UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

ZOBELE MEXICO, S.A. DE C.V., Case No. 1:18-cv-596

Plaintiff,

Dlott, J.

v. Bowman, M.J.

TSS TECHNOLOGIES, INC.,

Defendant.

REPORT AND RECOMMENDATION

I. Background

Plaintiff initiated this breach of contract case on August 22, 2018, alleging that 

Defendant TSS Technologies failed to comply with its contractual obligations and further 

breached various express and implied warranties, resulting in compensatory damages to 

Plaintiff of “not less than $2,055,000.” (Doc. 1 at ¶¶37, 43). Initially represented by 

counsel, Defendant filed an answer to the complaint admitting that it entered into a 

contract with Plaintiff, but denying the characterization of the terms of the contract and 

any warranties, and otherwise denying any liability. (Doc. 13). This case has been 

referred to the undersigned for initial consideration and disposition of all pretrial and postjudgment matters, whether dispositive or not. (Doc. 7). 

On December 4, 2018, the undersigned convened a telephone pretrial conference 

and entered a calendar order. (Doc. 19). During that conference, defense counsel 

indicated that he would be filing a motion to withdraw; the motion was filed the same date 

and represents that Defendant terminated counsel’s services. (Doc. 20). Plaintiff filed a 

memorandum in response to counsel’s motion to withdraw, seeking a delay in granting 

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the motion until new counsel appeared, or alternatively, that Defendant “be deemed in 

default in this action” because a corporation may not appear in federal court except 

through an attorney. (Doc. 21, collecting cases). On December 6, 2018, the undersigned 

granted the motion to withdraw but directed Defendant to retain new counsel not later 

than December 21, 2018. (Doc. 22).

Regrettably, Defendant failed to comply with the December 6, 2018 Order. 

Therefore, on January 8, 2019, the undersigned issued an “Order to Show Cause” that 

expressly directed Defendant “to show cause, in writing, no later than January 30, 2019, 

why it has failed to retain new counsel as ordered by the Court.” (Doc. 23). The Clerk of 

Court served the copy of the Order to Show Cause on TSS Technologies, Inc. at the 

following address: TSS Technologies Inc., c/o Marc Drapp, CEO, 8800 Global Way, West 

Chester, OH 45069. The Court’s Order also warned Defendant that a “[f]ailure to comply 

with this Order may result in the undersigned issuing a Report and Recommendation 

recommending that Defendant be found to be in default.” (Id.)

Defendant has failed to comply with the Order to Show Cause. As noted, Plaintiff 

expressly objected to the prior withdrawal of counsel and asked that the Defendant be 

deemed to be in default. The undersigned declined to place Defendant in default at that 

time and instead granted Defendant ample time to retain new counsel. 

II. Analysis

More than two months have now passed without Defendant retaining new counsel, 

during which Defendant has ignored two Orders directing it to do so. Compare Pecarsky 

v. Galaxiworld.com Ltd., 249 F.3d 167(2nd Cir.2001) (court abused its discretion when it 

required corporate defendant whose counsel had withdrawn to find new counsel in less 

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than one week). Defendant’s failure to retain new counsel is inexplicable, and warrants 

the entry of default under Rule 55(a).

It is well settled that a corporation cannot appear in federal court except through 

an attorney. Rowland v. California Men's Colony, 506 U.S. 194, 202, 113 S.Ct. 716, 121 

L.Ed.2d 656 (1993); Doherty v. American Motors Corp., 728 F.2d 334, 340 (6th Cir.1984). 

Furthermore, it is insufficient for a person to attempt to represent a corporation as an 

officer of the corporation. Reich v. Pierce, 45 F.3d 431, n. 1 (6th Cir.1994). A lack of 

resources does not excuse a corporate party's failure to have counsel appear on its 

behalf. See NK Beer Wine, Inc. v. United States, 2009 WL 1874031, *1 (W.D. Mich. June 

29, 2009). Thus, courts have consistently declined to waive the rule, “even in cases of 

severe financial hardship.” See Talasila Inc. v. United States, 240 F.3d 1064, 1067 (Fed.

Cir. 2001). Based on the long-standing rule, Defendant was directed to secure substitute 

counsel within a short period of time after defense counsel was permitted to withdraw. 

When Defendant failed to do so, on January 8, 2019, the Court expressly cautioned 

Defendant that its failure to show cause and a continued failure to retain new counsel by 

January 30, 2019 could result in the entry of a Report and Recommendation (“R&R”)

recommending that TSS be found to be in default. 

At this juncture the Court has no recourse but to recommend sua sponte that the 

Clerk's Office enter a default against the corporate Defendant based upon its failure to 

secure counsel. Entry of default is appropriate whenever a defendant fails “to plead or 

otherwise defend.” See generally Rule 55(a); see also Ackra Direct Mktg. Corp. v. 

Fingerhut Corp., 86 F.3d 852, 856–57 (8th Cir.1996) (corporate defendant was technically 

in default on date court allowed counsel to withdraw). Despite the filing of an initial 

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Answer by former counsel, Defendant has shown no ability or willingness to continue or 

“otherwise defend” this case. Finally, if this R&R is adopted and Defendant continues to 

forego the retention of new counsel, the undersigned is likely to look favorably upon any 

future motion for the entry of a default judgment under Rule 55(b)(2), to the extent that 

Plaintiff’s claim may be reduced to an amount certain.

III. Conclusion and Recommendation

Accordingly, IT IS RECOMMENDED THAT:

1. This Court file an Entry of Default against Defendant TSS Technologies, Inc.

under Rule 55(a), Fed. R. Civ. P.;

2. A copy of this R&R be served upon Defendant TSS Technologies, Inc., c/o 

Marc Drapp, CEO, 8800 Global Way, West Chester, OH 45069;

3. Based upon the information provided in the certificate of service filed with the 

Court by former counsel on December 4, 2018, an additional copy of this R&R 

should be served on TSS Technologies, Inc., c/o Mr. C. Brent Nichols, 8083 

Valley Crossing Dr., Cincinnati, OH 45247. 

 s/ Stephanie K. Bowman 

Stephanie K. Bowman 

United States Magistrate Judge

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

ZOBELE MEXICO, S.A. DE C.V., Case No. 1:18-cv-596

Plaintiff,

Dlott, J.

v. Bowman, M.J.

TSS TECHNOLOGIES, INC.,

Defendant.

NOTICE

Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written 

objections to this Report and Recommendation (“R&R”) within FOURTEEN (14) DAYS

of the filing date of this R&R. That period may be extended further by the Court on timely 

motion by either side for an extension of time. All objections shall specify the portion(s) 

of the R&R objected to, and shall be accompanied by a memorandum of law in support 

of the objections. A party shall respond to an opponent’s objections within FOURTEEN 

(14) DAYS after being served with a copy of those objections. Failure to make objections 

in accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 

U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

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