United States District Court, D. Nebraska
MEMORANDUM AND ORDER
C. BUESCHER UNITED STATES DISTRICT JUDGE
matter is before the Court on the Motion for Default
Judgment, Filing 19, filed by Plaintiff, FocusOne Solutions,
LLC (“FocusOne”), with respect to defendant
Complete Business Solutions Group, Inc. (“CBSG”).
For the reasons stated below, the motion is denied.
following facts are those alleged in the Complaint and
unchallenged by CBSG. This is an interpleader action filed by
FocusOne pursuant to 28 U.S.C. § 1335. FocusOne is a
Nebraska company which provides staffing services to health
care delivery organizations. Filing 1 at 1. FocusOne entered
into such a staffing arrangement with a company by the name
of Meridian Medical Staffing, Inc. Filing 1 at 1-2. FocusOne
holds $9, 553.92 that is payable pursuant to the Meridian
contract. Filing 1 at 1. However, Meridian apparently
assigned, sold, or otherwise transferred some or all of its
accounts receivable related to the contract. Filing 1 at 2.
Both defendants, CBSG and Atlas MedStaff, LLC
(“Atlas”), have contacted FocusOne claiming to be
entitled to the amount due under the Meridian contract.
Filing 1 at 2. Atlas is a Nebraska limited liability company
with its principal place of business in Omaha and a
registered agent in Lincoln. Filing 1 at 2. CBSG does
business as Par Funding and is a Delaware corporation with
its principal place of business in Philadelphia,
Pennsylvania, and a registered agent in Milford, Delaware.
Filing 1 at 2.
Defendants' competing claims to the Meridian contract
money, FocusOne filed the present interpleader action. Atlas
filed an answer, claiming it is entitled to the disputed
funds. Filing 11. FocusOne served CBSG with summons via
certified mail to its registered office as permitted under
Fed.R.Civ.P. 4(h)(1)(A) and Neb. Rev. Stat. § 25-509.01
(Reissue 2016). Filing 10. CBSG did not answer or otherwise
respond to the Complaint and on November 18, 2019, the Clerk
entered default against CBSG under Fed R. Civ. P. 55(a).
Filing 16. The following day, FocusOne moved for default
judgment against CBSG under Fed.R.Civ.P. 55(b), seeking to
preclude CBSG from later contesting the allegations in the
Complaint, including any attorney fees that FocusOne may
negotiate or be awarded upon resolution of the case. Filing
19 at 1-2.
“appropriate for a district court to enter a default
judgment when a party fails to appropriately respond in a
timely manner.” Marshall v. Baggett, 616 F.3d
849, 852 (8th Cir. 2010) (citing Inman v. Am. Home
Furniture Placement, Inc., 120 F.3d 117, 119 (8th Cir.
1997)). “Upon default, the factual allegations of a
complaint (except those relating to the amount of damages)
are taken as true . . . .” Murray v. Lene, 595
F.3d 868, 871 (8th Cir. 2010); see alsoFed. R. Civ.
P. 8(b)(6) (“An allegation-other than one relating to
the amount of damages-is admitted if a responsive pleading is
required and the allegation is not denied.”).
Therefore, “it is incumbent upon the district court to
ensure that ‘the unchallenged facts constitute a
legitimate cause of action' prior to entering final
judgment.” Marshall, 616 F.3d at 852-53
(quoting Murray, 595 F.3d at 871).
FocusOne's pleadings and allegations, the Court
determines the amount in question must be deposited with the
Court before the Court enters default judgment against CBSG.
“Federal statutory interpleader allows a party holding
money or property to join the various parties asserting
mutually exclusive claims, thereby avoiding the threat of
multiple liability or multiple lawsuits.” Acuity v.
Rex, LLC, 929 F.3d 995, 1000 (8th Cir. 2019) (citing
Gaines v. Sunray Oil Co., 539 F.2d 1136, 1141 (8th
Cir. 1976)). “A district court has jurisdiction over a
statutory interpleader claim if there are adverse claimants
to money or property worth at least $500 and diverse
citizenship between at least two of the adverse
claimants.” Id. (citing 28 U.S.C. §
1335(a)). “In addition, the plaintiff must
deposit the money or property in the registry of the district
court.” Id. (emphasis added) (citing 28 U.S.C.
has alleged it holds $9, 553.92 and that Atlas is a citizen
of Nebraska and CBSG is a citizen of citizen of Delaware and
Pennsylvania, thus establishing the first two prongs of an
interpleader action. However, FocusOne did not move to
deposit the disputed money into the court's registry as
required by 28 U.S.C. § 1335(a) and did not deposit the
same into the court prior to seeking a default judgment. This
is a necessary element of an interpleader action and the
failure to deposit the money deprives this Court of
subject-matter jurisdiction to issue a default judgment.
See Acuity, 929 F.3d at 1000 (finding
“subject-matter jurisdiction is lacking because [the
plaintiff] did not deposit the disputed amount into the
court's registry”). Furthermore, FocusOne alleges
it may receive or may have already received additional funds
payable under the Meridian contract. Filing 1 at 4
(referencing “funds under the Meridian Contract
Plaintiff may have received or may hereafter receive”).
Thus, the total amount FocusOne seeks to deposit with the
court is unclear at this time. FocusOne is instructed to make
a motion to deposit the disputed funds into the registry of
the Court specifying the exact amount it seeks to deposit
pursuant to Fed.R.Civ.P. 67 and NECivR 67.1. Once FocusOne
has complied with the requirement of depositing the disputed
funds into the court's registry, it can renew its motion
for default judgment. Accordingly, IT IS ORDERED:
Plaintiff is given fourteen (14) days to seek leave of the
Court to deposit the disputed funds and is ordered to specify
in such motion the exact amount it seeks to deposit;
Motion for Default Judgment against defendant Complete
Business Solutions Group, Inc., Filing 19, is denied without
prejudice to reassertion once subject-matter jurisdiction is
established by ...