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Ohntrup v. Gallagher

August 27, 2007


The opinion of the court was delivered by: Tonianne J. Bongiovanni United States Magistrate Judge


Presently before the Court is a Motion of Defendant/Third Party Plaintiffs Bryan Gallagher and Bryan's Quality Plus, Inc.'s (hereinafter "Gallagher") for Default Judgment against Third Party Defendant Armco Construction Company ("Armco"). The Court notes that Plaintiff's claims against Gallagher and Armco have been settled. The parties have consented to the jurisdiction of this Court pursuant to 28 U.S.C. § 636 (c) and FED.R.CIV.P. 73. The Court has considered this matter without oral argument pursuant to FED.R.CIV.P. 78, and for the reasons set forth below, the motion will be GRANTED.


The underlying case involves a subrogation claim for property damage to the fishing vessel Gin and Tonic sustained when it was involved in an allision with a submerged object in the back bay of Avalon, New Jersey, near 21st Street. On October 16, 2003, Plaintiffs filed the instant action against Gallagher, for reimbursement for property damages and loss of business sustained as a result of the August 22, 2000 accident. (Docket Entry No. 1). On April 21, 2005, Gallagher filed a Third Party Complaint against Armco seeking contribution pursuant to the New Jersey Joint Tortfeasors' Contribution Act and a claim for breach of contract. (Id. at Docket Entry No. 8). Armco filed its Answer on June 8, 2005, with crossclaims for contribution, common-law indemnification, contractual indemnification and breach of contract. (Id. at Docket Entry No. 12). On June 13, 2007, the Court granted a Motion by Joseph Deal, Esq., to withdraw as counsel for Armco in this matter. (Docket Entry No. 30). In It's June 13, 2007 Order, the Court mandated that Armco retain new counsel no later than June 27, 2007, and noted that failure to retain counsel could result in the imposition of sanctions, including default judgment. (Id.) To date, no new counsel has entered an appearance, and neither the Court nor Gallagher have heard from Armco.

On July 25, 2007, the parties submitted a stipulation dismissing all claims and cross claims, except Gallagher's breach of contract claim against Armco. (Docket Entry No. 31). Gallagher now moves to have default judgment entered against Armco on his breach of contract claim.


For a detailed recitation of the factual background of this matter, the Court refers the parties to Its September 26, 2006 Opinion and Order. In November 1999 Gallagher and Armco entered into a charter agreement wherein Gallagher agreed to rent a barge to Armco for $1,500.00 per month. Armco agreed to maintain the barge, and to name Quality Plus as an additional insured. During the course of the charter, Gallagher had access to and was still capable of using his barge. Gallagher alleges that during the course of the charter Armco damaged its barge, including the spud well. The alleged damage included tearing off the spud well, damaging the side of the barge and cutting the spud. Gallagher demanded that Armco repair the spud well and barge; however, the spud well repair was done poorly, and the side of the barge was not repaired at all. In April 2000 when the charter ended, Gallagher took possession of the barge with what Gallagher believed to be damage to the spud well. Gallagher did not do anything to repair the allegedly damaged spud well from April to August 2000. Gallagher was not concerned that the spud well would fall off of the barge and felt that the barge was seaworthy to do certain jobs, including excavation work.

On August 3, 2000, Armco contracted with Gallagher to excavate high spots in the Avalon Anchorage caused by Armco's dredging. The contract called for payment of $2,500.00 per day for a minimum of three days, as well as $1,500.00 owed to Gallagher for prior work. After approximately three hours on the job, Gallagher's crew was asked by Armco to leave because the barge was not in operating condition, the equipment and men were not qualified to do the job, and they failed to provide a certificate of insurance. Gallagher asserts that his crew was qualified and equipment was up to the required specifications to meet his obligations under the contract. Gallagher is unsure of whether the spud well was on his barge on August 3, 2000, and does not know when the spud well came off of the barge. No payment was made by Armco to Gallagher on either provision of the August 3, 2006 agreement.


1. Standard of Review

Federal Rule of Civil Procedure 55(a) provides that default judgment may be entered against a party that has "failed to plead or otherwise defend." FED.R.CIV.P. 55(a)(West 2007). Rule 55(b) allows the Court to enter a judgment by default upon application of a party. FED.R.CIV.P. 55(b)(West 2007). The Third Circuit has held that the "or otherwise defend" clause is "broader than the mere failure to plead." Hoxworth v. Blinder, Robinson & Co., Inc., 980 F.2d 912, 917 (3d Cir. 1992). The Hoxworth Court also suggested that default judgment can be imposed for failure to comply with a court's orders to retain substitute counsel, file a pretrial memorandum, or respond to discovery requests. Id. at 918. Courts have also entered a default judgment against a party who has failed to appear at a conference subsequent to filing an answer. See e.g. Chanel, Inc. v. Craddock, 05-1593-HAA, 2006 WL 469952 (D.N.J. Feb. 27, 2006).

When considering whether the imposition of a default judgment is appropriate, a court must consider the factors outlined in Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984). Hoxworth, 980 F.2d at 919 (citing Poulis, 747 F.2d at 868). Under a Poulis analysis, the Court must balance the following factors: (a) the extent of the party's personal responsibility, (b) prejudice to the adversary, (c) a history of dilatoriness, (d) whether the conduct of the party was willful or in bad faith, (e) the effectiveness of sanctions other than dismissal and (f) the meritoriousness of the claim or defense. Poulis, 747 F.2d at 868. It is necessary for the court to weigh each factor and make factual findings considering each individually; however, a court is not required to demonstrate that all factors point to a default to render a sanction appropriate. Hoxworth, 980 F.2d at 919.

2. Application of Poulis Factors

The Court is persuaded that Defendant's conduct satisfies the Poulis factors and that Default ...

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