final judgment as to the Defaulting Defendants.
Furthermore, the court has determined that it is premature at this time to calculate the level of damages and enter a final judgment against the Defaulting Defendants. The problem stems from the fact that some, but not all, of the defendants have defaulted. Frow v. De La Vega, 82 U.S. (15 Wall.) 552, 21 L. Ed. 60 (1872) and its progeny deal with the extent to which courts may proceed against a defaulting defendant when joint and/or several liability is sought against that defendant and other non-defaulting defendants.
In a case such as this, where plaintiff seeks joint and several liability against several defendants, the court may enter a default judgment against any defendants who default by failing to appear. Fed.R.Civ.Pro. 54(b), 55(b). See 6 Moore's Federal Practice P55.06 at 55-39 and -40 (2d ed. 1988). This rule formed the basis for the court's entry of default judgments against the Defaulting Defendants on June 28, 1991.
However, in such a case where some but not all defendants have defaulted,
the courts have consistently held that it is appropriate to enter judgment solely as to liability and not as to the amount of damages to be assessed against the defaulting party, since a separate determination of damages would pose the prospect of inconsistent judgments.
Friedman v. Lawrence, 1991 U.S. Dist. LEXIS 13959, 90 Civ. 5584 (S.D.N.Y. Oct. 2, 1991) (Dolinger, M.J.) (citations omitted). Montcalm claims joint and several liability in this case, alleging that all of the defendants acted together in a scheme to defraud. In such a case, the amount of damages which plaintiff may recover from defaulting and non-defaulting defendants should not differ. See Hunt v. Inter-Globe Energy, 770 F.2d 145, 147-48 (10th Cir. 1985); Dundee Cement Co. v. Howard Pipe & Concrete Prod., 722 F.2d 1319, 1324 (7th Cir. 1983). However, if the court assessed damages against the Defaulting Defendants at this time, it would risk the possibility of disparate damage judgments, since the court may not presently address the issue of damages as to Ryan and Progressive, the non-defaulting defendants.
Instead, the proper procedure is to consolidate the inquest to determine the level of damages as to the Defaulting Defendants with the damages aspect of the trial against the non-defaulting defendants, Ryan and Progressive. See 6 Moore's Federal Practice P55.06 at 55-42 n.17 (2d ed. 1988). The Defaulting Defendants may not participate in the merits aspect of the trial, as their default judgments stand as admissions of liability.
Finally, because this action has been stayed as to defendants Ryan and Progressive, pending the outcome of their bankruptcy proceedings in New Jersey, the action shall be placed on the suspense calendar.
Dated: April 21, 1992
New York, New York
Constance Baker Motley
United States District Judge