred within the Eastern District of Virginia. Id. ¶ 2.

         IV. Legal Standard

         Default judgment is appropriate if the well-pled allegations of the complaint establish a plaintiff's entitlement to relief and the defendant has failed to plead or defend within the time frame contained in the rules. Fed.R.Civ.P. 55; Music City Music v. Alfa Foods, Ltd., 616 F.Supp. 1001, 1002 (E.D. Va. 1985). By defaulting, a defendant admits the plaintiff's well-pled allegations of fact, which then provide the basis for judgment. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (citing Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)); Partington v. Am. Int'l Specialty Lines Ins. Co., 443 F.3d 334, 341 (4th Cir. 2006) (default has the effect of admitting the factual allegations in the complaint). Here, as Defendant has not answered or otherwise timely responded, it has admitted the well-pled allegations of fact contained in the Complaint.

         V. ...


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