United States District Court, E.D. Virginia, Norfolk Division
OPINION AND ORDER
G. Doumar Judge.
matter comes before the Court upon Dawn Adams'
("Plaintiff) Motion for Default Judgment as to liability
against defendant Applied Business Security, Inc. d/b/a
Security Collection Agency ("SCA"). ECF No. 11. For
the reasons set forth below, Plaintiffs motion is STAYED
pending resolution of Plaintiffs case on the merits against
defendant Equifax Information Services, LLC
filed the instant lawsuit on October 6, 2017. ECF No. 1. Her
complaint seeks actual, statutory and punitive damages and
attorneys' fees and costs against SCA and Equifax for
alleged violations of the Fair Credit Reporting Act
("FCRA"), 15 U.S.C. § 1681, et seq.,
as well as actual and punitive damages and costs against SCA
for alleged defamation under Virginia law. Id. On
November 2, 2017, Equifax filed its answer and defenses to
Plaintiffs complaint. ECF No. 5. However, SCA has yet to file
an answer or otherwise appear in this lawsuit.
record of this case shows that SCA was properly served
process pursuant to Rule 4 of the Federal Rules of Civil
Procedure and Section 8.01-329 of the Virginia Code via
service upon the Secretary of the Commonwealth whose
Certificate of Compliance was docketed on October 19, 2017.
See ECF No. 4. When SCA failed to answer or otherwise appear
within twenty-one days of such service, Plaintiff asked the
Clerk to enter default as to SCA pursuant to Rule 55(a) of
the Federal Rules of Civil Procedure. ECF No. 8. On November
11, 2017, the Clerk entered default as to SCA as requested.
ECF No. 9.
January 10, 2018, Plaintiff filed the instant motion for
default judgment as to liability against SCA ("Motion
for Default Judgment") pursuant to Rule 55(b) of the
Federal Rules of Civil Procedure ("Rule 55(b)").
ECF No. 11. To date, SCA has not responded. Plaintiffs Motion
for Default Judgment is now before the Court.
seeks entry of default judgment as to liability against SCA,
one of the two named defendants in this case, and indicates
that Plaintiff will "seek a trial by jury on the issues
of damages to be awarded against [SCA]" after such
judgment is entered. ECF No. 11 at 1. Rule 54(b) of the
Federal Rules of Civil Procedure authorizes the Court to
enter final judgment as to fewer than all named defendants in
a lawsuit following an express determination that "there
is no just reason for delay." Fed.R.Civ.P. 54(b). The
question now before the Court is whether the possibility of
inconsistent judgments in the instant action constitutes a
"just reason" to delay entry of default judgment
against SCA. See Phoenix Renovation Corp. v. Gulf Coast
Software. Inc.. 197 F.R.D. 530 (E.D. Va. 2000). For the
reasons below, the Court finds that it does.
Frow Rule and Its Progeny
Supreme Court first addressed this issue in Frow v. De La
Vega. 82 U.S. 552 (1872). In Frow. the
plaintiff alleged that several defendants jointly conspired
to defraud him. The trial court entered default judgment
against one defendant, Frow, who failed to appear, but
subsequently found in favor of the remaining defendants who
appeared and litigated the case on the merits. On appeal, the
Supreme Court condemned these inconsistent judgments as
"unseemly and absurd" and ultimately vacated the
default judgment against Frow. Id. at 554.
the adoption of Rule 54(b), many jurisdictions have construed
the Frow rule to apply only to situations of
"true joint liability" among defendants. See
Phoenix Renovation Corp., 197 F.R.D. at 583
(collecting cases). However, the Fourth Circuit has
interpreted Rule 54(b) to extend the holding of Frow
to situations where defendants' liability is joint and/or
several or otherwise closely interrelated. U.S. for Use
of Hudson v. Peerless Ins. Co., 374 F.2d 942, 944-45
(4th Cir. 1967). Therefore, in light of Peerless
Insurance, this Court has consistently avoided entry of
default judgment against one defendant where there is a risk
of unavoidable inconsistency with a later judgment with
respect to other defendants. See, e.g., Phoenix
Renovation Com.. 197 F.R.D. at 583; Jefferson v.
Briner. Inc.. 461 F.Supp.2d 430, 436 (E.D. Va. 2006);
Southern Bank and Trust Co. v. Prosperity Beach.
LLC. No. 2:14cv270, 2014 WL 4976598 (E.D. Va. 2014).
order to determine whether the Frow rule should
apply in the instant case, a brief summary of ...