Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-4_21-cv-00618/USCOURTS-ared-4_21-cv-00618-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal- Declaratory Judgement

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IN THE UNITED ST ATES DISTRICT COURT 

EASTERN DISTRICT OF ARKANSAS 

CENTRAL DIVIVSION 

WITT CARIBBEAN, LLC 

v. No. 4:21-cv-618-DPM 

PLAINTIFF/ 

COUNTERDEFENDANT 

ATLYS GLOBAL, LLC DEFENDANT/ 

v. 

WITT GLOBAL PARTNERS, LLC; 

WITT GLOBAL PARTNERS FUND I, L.P.; 

COUNTERPLAINTIFF/THIRDP ARTY PLAINTIFF 

WITT GLOBAL PARTNERS CAPITAL, LLC, 

dfb/a WGP Capital; WITT GLOBAL PARTNERS 

ASSET MANAGEMENT, LLC; WITT GLOBAL 

PARTNERS GP-I, LLC; WITT CORP; 

AG WITT, LLC; JOHN DOE CORPORATIONS, 

Witt Affiliated Companies; JAMES LEE WITT; 

ROD SWEETMAN; and WILLIAM (BILL) RILEY THIRD-PARTY 

DEFENDANTS 

ORDER 

1. This is a dispute about the formation, management, and 

probable dissolution of AG Witt, LLC, a third-party defendant. Witt 

Caribbean, LLC, and Atlys Global, LLC, formed AG Witt in September 

2019. They formed the company to provide emergency management 

and natural disaster consulting to governmental entities for profit. 

Case 4:21-cv-00618-DPM Document 50 Filed 08/19/22 Page 1 of 5
James Lee Witt, Rod Sweetman, and Bill Riley had the business know 

how; their many Witt Global Partners, LLC-related entities (some or all 

of which are counter and third-party defendants in this case) were 

already up and running in the industry. Atlys had the money, or access 

to it, and intended to finance the new company for a fifty-percent stake. 

Atlys says it and Witt Caribbean were the only two members of AG 

Witt, each with an equal ownership share. Atlys alleges that Witt, 

Sweetman, and Riley made unauthorized cash distributions from AG 

Witt to themselves and to other Witt-related entities, plus failed to 

make good on their promise to contribute the bulk of the other Wittrelated entities' business to AG Witt. 

In May 2021, Witt Caribbean sued Atlys in Arkansas state court 

for declaratory relief. The complaint sought the dissolution of AG Witt 

and a court-supervised winding up of the business. Atlys removed the 

case here, answered, and counterclaimed against Witt Caribbean. Atlys 

also sued many Witt-related entities and Witt, Sweetman, and Riley for 

breach of contract, securities fraud, fraud, negligent misrepresentation, 

breach of fiduciary duty, and accounting-related claims. Witt 

Caribbean and the individual and still-existing corporate third-party 

defendants - including Witt Global Partners, LLC, and AG Witt (the 

parties' joint venture)-waived service. Witt Caribbean answered the 

counterclaims against it. Witt, Sweetman, and Riley answered the 

claims against them. Witt Global Partners and AG Witt did not answer 

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Case 4:21-cv-00618-DPM Document 50 Filed 08/19/22 Page 2 of 5
or otherwise respond to the third-party complaint. No default was 

sought from the Clerk of Court. Instead, Atlys has moved for a default 

judgment against Witt Global Partners and AG Witt. Witt Global 

Partners responded to the motion and answered, approximately five 

months late. AG Witt has not appeared. 

The best practice is to seek a Clerk's default before moving for a 

default judgment. Fed. R. Civ. P. 55(a); Johnson v. Dayton Electric 

Manufacturing Co., 140 F.3d 781, 783 (8th Cir. 1998). But no useful 

purpose would be served by deciding Atlys' s motion on this technical 

basis. The Court therefore construes Doc. 42 as a combined motion for 

default and default judgment. The Court directs the Clerk to update 

the docket to reflect the Court's construction. 

2. As to Witt Global Partners, the motion is denied. This 

Court's preference is to rule on the merits. Oberstar v. F.D.I.C., 987 F.2d 

494,504 (8th Cir. 1993). Witt Global Partners was negligent in failing to 

answer the claims against it, but there is nothing in the record to 

indicate that it did so intentionally or for some strategic benefit. Union 

Pacific Railroad Co. v. Progress Rail Services Corp., 256 F.3d 781, 782-83 

(8th Cir. 2001). The Court has reviewed Witt Global Partners's answer. 

It contains a meritorious defense. And Atlys will not be prejudiced by 

a delayed answer. The case has been progressing in due course against 

the non-defaulting defendants, and plenty of time is left for discovery 

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Case 4:21-cv-00618-DPM Document 50 Filed 08/19/22 Page 3 of 5
before the scheduled trial date in February 2024. The Court deems Witt 

Global Partners' s answer timely filed. 

3. As to AG Witt, the issues are more tangled, but the motion 

is also denied. AG Witt is named as a third-party defendant in the style 

of Atlys' s third-party complaint. But, insofar as the Court can tell, no 

clear claim against AG Witt appears. Atlys says that it has pressed an 

equitable accounting claim against AG Witt in count IX of its thirdparty complaint. Doc. 43 at 1 23. The Court does not see it. While 

counsel for Witt Caribbean waived service for AG Witt, they now 

recognize that the parties' stalemate about that entity-whether it 

exists, and who controls it, among other things - presents some 

difficulties in anyone responding on the joint venture' s behalf. AG 

Witt, though, is the hub around which the parties' dispute turns. And 

both sides need to give attention to the joint venture' s proper place in 

this case sooner rather than later. Given the lack of a current claim 

against AG Witt, the Court intends to dismiss the joint venture on 

30 September 2022 unless some party proposes an amended pleading 

before then that brings that company into the case in an appropriate 

posture. 

* * * 

Atlys' s combined motion for default and default judgment, 

Doc. 42, is denied. 

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Case 4:21-cv-00618-DPM Document 50 Filed 08/19/22 Page 4 of 5
So Ordered. 

D .P. Marshall Jr. 

United States District Judge 

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