Employers Insurance Company of Wausau v. Texcon Holdings, Inc.

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Case 4:25-cv-00849 Document18- Filed 07/27/26in TXSD Page1of18

United States District Court
Southem District of Texas

ENTERED
July 27, 2026
Nathan Ochsner, Clerk

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION
§
Employers Insurance Company of §
Wausau, §
§
Plaintiff, § Civil Action No. 4:25-cv-00849
§
Vv. §
§
Texcon Holdings, Inc., §
§
Defendant. §

MEMORANDUM AND RECOMMENDATION

After obtaining entry of default, Dkt. 14, Plaintiff Employers Insurance
Company of Wausau filed a motion for default judgment against Defendant
Texcon Holdings, Inc. Dkt. 17. The motion requests damages resulting from
Texcon’s alleged failure to pay overdue premiums, interest on that sum,
attorneys’ fees, and costs. See id. at 6. After carefully considering Employers
Insurance’s submission, its pleading, the record, and the applicable law, it is

recommended that its request for default judgment be granted.

Background

The following facts are taken as true at this stage. From March 2, 2023
until March 2, 2024, Employers Insurance provided Texcon with commercial
workers’ compensation and employers’ liability insurance. Dkt. 1 at 2; see also

id. at 6-52 (the “Policy’). That coverage was provided in exchange for

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premiums. 	See id. at 2; see also id. at 30 (“You will pay all premium when
due.”). The initial premium was an “estimate” subject to adjustment based on
Texcon’s actual exposure during the coverage period. 	See id. at 2; see also id.
at 30 (“The final premium will be determined after this policy ends by using
the actual … premium basis ....”). 	Employers Insurance could audit Texcon’s
records “to determine final premium.” 	See id. at 30. 	Texcon would then have
to pay any difference between the initial and final premium. See id.
Employers Insurance performed audits in accordance with the Policy,
which indicated that Texcon owed an additional $157,060 in premiums. 	See
id. at 2; see also id. at 55 (notice of premium balance). 	Employers Insurance
requested that additional sum, but Texcon failed to pay it. See id. at 2.
On February 26, 2025, Employers Insurance filed this suit against
Texcon, asserting suit on a sworn account, breach of contract, and quantum
meruit. 	Id. at 2-4. 	Employers Insurance seeks damages equal to the amount
of outstanding premiums plus interest, attorneys’ fees, and costs. Id. at 4.
Summons was issued on March 3, 2025. Dkt. 4. According to the return
of service, the summons was served on Texcon’s registered agent, Meng Zhang,
who “identified themself as the party authorized to receive service of process
on behalf of” Texcon. Dkt. 5 at 4.
Texcon did not answer or otherwise appear to defend this case. 	That
prompted Employers Insurance to request entry of default, which the clerk of
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court granted. 	Dkts. 13, 14. 	On January 8, 2026, the undersigned ordered
Employers Insurance to move for default judgment. 	Dkt. 16. 	Employers
Insurance then filed a motion for default judgment on January 28, 2026.
Dkt. 17. That motion is ripe for resolution.
Legal Standard
Default proceedings involve three steps: default, entry of default, and
default judgment. See Fed. R. Civ. P. 55. A default occurs “when a defendant
has failed to plead or otherwise respond to the complaint within the time
required by the Federal Rules.” 	N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141
(5th Cir. 1996); see also Fed. R. Civ. P. 55(a). “An entry of default is what the
clerk enters when a plaintiff establishes the default by affidavit or otherwise
pursuant to Rule 55(a).” Axcess Glob. Scis., LLC v. Ozcan Grp., Inc., 2024 WL
3259700, at *1 (S.D. Tex. July 1, 2024). A default judgment can then be entered
if a plaintiff applies for such relief under Rule 55(b)(2). See id.
“A default judgment is a judgment on the merits that conclusively
establishes the defendant's liability.” 	United States ex rel. M-CO Constr. Inc.
v. Shipco Gen., Inc., 814 F.2d 1011, 1014 (5th Cir. 1987). District courts have
discretion to determine whether entry of default judgment is warranted. 	See
Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (per curiam). 	But the Fifth
Circuit instructs that “[d]efault judgments are a drastic remedy, not favored
by the Federal Rules and resorted to by courts only in extreme situations.” Sun
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Bank of Ocala v. Pelican Homestead & Sav. Ass’n, 874 F.2d 274, 276 (5th Cir.
1989). 	A plaintiff “is not entitled to a default judgment as a matter of right,”
even if the defendant “is technically in default.” 	Lewis, 236 F.3d at 767
(quoting Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996) (per curiam)).
A request for default judgment “must be supported by well-pleaded
allegations and must have a sufficient basis in the pleadings.” 	Wooten v.
McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (quotation
omitted). 	“The well-pleaded allegations are assumed to be true, except those
regarding damages.” 	Axcess Glob. Scis., LLC, 2024 WL 3259700, at *2 (citing
Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir.
1975)). 	Any doubts about the appropriateness of a default judgment must be
resolved in favor of the defaulting party. See id.
Analysis
The appropriateness of default judgment depends on “(1) whether the
entry 	of 	default 	judgment 	is 	procedurally 	warranted; 	(2) 	whether 	the
substantive merits of the plaintiff's claim as stated in the complaint provide a
sufficient basis for default judgment; and (3) whether and what relief the
plaintiff should receive.” Allen & Overy v. Zaziski, 2022 WL 19506, at *1 (S.D.
Tex. Jan. 3, 2022) (citing Neutral Gray Music v. Tri-City Funding & Mgmt.
LLC, 2021 WL 1521592, at *2-3 (S.D. Tex. Mar. 30, 2021)). 	Employers
Insurance contends that it has met all requirements. The Court agrees.
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I. 	Employers Insurance has shown that this Court has jurisdiction.
The Court must first confirm that it has jurisdiction to grant default
judgment. 	See Sys. Pipe & Supply, Inc. v. M/V VIKTOR KURNATOVSKIY,
242 F.3d 322, 324 (5th Cir. 2001) (describing this as the court’s “affirmative
duty” 	when 	addressing 	a 	motion 	for 	default 	judgment). 	Subject-matter
jurisdiction is proper under 28 U.S.C. § 1332 because Employers Insurance and
Texcon are citizens of different states and the amount in controversy exceeds
$75,000. See Dkt. 1 at 1, 3.
As for personal jurisdiction, the key question is whether Texcon was
properly served. See Rogers v. Hartford Life & Acc. Ins. Co., 167 F.3d 933, 940
(5th Cir. 1999); see also Avdeef v. Royal Bank of Scotland, P.L.C., 616 F. App’x
665, 672 (5th Cir. 2015) (per curiam) (noting that “proper service of process is
a jurisdictional prerequisite to the entry of a default judgment”). Absent valid
service, any default judgment against Texcon would be void. 	See Rogers,
167 F.3d at 940.
There are two ways to serve business entities like Texcon. One option is
to serve the entity under the law of the state where the district court is located
or where service was made. 	See Fed. R. Civ. P. 4(h)(1)(A) (incorporating Rule
4(e)(1)). 	The second option is to serve the summons and complaint on “an
officer, 	a 	managing 	or 	general 	agent, 	or 	any 	other 	agent 	authorized 	by
appointment or by law to receive service of process and—if the agent is one
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authorized by statute and the statute so requires—by also mailing a copy of
each to the defendant ....” Fed. R. Civ. P. 4(h)(1)(B).
Service here complied with Rule 4’s second method of service. 	“The
general rule is that a signed return of service constitutes prima facie evidence
of valid service ....” 	People’s United Equip. Fin. Corp. v. Hartmann, 447 F.
App’x 522, 524 (5th Cir. 2011) (per curiam) (quotations omitted). 	The record
includes a “Proof of Service” signed by the process server, Robert Gandy,
“under penalty of perjury.” Dkt. 5 at 4. That document reflects that, on March
6, 2025 at 11:04 am, Gandy personally delivered the summons and complaint
to Meng Zhang at 27318 Onslow Run Drive, Katy, Texas 77494. 	Id.; see also
Dkt. 10 at 3 (affidavit of plaintiff’s counsel). 	The proof of service describes
Zhang as Texcon’s registered agent and that Zhang “identified themself as the
party authorized to receive service of process on behalf of” Texcon. Dkt. 5 at 4.
Indeed, the Texas Comptroller’s website identifies Texcon’s registered agent as
Zhang and its registered office street address as 27318 Onslow Run Drive,
Katy, Texas 77494. See Tex. Comptroller of Pub. Accts., Franchise Tax Account
Status, https://perma.cc/7X39-TUG6 (last accessed July 27, 2026).
Nothing in the return of service raises doubts regarding the proprietary
of service. Because Employers Insurance met its burden to show that Texcon’s
registered 	agent 	was 	properly 	served, 	this 	Court 	can 	exercise 	personal
jurisdiction over Texcon. 	See, e.g., Camacho v. Sajeda Inc., 2025 WL 746555,
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at *3 (N.D. Tex. Jan. 24, 2025) (effective service where return of service
reflected 	that 	business 	entity’s 	registered 	agent 	was 	personally 	served),
adopted by 2025 WL 746571 (W.D. Tex. Mar. 6, 2025).
II. 	Default judgment is procedurally warranted.
The next inquiry is whether default judgment is procedurally warranted.
Six factors inform that inquiry: “[(1)] whether material issues of fact are at
issue, [(2)] whether there has been substantial prejudice, [(3)] whether the
grounds for default are clearly established, [(4)] whether the default was
caused by a good-faith mistake or excusable neglect, [(5)] the harshness of a
default judgment, and [(6)] whether the court would think itself obliged to set
aside the default on the defendant's motion.” Lindsey v. Prive Corp., 161 F.3d
886, 893 (5th Cir. 1998). All factors favor default judgment.
First, there are no disputed factual issues because Texcon has not
responded to this suit. 	Employers Insurance’s well-pleaded facts are thus
taken as true. 	See Nishimatsu, 515 F.2d at 1206 (“The defendant, by his
default, admits the plaintiff’s well pleaded allegations of fact ....”).
Second, Texcon’s lack of response prejudices Employers Insurance by
halting the adversarial process and thwarting its ability to obtain relief. 	See
Alvarado Martinez v. Eltman L., P.C., 444 F. Supp. 3d 748, 753 (N.D. Tex.
2020); Innovative Sports Mgmt., Inc. v. Paisa’s Truck LLC, 2024 WL 625316,
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at *3 (S.D. Tex. Feb. 14, 2024) (prejudice where defendant’s “failure to respond
threatens to bring the adversary process to a halt”) (quotation omitted).
Third, the grounds for default are clearly established. The clerk of court
properly entered default after Texcon failed to answer or otherwise defend. See
Dkt. 14 (entry of default); Fed. R. Civ. P. 55 (failure to appear is grounds for
default). 	Such a failure to defend or appear likewise permits entry of default
judgment. See United States v. $37,603.00 in US Currency, 2021 WL 3013337,
at *3 (S.D. Tex. July 16, 2021).
For the last three factors, nothing in the record indicates that Texcon
defaulted due to a good-faith mistake or excusable neglect. 	Neither does
anything suggest that default judgment would be unduly harsh or vulnerable
to challenge later. See Griffin v. O’Brien, Wexler, & Assocs., LLC, 680 F. Supp.
3d 772, 781 (E.D. Tex. 2023) (default judgment was “not unusually harsh”
because defendants “had ample opportunity to respond” but “failed to do so”);
see also Jenkins & Gilchrist v. Groia & Co., 542 F.3d 114, 119 (5th Cir. 2008)
(considerations for setting aside a default judgment are: “whether the default
was willful, whether setting it aside would prejudice the adversary, and
whether a meritorious defense is presented”) (quotation omitted). 	All factors
indicate that default judgment is procedurally appropriate. 	See, e.g., AFCO
Credit Corp. v. Logan Transp., Inc., 2026 WL 834716, at *3 (W.D. Tex. Mar. 6,
2026) (default judgment was procedurally warranted where defendant failed
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to appear in breach of contract suit for overdue insurance premiums), adopted
by 2026 WL 826840 (W.D. Tex. Mar. 24, 2026).
III. 	Default judgment is also substantively appropriate.
The next inquiry concerns the merits of Employers Insurance’s claims.
There must be “a sufficient basis in the pleadings for the judgment [to be]
entered.” Nishimatsu, 515 F.2d at 1206. To meet that requirement, the factual
allegations in the complaint, if taken as true, must state a claim upon which
relief can be granted. 	United Cmty. Bank, Inc. v. Loven Bf, Inc., 2020 WL
5045310, at *2 (S.D. Tex. July 22, 2020), adopted by 2020 WL 5039496 (S.D.
Tex. Aug. 26, 2020). That is a lower threshold than the standard for surviving
a motion to dismiss under Fed. R. Civ. P. 12(b)(6). 	See Wooten, 788 F.3d at
499-500 (allegations need only provide fair notice).
In the complaint, Employers Insurance alleges that Texcon failed to pay
overdue premiums in violation of Texas law. 	Dkt. 1. 	It seeks recovery on a
sworn account, for breach of contract, and in quantum meruit. See id. at 2-4.
“The elements of an action on account [under Texas common law] are
(1) there was a sale and delivery of merchandise, (2) that the amount of the
account is just, that is, that the prices are charged in accordance with an
agreement or in the absence of an agreement, they are usual, customary and
reasonable prices for that merchandise; and (3) that the amount is unpaid.”
Omni USA, Inc. v. Parker-Hannifin Corp., 964 F. Supp. 2d 805, 838 (S.D. Tex.
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2013) (collecting cases). “A suit for insurance premiums due on policies sold to
the defendant may be brought as a sworn account.” Abe I. Brilling Ins. Agency
v. Hale, 601 S.W.2d 403, 404-05 	(Tex. Civ. 	App.—Dallas 1980, 	no 	writ)
(collecting authorities); see also Bluebonnet Exp., Inc. v. Emps. Ins. of Wausau,
651 S.W.2d 345, 353 (Tex. App.—Houston [14th Dist.] 1983, writ ref’d n.r.e.).
And a breach-of-contract claim requires “(1) the existence of a valid contract;
(2) performance or tendered performance by the plaintiff; (3) breach of the
contract by the defendant; and (4) damages to the plaintiff as a result of the
defendant’s breach.” 	Williams v. Wells Fargo Bank, N.A., 884 F.3d 239, 244
(5th Cir. 2018) (per curiam) (quoting Caprock Inv. Corp. v. Montgomery, 321
S.W.3d 91, 99 (Tex. App.—Eastland 2010, pet. denied)).
The complaint satisfies all elements of both claims. 	It alleges that the
parties agreed to an insurance policy for workers’ compensation and employers’
liability insurance in exchange for premiums. See Dkt. 1 at 2; see also id. at 6-
52 (the Policy). Premium payments then became due under the Policy. See id.
at 2; see also id. at 55 (notice of balance). 	But Texcon failed to pay those
premiums. See id. at 2. Those allegations support recovery on a sworn account
and for breach of contract. See, e.g., Aristocles Enters., LLC v. KEU, Inc., 2023
WL 8455039, at *3 (E.D. Tex. Dec. 5, 2023) (finding sufficient basis for breach
of contract and sworn account claims where plaintiff alleged that the parties
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entered into a contract for services, plaintiff provided those services and
submitted invoices, but defendant did not pay those invoices).
But because Employers Insurance can recover under the breach of
contract theory, it cannot obtain relief in quantum meruit. 	See In re Kellogg
Brown & Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005) (“A party generally cannot
recover under quantum meruit when there is a valid contract covering the
services or materials furnished.”); see also UnitedHealthcare Ins. Co. v. Quality
Metrics Partners, LLC, 2022 WL 3639507, at *3 (N.D. Tex. Aug. 22, 2022)
(granting default judgment on breach-of-contract claim but denying judgment
on 	quantum 	meruit 	claim). 	Employers 	Insurance 	is 	entitled 	to 	default
judgment on the sworn account and breach-of-contract claims.
IV. 	An evidentiary hearing is unnecessary to grant damages.
The final issue concerns Employers Insurance’s request for damages,
pre- 	and 	post-judgment 	interest, 	attorneys’ 	fees, 	and 	costs. 	“A 	default
judgment does not establish damages, which must be supported by evidence.”
United States v. Hernandez, 794 F. Supp. 3d 456, 473 (W.D. Tex. 2025) (citing
Shipco, 814 F.2d at 1014). The Court “may conduct hearings ... when, to enter
or effectuate judgment, it needs to ... determine the amount of damages.” Fed.
R. Civ. P. 55(b)(2)(B). 	But an evidentiary hearing in unnecessary if those
damages can be “computed with certainty by reference to the pleadings and
supporting documents ....” James v. Frame, 6 F.3d 307, 311 (5th Cir. 1993).
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Employers Insurance seeks $157,060 in unpaid premiums, $3,275.000 in
attorneys’ fees and $1,211 in costs, and pre- and post-judgment interest. 	See
Dkt. 17 at 6; see also Dkt. 1 at 4. It is entitled to most of that relief.
A. 	Undisputed evidence shows that Employers Insurance has
suffered $157,060 in damages.
Employers insurance first seeks its actual damages. See Dkt. 17 at 6. It
asserts that Texcon owes $157,060 “in additional premiums based on actual
exposure during the effective dates of the Policy.” Id.
As 	support, 	Employers 	Insurance 	attaches 	(1) 	the 	affidavit 	of 	an
accounting manager who is the custodian of records related to the Policy, see
Dkt. 17 at 9-10; (2) the Policy, which provides that Texcon will pay the final
premium calculated after an audit, see id. at 35; (2) an account summary
following the audit, see id. at 60-61, and (3) request for payment, see id. at 63.
That undisputed evidence is sufficient to establish that Employers Insurance
is entitled to $157,060 in actual damages. 	See Liberty Mut. Ins. Co. v. Senior
Care, Inc., 2013 WL 12091103, at *2 (W.D. Tex. Nov. 6, 2013) (damages hearing
unnecessary where plaintiff submitted nearly identical records and affidavits
substantiating the overdue premium); see also St. Paul Fire & Marine Ins. Co.
v. Flexrod Sales & Servs., Inc., 2016 WL 11554108, at *3 (W.D. Tex. Dec. 13,
2016) (plaintiff’s affidavit, audit, invoice, and a notice supporting its claim for
overdue premium was sufficient to resolve damages).
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B. 	Employers Insurance is also entitled to interest.
Employers Insurance is also entitled to pre- and post-judgment interest.
See Dkt. 17 at 6. 	“State law governs the award of prejudgment interest in
diversity cases.” Meaux Surface Prot., Inc. v. Fogleman, 607 F.3d 161, 172 (5th
Cir. 2010). 	Under Texas law, “an equitable award of prejudgment interest
should 	be 	granted 	to 	a 	prevailing 	plaintiff 	in 	all 	but 	exceptional
circumstances.” 	Id. 	Such an award is merited here. 	See Arete Partners, L.P.
v. Gunnerman, 643 F.3d 410, 413-15 (5th Cir. 2011) (reviewing Texas law on
pre-judgment interest for breach-of-contract claims); see also St. Paul Fire,
2016 WL 11554108, at *3 (granting pre-judgment interest on damages for
overdue insurance premiums).
Under Texas law, pre-judgment interest depends on “the prime rate as
published by the Board of Governors of the Federal Reserve System on the date
of 	computation.” 	See 	Tex. 	Fin. 	Code 	Ann. 	§§ 	304.103, 	304.003(c)(1).
“Prejudgment interest begins to accrue on the earlier of: (1) 180 days after the
date the defendant receives written notice of a claim; or (2) the date suit is
filed.” 	State Farm Mut. Auto. Ins. Co. v. Norris, 216 S.W.3d 819, 822 (Tex.
2006) (citing Tex. Fin. Code § 304.104). 	Nothing indicates whether or when
Employers Insurance gave Texcon pre-suit notice of the claim. As a result, pre-
judgment interest began to accrue on February 26, 2025, the date the suit was
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filed. 	Dkt. 1. 	Accrual will end “on the day preceding the date judgment is
rendered.” Tex. Fin. Code § 304.104.
“Post-judgment 	interest 	on 	money 	judgments 	recovered 	in 	federal
district court is governed by 28 U.S.C. § 1961, even in diversity cases.” Mitchell
Energy Corp. v. Samson Res. Co., 80 F.3d 976, 987 (5th Cir. 1996). 	“Interest
shall be allowed on any money judgment in a civil case recovered in a district
court.” 	28 U.S.C. § 1961(a). 	“Such interest shall be calculated from the date
of the entry of the judgment, at a rate equal to the weekly average 1-year
constant maturity Treasury yield, as published by the Board of Governors of
the Federal Reserve System, for the calendar week preceding[] the date of the
judgment.” Id. Employers Insurance is entitled to a post-judgment interest at
the rate published for the week preceding the date of judgment.
C. 	Employers’ Insurance may also recover its attorneys’ fees
and the filing fee.
Finally, Employers 	Insurance seeks 	attorneys’ fees and 	costs. 	See
Dkt. 17 at 6. 	It is entitled to an award of the lodestar for attorneys’ fees and
the cost of its filing fee.
1. 	Attorneys’ fees include only fees for attorney hours worked.
Employers Insurance seeks $3,275.000 in attorneys’ fees. 	Dkt. 17 at 6;
see Tex. Civ. Prac. & Rem. Code § 38.001(b)(7), (8) (authorizing attorneys’ fees
for successful sworn account and breach-of-contract claims). 	As support, it
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submits attorney Catherine L. Hanna’s affidavit explaining the basis for the
figure and addressing its reasonableness. See Dkt. 17 at 88-89.
Hanna attests that the hourly rates for herself ($275), attorneys Sheila
S. Tan ($275) and Emily K. Bloom ($250), and paralegal Elina Lupin ($105)
are reasonable. 	See id. at 89. 	The attached invoices also reflect attorney
Jessica L. Bigbie’s hourly rate of $225. See, e.g., id. at 92. “‘[T]he affidavits of
counsel may alone be sufficient proof’ to establish the reasonable hourly rate.”
Griffin, 680 F. Supp. 3d at 789 (quoting Smith & Fuller, P.A. v. Cooper Tire &
Rubber Co., 685 F.3d 486, 491 (5th Cir. 2012)) (relying on affidavit to find that
rate was reasonable); see also Salmeron v. All. for Multicultural Cmty. Servs.,
2025 WL 1004372, at *4 (S.D. Tex. Mar. 14, 2025) (accepting hourly rate as
reasonable based on counsel’s declaration when awarding fees on default
judgment), adopted by 2025 WL 1001608 (S.D. Tex. Apr. 3, 2025). 	Moreover,
trial 	courts 	themselves 	are 	considered 	experts 	who 	can 	gauge 	the
reasonableness of attorneys’ fees. See Primrose Operating Co. v. Nat’l Am. Ins.
Co., 382 F.3d 546, 562 (5th Cir. 2004). 	And the Court agrees that the hourly
rates listed are reasonable for this type of case.
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For the number of hours worked, Hanna’s affidavit substantiates a total
of 7.5 hours 1 spent collectively by all counsel, and 1.3 total paralegal hours.
See Dkt. 17 at 90-98. Those reported hours are reasonable for this litigation.
But this Court also must “exclude from the lodestar calculation all time
that is ‘excessive, duplicative, or inadequately documented.’” 	Pathan v. Basit
Enters., Inc., 2011 WL 13244519, at *5 (S.D. Tex. Jan. 18, 2011) (quoting
Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993)). 	Employers Insurance’s
attorneys’ fee figure of $3,275.000 is based on the total amount of its invoices,
which include an asset investigation fee ($125), Dkt. 17 at 94, a filing fee
($405), id., and multiple fees for service of process ($608), id. at 94, 96. Those
are not attorneys’ fees, and they improperly duplicate Employers Insurance’s
request for costs. The Court therefore excludes those non-attorneys’-fees items
from the lodestar calculation.
The lodestar is therefore $2,019 (Bigbie: $225 for 2.3 hours; Tan: $275
for 2.2 hours; Hanna: $275 for .4 hours; Bloom: $250 for 2.6 hours; Lupin: $105
for 1.3 hours). No further adjustments are merited.
2. 	Only the cost of the filing fee is recoverable.
Employers Insurance also seeks costs under Fed. R. Civ. P. 54(d)(1).
Dkt. 17 at 6. Generally, costs “should be allowed to the prevailing party.” Fed.
1 Bigbie also spent .2 hours conferring with an adjuster that is not included in the
requested figure. Dkt. 17 at 91-92.
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R. Civ. P. 54(d)(1); Salley v. E.I. DuPont de Nemours & Co., 966 F.2d 1011,
1017 (5th Cir. 1992) (“strong presumption” in favor of awarding costs). 	The
Supreme Court held that “[28 U.S.C.] § 1920 defines the term ‘costs’ as used in
Rule 54(d).” 	Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 566 (2012)
(quotation omitted). 	And “[t]he Supreme Court has indicated that federal
courts may only award those costs articulated in section 1920 absent explicit
statutory or contractual authorization to the contrary.” 	Mota v. Univ. of Tex.
Hou. Health Sci. Ctr., 261 F.3d 512, 529 (5th Cir. 2001).
Employers Insurance requests $1,211 in costs. 	Dkt. 17 at 6. 	That sum
reflects the expenses charged for the asset investigation ($125), the filing fee
($405), and service of process fees ($680). See Dkt. 17 at 90-98. Filing fees are
recoverable costs under the statute. 	See 28 U.S.C. § 1920. 	But neither
investigation fees nor private process server fees are recoverable under Section
1920. See Zastrow v. Hou. Auto M. Imports Greenway, Ltd., 695 F. App’x 774,
780 (5th Cir. 2017) (per curiam) (“[C]osts for private process servers are not
recoverable, absent exceptional circumstances.”); see, e.g., Roor Int’l BV v.
AKS1 Enter., Inc., 2019 WL 3500911, at *4 (S.D. Tex. Aug. 1, 2019) (rejecting
request for investigation or private processor fees); GS Holistics v. Nay Smart
Invs., Inc., 2024 WL 947458, at *5 (N.D. Tex. Mar. 5, 2024) (same). Employers
Insurance’s recoverable costs are limited to the $405 filing fee.
Case 4:25-cv-00849 Document 18 Filed 07/27/26 in TXSD Page 17 of 18

Case 4:25-cv-00849 Document18- Filed 07/27/26in TXSD Page 18 of 18

Recommendation

It is therefore RECOMMENDED that Plaintiff Employers Insurance
Company of Wausau’s motion for default judgment (Dkt. 17) be GRANTED.

It is further RECOMMENDED that Employers Insurance be awarded
$157,060 in damages; pre-judgment interest beginning February 26, 2025 and
post-judgment interest at the rates published by the Board of Governors of the
Federal Reserve System; $2,019 in attorneys’ fees; and $405 in costs.

The parties have fourteen days from service of this Report and
Recommendation to file written objections. 28 U.S.C. § 636(b)(1); Fed.
R. Civ. P. 72(b). Failure to file timely objections will preclude
appellate review of factual findings and legal conclusions, except for
plain error. Ortiz v. City of San Antonio Fire Dep’t, 806 F.3d 822, 825
(5th Cir. 2015).

Signed on July 27, 2026, at Houston, Texas.

Sou. Ac

Yyénne Y. Ho/

United States Magistrate Judge

18