Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_05-cv-00486/USCOURTS-azd-4_05-cv-00486-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

El Paso Natural Gas Company, a Delaware

corporation, 

Plaintiff, 

vs.

Ductos de Nogales, L.L.C. a Nevada

limited liability company; et al., 

Defendants. 

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No. CIV 05- 486 TUC CKJ (GEE)

REPORT AND RECOMMENDATION

Pending before the court is a motion for default judgment filed on December 6, 2005,

by the plaintiff, El Paso Natural Gas Company. [doc. #15]

The plaintiff, El Paso Natural Gas Company (El Paso), filed this action claiming

breach of contract and breach of guaranty. El Paso avers it entered into an agreement to

construct a natural gas pipeline and meter station for the defendants’ benefit. El Paso alleges

it performed its obligations under the contract but the defendants did not tendered payment

as agreed. The defendants, Cumming Gas Transmission, L.L.C. and Dwight H. Cumming

(collectively, the Cumming defendants) filed an answer and counterclaim. They allege El

Paso failed to complete the project on time or within budget. The defendant, Ductos de

Nogales, L.L.C., was served but has not yet appeared.

Case 4:05-cv-00486-CKJ Document 42 Filed 05/23/06 Page 1 of 3
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 The case has been referred to Magistrate Judge Edmonds for all pretrial matters

pursuant to Local Civil Rule 72.2. Rules of Practice of the U.S. District Court for the District

of Arizona. 

Discussion

The complaint was served on the defendant, Ductos de Nogales, L.L.C. (Ductos), on

August 18, 2005. Ductos did not answer or file a responsive pleading. Accordingly, El Paso

moved for entry of default pursuant to Rule 55(a). FED.R.CIV.P. The clerk entered default

on November 22, 2005. 

On December 6, 2005, El Paso filed the instant motion for default judgment. On April

27, 2006, the court ordered El Paso to file a supplement to its motion addressing the

relevance, if any, of the following cases: Frow v. De La Vega, 82 U.S. (15 Wall.) 552, 21

L.Ed. 60 (1872) and In re First T.D. & Inv., Inc., 253 F.3d 520, 532 (9th Cir. 2001).

In Frow, the Supreme Court held that, in a case against jointly liable defendants, the

court should not issue judgment against a defaulting defendant until the case is resolved

against the remaining defendants. Frow v. De La Vega, 82 U.S. 552 (1872). If the default

judgment issued and the remaining defendants won a judgment on the merits, the court would

have issued mutually contradictory judgments. Id. According to the Court, “[s]uch a state

of things is unseemly and absurd, as well as unauthorized by law.” Id. at 554. The rule in

Frow was applied by the Ninth Circuit in In re First T.D. & Inv., Inc., 253 F.3d 520, 532 (9th

Cir. 2001).

On May 16, 2006, El Paso filed a supplemental brief in support of its motion. In

accordance with Frow, it moves that this court issue an order stating that default has been

entered against Ductos and accordingly it “has no standing in this matter and is prohibited

from introducing evidence, being heard at the final hearing or otherwise appearing in any

way.” See Frow, 82 U.S. at 554. It further moves that this court reserve judgment on the

motion for default judgment until judgment is issued against the remaining defendants. 

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El Paso’s motion is supported by the record and is in accordance with the rule

announced in Frow. Id.

Recommendation

 The Magistrate Judge recommends the District Court, after its independent review of

the record, enter an order 

GRANTING IN PART the motion for default judgment filed on December 6, 2005,

by the plaintiff, El Paso Natural Gas Company. [doc. #15] The Clerk of the Court has

entered default against the defendant, Ductos. Accordingly, this defendant has no standing

in this matter and is prohibited from introducing evidence, being heard at the final hearing

or otherwise appearing in any way. The remainder of the motion should be DENIED without

prejudice as UNRIPE. It may be refiled if, and when, judgment issues against the remaining

defendants.

Pursuant to 28 U.S.C. §636 (b), any party may serve and file written objections within

10 days of being served with a copy of this report and recommendation. If objections are

not timely filed, the party’s right to de novo review may be waived. See United States v.

Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir.2003) (en banc). 

The Clerk is directed to send a copy of this report and recommendation to all parties.

DATED this 23rd day of May, 2006.

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