IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

TRANSMONTAIGNE PRODUCT :

SERVICES, INC., : 

 : 

 Plaintiff, :

 : 

 :

vs. : CIVIL ACTION 09-00023-CG-B

 : 

 :

M/V WILBUR R. CLARK, et al., :

 : 

 Defendants. :

REPORT AND RECOMMENDATION

This action is before the Court on Intervening Plaintiff

Whistler Machine Works, Inc.’s Motion for a Default Judgment (Doc.

209) and Intervening Plaintiff Harrison Brothers Dry Dock & Repair

Yard, Inc.’s Motion for Sanctions/Default Judgment (Doc. 249).

Both Intervening Plaintiffs Whistler Machine Works, Inc.

(hereinafter “Whistler”) and Harrison Brothers Dry Dock & Repair

Yard (hereinafter “Harrison Brothers”) seek a default judgment

against Defendant Hannah Marine Corporation (hereafter “Hannah

Marine”) due to Hannah Marine’s failure to comply with the Court’s

Orders compelling Hannah Marine to respond to Whistler and Harrison

Brothers’ respective discovery requests. Based upon a review of

the motions, and the case file, the undersigned recommends that

Whistler and Harrison Brother’s request for default judgment

against Hannah Marine be granted in part, and denied in part. The

Answers (Docs. 66 and 67) filed on behalf of Hannah Marine in

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response to Whistler and Harrison Brother’s Amended Complaints

should be stricken, and Whistler and Harrison Brothers should be

granted leave to refile their respective motions for default

judgment.

I. Background

On August 21, 2009, Whistler filed a motion seeking to compel

Hannah Marine to respond to discovery requests. (Doc. 189). Hannah

Marine filed a response opposing the motion. (Docs. 192, 194) In

its response, Hannah Marine asserted that it is no longer a viable,

operating business entity, that it has no money in its accounts,

that all of its assets, including its vessels have been seized or

sold, and that it has no employees; thus, no one is available to

respond to the discovery in question. (Id.) Hannah Marine also

filed the declaration of Donald C. Hannah. (Doc. 194). In his

declaration, Mr. Hannah asserted that he is president of Hannah

Marine, that the corporation has no income, and no employees; thus,

no one is available to respond to the production requests. (Id.)

In an Order dated September 14, 2009 (Doc. 202), the undersigned

observed that Hannah Marine had failed to offer any evidence that

demonstrates that it has been officially dissolved and had further

failed to present any case authority that establishes that

releasing employees and selling off assets relieves the corporation

of its obligation to participate in discovery or defend an action.

Accordingly, Hannah Marine was directed to respond to Whistler’s

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discovery requests by September 28, 2009. (Id.)

In its motion seeking the entry of a default judgment,

Whistler asserts that notwithstanding the Court’s Order compelling

Hannah Marine to respond to Whistler’s discovery requests, Hannah

Marine has failed to do so. (Doc. 209). Accordingly, Whistler

requests that the Court enter a default judgment against Hannah

Marine in the amount of $69,081.85, plus interest and attorney

fees. Although Hannah Marine was directed to respond to Whistler’s

motion for default judgment, it has failed to do so. (Doc. 250).

On December 22, 2009, Harrison Brothers filed a motion seeking

to compel Hannah Marine to respond to discovery requests. (Doc.

236). Although the Court issued an Order directing Hannah Marine

to file a response to the motion to compel, Hannah Marine failed to

do so. (Doc. 237). In an Order dated January 22, 2010, the

undersigned observed that Hannah Marine had failed to respond to

the motion to compel, and had further failed to offer any evidence

to controvert the allegations contained in the motion to compel.

Accordingly, the motion to compel was granted, and Hannah Marine

was directed to respond to Harrison Brother’s discovery requests by

January 29, 2010. (Doc. 246).

In its motion seeking the entry of a default judgment,

Harrison Brothers asserts that notwithstanding the Court’s Order

compelling Hannah Marine to respond to Harrison Brothers’

discovery requests, Hannah Marine has failed to do so. (Doc. 249).

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Accordingly, Whistler requests that the Court enter a default

judgment against Hannah Marine in the amount of $131,429.00, plus

interest and attorney fees. Harrison Brothers also request an award

of attorney fees in the amount of $1000, pursuant to Rule 37(a)(5),

to compensate for the costs incurred in bringing the motion to

compel. Although Hannah Marine was directed to respond to Harrison

Brothers’ s motion for sanctions and for default judgment, it has

failed to do so. (Doc. 250).

II. Discussion

A district court has broad discretion to control discovery.

Phipps v. Blakeney, 8 F.3d 788, 790 (llth Cir. 1993). “This power

includes the ability to impose sanctions on uncooperative

litigants.” Id. Under Rule 37 of the Federal Rules of Civil

Procedure, the court may dismiss an action in whole or in part and

or render a default judgment against the disobedient party if the

court determines that a party willfully or in bad faith failed to

obey a discovery order. Fed. R. Civ. P. 37(b)(2)(A)(v)-(vi);

Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1542-43 (llth

Cir. 1993). “Rule 37 sanctions are intended to prevent unfair

prejudice to the litigants and insure the integrity of the

discovery process.” Gratton v. Great Am. Commc’n, 178 F.3d 1373,

1374 (llth Cir. 1999)(per curiam). “[T]he severe sanction of a

dismissal or default judgment is appropriate only as a last resort,

when less drastic sanctions would not ensure compliance with the

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court’s orders.” Malautea, 987 F.2d at 1542. However, a district

court is not required to impose lesser sanctions if the lesser

sanction would be ineffective. Id. at 1544; United States v. One

32' Scorpion Go-Fast Vessel, 339 Fed. Appx. 903, 2009 U.S. App.

LEXIS 16622 (llth Cir. 2009). 

Based upon the record before the Court, the undersigned finds

that Whistler and Harrison Brother’s request for entry of default

is due to be granted. Hannah Marine has failed and refused to

participate in discovery and has thwarted Whistler and Harrison

Brother’s ability to conduct any discovery regarding their

respective claims against Hannah Marine. Hannah Marine’s assertion

that it has sold its assets and no longer has any employees does

not relieve it of its obligation to participate in discovery.

Although Donald C. Hannah, president of the Company, filed an

affidavit seeking to have Hannah Marine relieved of its discovery

obligations, he did not relate a single step undertaken by him or

the Company to comply with the Company’s discovery obligations in

this case. Accordingly, based upon the record, the undersigned

finds that Hannah Marine has willfully failed to comply with its

discovery obligations and with Orders of this Court, and that at

this juncture, no sanction short of striking its Answers (Docs. 66

and 67) will suffice. Accordingly, the undersigned recommends that

the Answers (Docs. 66 and 67) filed on behalf of Hannah Marine in

response to Whistler and Harrison Brother’s Amended Complaints be

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Whistler and Harrison Brothers’ requests for default

judgments are not sufficient. To the extent Whistler and

Harrison Brothers seek default judgments, they must file motions

which contain a legal and factual analysis of the following: the

elements of the cause of actions being asserted and how the well

pleaded allegations of their respective amended complaints

establish each element; and the evidence in support of their

request for damages.

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stricken, and that Whistler and Harrison Brothers be granted leave

to refile their respective motions for default judgment1.

The attached sheet contains important information regarding

objections to this Report and Recommendation.

DONE this the 5th day of April, 2010.

 /s/ Sonja F. Bivins 

 UNITED STATES MAGISTRATE JUDGE

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The Court’s Local rules are being amended to reflect the

new computations of time as set out in the amendments to the

Federal Rules of Practice and Procedure, effective December 1,

2009.

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MAGISTRATE JUDGE'S EXPLANATION OF PROCEDURAL RIGHTS AND 

RESPONSIBILITIES FOLLOWING RECOMMENDATION, AND

FINDINGS CONCERNING NEED FOR TRANSCRIPT

l. Objection. Any party who objects to this recommendation, or

anything in it, must, within fourteen days of the date of service

of this document, file specific written objections with the Clerk

of this Court. Failure to do so will bar a de novo determination

by the district judge of anything in the recommendation and will

bar an attack, on appeal, of the factual findings of the Magistrate

Judge. See 28 U.S.C. § 636(b)(1)(C); Lewis v. Smith, 855 F.2d 736,

738 (11th Cir. 1988); Nettles v. Wainwright, 677 F.2d 404 (5th Cir.

Unit B, 1982)(en banc). The procedure for challenging the findings

and recommendations of the Magistrate Judge is set out in more

detail in SD ALA LR 72.4 (June 1, 1997), which provides that:

A party may object to a recommendation entered by a

magistrate judge in a dispositive matter, that is, a

matter excepted by 28 U.S.C. § 636(b)(1)(A), by filing a

“Statement of Objection to Magistrate Judge’s

Recommendation” within ten days2 after being served with

a copy of the recommendation, unless a different time is

established by order. The statement of objection shall

specify those portions of the recommendation to which

objection is made and the basis for the objection. The

objecting party shall submit to the district judge, at

the time of filing the objection, a brief setting forth

the party’s arguments that the magistrate judge’s

recommendation should be reviewed de novo and a different

disposition made. It is insufficient to submit only a

copy of the original brief submitted to the magistrate

judge, although a copy of the original brief may be

submitted or referred to and incorporated into the brief

in support of the objection. Failure to submit a brief

in support of the objection may be deemed an abandonment

of the objection. 

A magistrate judge's recommendation cannot be appealed to a

Court of Appeals; only the district judge's order or judgment can

be appealed.

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2. Opposing party’s response to the objection. Any opposing

party may submit a brief opposing the objection within fourteen

(14) days of being served with a copy of the statement of

objection. Fed. R. Civ. P. 72; SD ALA LR 72.4(b). 

3. Transcript (applicable Where Proceedings Tape Recorded).

Pursuant to 28 U.S.C. § 1915 and FED.R.CIV.P. 72(b), the Magistrate

Judge finds that the tapes and original records in this case are

adequate for purposes of review. Any party planning to object to

this recommendation, but unable to pay the fee for a transcript, is

advised that a judicial determination that transcription is

necessary is required before the United States will pay the cost of

the transcript.

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