United States of America v. SANG WOO KIM and HEUNG JAI KIM

* After an examination of the briefs and the record, we have concluded that oral
argument is unnecessary. Thus, the appeal is submitted on the briefs and record. See
Fed. R. App. P. 34(a)(2).
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted July 25, 2007*
Decided July 26, 2007
Before
Hon. WILLIAM J. BAUER, Circuit Judge
Hon. RICHARD D. CUDAHY, Circuit Judge
Hon. MICHAEL S. KANNE, Circuit Judge
No. 07-1443
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
SANG WOO KIM and
HEUNG JAI KIM,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Indiana,
Indianapolis Division.
No. 06-CV-0448-LJM-TAB
Larry J. McKinney,
Chief Judge.
O R D E R
In this tax forfeiture action, Heung Jai Kim and Sang Woo Kim, father and
son, respectively, together appeal the district court’s grant of summary judgment
against Heung Jai Kim and entry of a default judgment against Sang Woo Kim. We
dismiss Heung Jai Kim’s appeal for his failure to prosecute. However, we vacate
the district court’s entry of the default judgment against Sang Woo Kim and
remand for further proceedings.
In 2000 the United States Secretary of the Treasury assessed Heung Jai Kim
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1

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and his wife, Myung Ok Kim, more than $1.8 million for unpaid federal income
taxes, plus penalties and interest. The Kims made partial payment, leaving an
outstanding balance of approximately $865,000. In response the government filed
in March 2006 a civil complaint seeking a judgment against the Kims for the
balance, a lien on their property located at 11145 Bridlewood Trail in Zionsville,
Indiana, and an order foreclosing the lien and directing that the property be sold.
See 26 U.S.C. §§ 6321, 7403(a). Sang Woo Kim also was named as a party to the
action because, the government stated, “he may claim an interest in the subject
property upon which the United States seeks to foreclose.” See id. § 7403(b).
Although the complaint was served on all three defendants on June 26, 2006,
only Heung Jai Kim answered. He stated that he and Sang Woo Kim had owned
the Bridlewood Trail property as tenants in common since 2001. Having received
no answer from either Myung Ok Kim or Sang Woo Kim, the government moved on
August 14 for a separate entry of default against each. See Fed. R. Civ. P. 55(a).
The clerk entered the defaults the next day, and three days later the government
moved for summary judgment against Heung Jai Kim.
Those actions prompted submissions from both Heung Jai Kim and Sang Woo
Kim on August 28. Heung Jai Kim disclosed that his wife had died on August
10—five days before the district court found her in default. Both father and son
asserted that they shared equal interests in the Bridlewood Trail property, and both
asked the court to dismiss the government’s complaint.
On October 31, the district court issued an order declining to dismiss the
complaint. The court also gave Sang Woo Kim until November 14 to seek relief
from the default. See Fed. R. Civ. P. 55(c). The court set that same deadline for
Heung Jai Kim to respond to the government’s motion for summary judgment,
and for the government to seek a default judgment against Sang Woo Kim. The
court concluded the order by giving Sang Woo Kim until November 28, 2006, to
respond if the government moved for a default judgment.
The government voluntarily dismissed its action against Myung Ok Kim on
November 7. That same day the government moved for a default judgment against
Sang Woo Kim. On November 9, the district court granted the government’s motion
even though its deadlines for Sang Woo Kim to challenge the default itself and the
government’s motion to reduce it to judgment had not passed. Meanwhile, Heung
Jai Kim ignored the government’s motion for summary judgment, and on February
8, 2007, the district court granted that motion. The court later entered judgment in
favor of the government, in which it foreclosed on the Bridlewood Trail property and
ordered the marshals service to sell the property and apply the net proceeds to
Heung Jai Kim’s unpaid tax assessment.
Heung Jai Kim and Sang Woo Kim both appeal, but together they have filed

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a single brief arguing only that the district court erred by entering a default
judgment against Sang Woo Kim. But this argument cannot benefit Heung Jai
Kim, and he lacks authority to raise this or any other argument on Sang Woo Kim’s
behalf. See Am. Fed’n of Gov’t Employees, Local 2119 v. Cohen, 171 F.3d 460, 467
(7th Cir. 1999) (“‘[T]he plaintiff generally must assert his own legal rights and
interests, and cannot rest his claim to relief on the legal rights or interests of third
parties.’” (quoting Warth v. Seldin, 422 U.S. 490, 500 (1975))); see also Navin v.
Park Ridge Sch. Dist., 270 F.3d 1147, 1149 (7th Cir. 2001) (stating that pro se
litigant lacks authority to represent interests of other parties, even if other party is
pro se litigant’s son). And because as to himself Heung Jai Kim does not challenge
the court’s judgment, or the foreclosure of the Bridlewood Trail property, or the
property’s sale to satisfy his delinquent tax assessment, we dismiss his appeal for
failure to prosecute. See United States ex rel. Verdone v. Circuit Court, 73 F.3d 669,
673 (7th Cir. 1995) (dismissing appeal when brief failed to specify any error in
district court’s decision and did not contain identifiable argument); United States v.
Sosa, 55 F.3d 278, 279 (7th Cir. 1995); see also O’Rourke Bros., Inc. v. Nesbitt
Burns, Inc., 201 F.3d 948, 952 (7th Cir. 2000) (“[A] court has inherent authority to
dismiss a case sua sponte for a failure to prosecute.”).
Sang Woo Kim, on the other hand, can and does challenge the district court’s
entry of the default judgment, which we review for abuse of discretion. See Homer
v. Jones-Bey, 415 F.3d 748, 753 (7th Cir. 2005). The government implies that Sang
Woo Kim abandoned this challenge because he failed to show cause in the district
court why the entry of default should be lifted. The government misstates the law;
Sang Woo Kim was not required to challenge in the district court the entry of
default before appealing the default judgment. See Pecarsky v. Galaxiworld.com,
Ltd., 249 F.3d 167, 170-71 (2d Cir. 2001); see also 10A Charles A. Wright et al.,
Federal Practice and Procedure § 2692 (3d ed. 1998) (“Rule 55(c) differentiates
between relief from the entry of default and relief from default judgment.”). More
importantly, we note that the government does not even acknowledge that the
district court ruled before Sang Woo Kim had a chance to argue that the default
should be set aside.
We agree with Sang Woo Kim that the district court abused its discretion
when entering the default judgment. Without prior notice, the court deprived Sang
Woo Kim of the opportunity it promised him both to establish why he should be
relieved from the clerk’s entry of default, and to respond to the government’s motion
for the default judgment. In its order entered on October 31, 2006, the court stated
that Sang Woo Kim would have until November 14 to show why the entry of default
should be lifted; in that same order the court also stated that he would have until
November 28, 2006, to respond if the government sought a default judgment. Yet
when the government filed its motion for the default judgment on November 7, the
court granted it two days later, without first hearing from Sang Woo Kim or at least

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letting his deadline for responding pass. This unannounced and arbitrary deviation
from the established briefing schedule alone constituted an abuse of discretion. See
SEC v. Smyth, 420 F.3d 1225, 1231-32 (11th Cir. 2005) (“We believe that the right
to be heard is of little value unless the party has some point of reference in
established procedural rules to guide his continued participation in the [default
judgment] proceedings, particularly when final judgment looms.”); Vallone v. CNA
Fin. Corp., 375 F.3d 623, 629 (7th Cir. 2004).
Moreover, because the district court failed to consider Sang Woo Kim’s
arguments before entering the default judgment, we cannot say that the court
exercised its discretion at all. Before we can review a discretionary ruling, we first
must conclude that the court exercised its discretion in the first place by
considering arguments relevant to its decision, see United States v. Cunningham,
429 F.3d 673, 679 (7th Cir. 2005), and we will find an abuse of discretion when the
district court fails to do so, see United States v. Roberson, 474 F.3d 432, 436 (7th
Cir. 2007); Carr v. O’Leary, 167 F.3d 1124, 1127 (7th Cir. 1999) (“[A] discretionary
ruling . . . cannot be upheld when there is no indication that the judge exercised
discretion.”); see also Ashby v. McKenna, 331 F.3d 1148, 1152 (10th Cir. 2003)
(stating that district court’s refusal to enter decision regarding default judgment did
not reflect its “exercise of discretion over this matter,” which, in turn, presented
“obvious complications” for appellate courts). Here, the court ruled without waiting
to consider arguments that bore on its decision whether to enter the default
judgment. The district court was obligated to do so, see Smyth, 420 F.3d at 1232;
Wienco, Inc. v. Katahn Assocs., 965 F.2d 565, 568 (7th Cir. 1992), and even stated in
its scheduling order that it would do so. Thus, we must conclude that the district
court failed to exercise any discretion when entering the default judgment. See
Patton v. MFS/Sun Life Fin. Distribs., 480 F.3d 478, 490 (7th Cir. 2007); Roberson,
474 F.3d at 436.
In sum, we DISMISS Heung Jai Kim’s appeal for his failure to prosecute, but
we VACATE the default judgment entered against Sang Woo Kim, and REMAND to
allow the district court to address whether the entry of default should be set aside
pursuant to Fed. R. Civ. P. 55(c). See Key Bank v. Tablecloth Textile Co., 74 F.3d
349, 355-56 (1st Cir. 1996) (stating question of whether entry of default should be
set aside “is more appropriately resolved by the district court in the first instance on
remand”). On remand the district court should consider that, as far as the record
shows, Sang Woo Kim promptly sought relief from his default and the government
neither has claimed that he is responsible for his parents’ outstanding tax
assessment, nor has refuted his assertion that he has a valid interest in the
Bridlewood Trail property. See Yong-Qian Sun v. Bd. of Trs., 473 F.3d 799, 810 (7th
Cir. 2007) (stating that entry of default should be lifted if moving party can show
“(1) good cause for the default; (2) quick action to correct it; and (3) a meritorious

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defense to the complaint”); Pretzel & Stouffer v. Imperial Adjusters, 28 F.3d 42, 45
(7th Cir. 1994) (same); see also Wright et al., supra, § 2685 (“[O]n a motion for relief
from the entry of a default or a default judgment, all doubts should be resolved in
favor of the party seeking relief.”).

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