U.S. v. SCHARRINGHAUSEN

JUDITH KEEP, District Judge

Presently before the court is plaintiff the United States of America's motion for entry of default judgment, filed on October 21, 2003. Defendant Robert Michael "Buzz" Scharringhausen has not filed an opposition to the motion for entry of default judgment. Plaintiff is represented by counsel. Defendant has not yet appeared before the court in this action.

A. Legal Standard

Under Rule 55 of the Federal Rules of Civil Procedure, a court may enter judgment by default. See F.R.C.P. 55(b)(2). The Ninth Circuit has stated that when "exercising discretion as to the entry of a default judgment," district courts may consider the following factors: "(1) the possibility of prejudice to the plaintiff[;] (2) the merits of the plaintiff's substantive claim[;] (3) the sufficiency of the complaint[;] (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect[;] and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits." Eitel v. McCool. 782 F.2d 1470, 1471-1472 (9th Cir. 1986) (citations omitted).

Plaintiff asks this court to enter default judgment in favor of itself, the government, and against defendant Scharringhausen in the amount of $488,307.96, together with interest calculated from November 1, 2003, See Second motion for entry of default judgment at 5. According to the government, $488,307.96 constitutes the total amount of taxes, penalties, and interest that defendant owes to the United States as of October 31, 2003. See id. The following chart explicates the breakdown of monies allegedly owed by defendant to the United States:

Tax Period Tax Type Total Assessed Interest Accrued Penalty Accrued Total Due 1991 income 8,307.85 9,950.26 884.43 19,142.54 1992 income 1,529.15 433.84 171.50 2,134.49 12/31/90 trust fund 146,579.89 185,657.15 0.00 332,236.61 9/30/91 trust fund 59,469.89 75,324.43 0.00 134,794.32 TOTALS 215,886.35 271,365.68 1,055.93 488,307.96 id.

The government previously moved for entry of default judgment, which this court denied without prejudice in an order dated September 23, 2003. At that point, the court could not enter default for the amount requested because the government failed to provide documentation regarding accruals for 1991 and 1992 or documentation of the trust fund tax and interest assessments and accruals for 12/31/90 and 9/30/91. Essentially, this court found that plaintiff's exhibits were insufficient in documenting plaintiff's default judgment request.

The government has rectified this concern in its second motion for entry of default judgment. Attached to the second motion are Certificates of Assessments and Payments (Form 4340's) for income assessments made in 1991 and 1992 as well as trust fund recovery penalties made in 1990 and 1991. See Deel, of Norma Schrock, Ex. A-D. These also show the interest and penalty assessed for all relevant time periods. The government also provided adequate documentation regarding the accrual of interest and penalties both for the income tax and trust fund recovery penalties by providing the computation tables used to formulate the amount.

The government has thus provided sufficient documentation of: (1) the money at stake and (2) continual service and notification to Defendant (both of this suit and of his tax liabilities over the years). This documentation demonstrates the merits of Plaintiff's claim and makes the possibility of any dispute concerning material facts negligible, at best. There is no reason for this court to believe that Defendant's default is to excusable neglect. For these reasons, this court GRANTS Plaintiff's motion for entry of default judgment.

For the foregoing reasons, the court GRANTS the United States' motion for default judgment in the total amount of $488,307.96, together with interest, determined in accordance with the laws of the United States, from the date of November 1, 2003. This court hereby ORDERS the clerk of the court to enter a judgment by default against the Defendants in accordance with this order, as allowed by Fed. Rule Civ. P. 55. IT IS SO ORDERED.