Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_14-cv-00294/USCOURTS-alsd-1_14-cv-00294-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

ZURICH AMERICAN INSURANCE )

COMPANY, )

Plaintiff, )

)

v. ) Civil Action No. 14-00294-WS-N

)

BULLDOG MARINE, INC., et al., )

Defendants. )

REPORT AND RECOMMENDATION

Pending before the Court is the Motion for Entry of Default (Doc. 41) filed by 

Plaintiff Zurich American Insurance Company (“Zurich”). “Pursuant to Federal 

Rule of Civil Procedure 55(a),” Zurich “moves this Court to direct the Clerk to enter 

default against” Defendants Brian Hall and Brenda Hall (hereinafter, “the Halls”) 

and Defendants Bulldog Marine, Inc., Bulldog Marine, LLC, Blacktip Partners, Inc., 

and Blacktip Marine Partners, LLC (hereinafter, “Bulldog” and “Blacktip,” 

respectively), all proceeding pro se in this action, due to their “failures to appear, 

retain counsel and otherwise defend in this action.” Upon consideration of the 

matter, the undersigned Magistrate Judge enters this recommendation in 

accordance with 28 U.S.C. § 636(b)(1)(B)-(C) and Federal Rule of Civil Procedure 

72(b).

By Order dated and entered October 27, 2014 (Doc. 45), the undersigned set 

forth a detailed procedural history of this action, noting multiple violations of Court 

Orders by the Halls, Bulldog, and Blacktip, as well as their overall failure to defend 

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or participate in this action following withdrawal of their previous counsel. As such, 

the undersigned ordered those parties “to SHOW CAUSE in writing, to be filed 

with the Court no later than Monday, November 17, 2014, why they should not 

be sanctioned” for the reasons set forth in the Order and were expressly warned 

that “[f]ailure to show cause as ordered...will result in the entry of a 

recommendation to the District Judge under 28 U.S.C. § 636(b)(1)(B)-(C) that their 

Answer (Doc. 10) be stricken and Zurich’s Motion for Entry of Default (Doc. 41) be 

granted.” (Id. at 9-10). The undersigned directed the Clerk of Court to serve copies 

of the October 27, 2014 Order on the Halls, Bulldog, and Blacktip by both regular 

and certified mail at their addresses of record. (Id. at 10). 

The Order was served on the Halls at their current address of record in 

Jacksonville, Florida, on October 31, 2014. (See Docs. 46-47). The mail to Bulldog 

and Blacktip was returned as undeliverable to their current address of record (see

Doc. 48). However, Bulldog and Blacktip had previously accepted service at this 

address (see Docs. 29-32), and there is no record of any attempt by these defendants 

to provide the Court with new contact addresses.1 To date, the Halls, Bulldog, and 

Blacktip have not shown cause as ordered on October 27, 2014.

 1 See SD ALA Local Rule 83.9(b)-(c) (“All litigants proceeding pro se shall be bound by and 

comply with all local rules of this Court, and the Federal Rules of Civil and Criminal 

Procedure, unless otherwise excused from operation of the rules by court order... Any 

person proceeding in this Court pro se shall, at all times during the pendency of the action 

to which he or she is a party, keep the court informed of his or her current address and 

telephone number, and shall promptly inform the court of any change in such address. A 

party's failure to comply may result in the dismissal of the party's action for failure to 

prosecute and obey the rules of this Court.”).

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“[A] district court need not tolerate defiance of reasonable orders.” Equity 

Lifestyle Props., Inc. v. Fla. Mowing & Landscape Serv., Inc., 556 F.3d 1232, 1241 

(11th Cir. 2009). “District courts have broad discretion under the Federal Rules of 

Civil Procedure to impose sanctions for failure to comply with court orders.” Fla. 

Power & Light Co. v. Allis Chalmers Corp., 85 F.3d 1514, 1521 (11th Cir. 1996). 

Federal Rule of Civil Procedure 37(b)(2)(A) provides: “If a party or a party’s officer, 

director, or managing agent...fails to obey an order to provide or permit discovery, 

including an order under Rule 26(f),...the court where the action is pending may 

issue further just orders[,]” which “may include...striking pleadings in whole or in 

part;...[or ]rendering a default judgment against the disobedient party...” Under 

Federal Rule of Civil Procedure 16(f), “[o]n motion or on its own, the court may issue 

any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or 

its attorney...fails to appear at a scheduling or other pretrial conference...or...fails 

to obey a scheduling or other pretrial order.” In addition, “[a] court may impose 

sanctions for litigation misconduct under its inherent power[,]” which “derives from 

the court's need to manage its own affairs so as to achieve the orderly and 

expeditious disposition of cases.” Eagle Hosp. Physicians, LLC v. SRG Consulting, 

Inc., 561 F.3d 1298, 1306 (11th Cir. 2009) (quotation omitted).

Eleventh Circuit caselaw is clear that entering default judgment under Rule 

37(b) is a severe sanction requiring a finding of willfulness or bad faith failure to 

comply. See Coquina Investments v. TD Bank, N.A., 760 F.3d 1300, 1319 (11th Cir. 

2014); BankAtlantic v. Blythe Eastman Paine Webber, Inc., 12 F.3d 1045, 1049 (11th 

Cir. 1994). “Violation of a discovery order caused by simple negligence, 

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misunderstanding, or inability to comply will not justify a Rule 37 default judgment...” 

BankAtlantic, 12 F.3d at 1049 (quotation omitted).

Similarly, a court’s inherent power to impose sanctions for litigation misconduct 

“ ‘must be exercised with restraint and discretion.’ ” Eagle Hosp., 561 F3d at 1306 

(quoting Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980)). “ ‘The key to 

unlocking a court's inherent power is a finding of bad faith.’ ” Id. (quoting Barnes v. 

Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998)). “The ‘[d]ismissal of a party's complaint 

or answer, or striking its defenses, as a sanction ... is a heavy punishment,’ appropriate 

‘only as a last resort, when less drastic sanctions would not ensure compliance with the 

court's orders.’ ” Id. (quoting In re Sunshine Jr. Stores, 456 F.3d 1291, 1305-06 (11th 

Cir. 2006)).

The Eleventh Circuit has cautioned that

[c]ourts must afford a sanctioned party due process...in determining the 

bad faith required to invoke the court's inherent power to impose 

sanctions... In re Mroz, 65 F.3d 1567, 1575 (11th Cir. 1995) (citing 

Chambers, 501 U.S. at 49, 111 S. Ct. at 2135). “Due process requires that 

the [party] be given fair notice that [its] conduct may warrant sanctions 

and the reasons why.” Id. (citing Donaldson v. Clark, 819 F.2d 1551, 1559-

60 (11th Cir. 1987)). Importantly, a party can be given notice from either 

the court or from the party seeking sanctions. Id. The party subject to 

sanctions must be afforded the opportunity to justify its actions either 

orally or in writing.

In re Sunshine Jr. Stores, 456 F.3d at 1306-07.

As explained in greater detail in the October 27, 2014 Order to Show Cause

(Doc. 45), the undersigned finds that the failure of the Halls, Bulldog, and Blacktip 

to participate in this action and obey the Court’s Orders warrants sanctions. 

Moreover, the undersigned finds that the Halls, Bulldog, and Blacktip have been 

given fair notice that their conduct warrants sanctions. In particular, the Halls 

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have been warned twice by the undersigned that their failure to comply with the 

Court’s directives could result in sanctions, including the entry of judgment against 

them (see Docs. 38, 45). While Bulldog and Blacktip apparently did not receive the 

undersigned’s October 27, 2014 Order to Show Cause (see Doc. 48), they were 

expressly cautioned that, “because they cannot defend this action pro se, failure to 

obtain counsel could result in entry of judgment against them in this action.”2 (Doc. 

22 at 3).

Therefore, the undersigned RECOMMENDS that the Answer (Doc. 10) filed 

by all Defendants be STRICKEN as to Defendants Brian Hall, Brenda Hall, 

Bulldog Marine, Inc., Bulldog Marine, LLC, Blacktip Partners, Inc., and Blacktip 

Marine Partners, LLC (but not as to Defendant Pedro E. Baez (see id. at 10 n.4)) 

and that Zurich’s Motion for Entry of Default (Doc. 41) be GRANTED.

Notice of Right to File Objections

A copy of this report and recommendation shall be served on all parties in the 

manner provided by law. Any party who objects to this recommendation or 

anything in it must, within fourteen (14) days of the date of service of this 

document, file specific written objections with the Clerk of this Court. See 28 U.S.C. 

§ 636(b)(1); FED. R. CIV. P. 72(b); S.D. ALA. L.R. 72.4. In order to be specific, an 

objection must identify the specific finding or recommendation to which objection is 

made, state the basis for the objection, and specify the place in the Magistrate 

Judge’s report and recommendation where the disputed determination is found. An 

 2 Moreover, though denied by the Defendants in their Answer (see Doc. 10 at 1-2), Zurich 

has alleged that the Halls are managing members and/or officers of Bulldog and Blacktip 

(see Doc. 8 at 2-4).

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objection that merely incorporates by reference or refers to the briefing before the 

Magistrate Judge is not specific.

DONE this the 20th day of November 2014.

/s/ Katherine P. Nelson

KATHERINE P. NELSON

UNITED STATES MAGISTRATE JUDGE

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