Ali v. Shamscid-Deen

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Vincent A. Ali,
Plaintiff,
v.
Waleed Shamsid-Deen,
Defendant.
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Civil Action No. 4:24-cv-03629
MEMORANDUM AND RECOMMENDATION
Plaintiff Vincent A. Ali has renewed his request for default judgment
against Defendant Waleed Shamsid-Deen, Dkt. 28, after the undersigned
recommended that his first such request be denied, Dkt. 21 (April 10, 2025
Memorandum and Recommendation (the “M&R”)). 	This latest request is
premised 	on 	Ali’s 	live 	pleading—which 	constitutes 	his 	third 	amended
complaint. Dkt. 26; see also Dkt. 1 (original complaint); Dkt. 17 (first amended
complaint); Dkt. 25 (second amended complaint).
After carefully considering Ali’s motion, the record, and the applicable
law, it is recommended that his request for default judgment (Dkt. 28) be
denied and that this suit be dismissed with prejudice.
United States District Court
Southern District of Texas
ENTERED
February 04, 2026
Nathan Ochsner, Clerk
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Background
Except for the latest procedural developments, the following facts track
those from the previous M&R. See Dkt. 21.
On September 25, 2024, Ali filed this suit, alleging that Shamsid-Deen
had breached the parties’ contract. 	Dkt. 1. 	The complaint asserted that Ali
“invested $30,000” to purchase restaurant equipment and truck equipment
pursuant to a contract wherein Shamsid-Deen, on behalf of QLMA Restaurant
Holdings, LLC (“QLMA, LLC”), agreed to pay Ali a monthly “dividend” of
$1,500 starting September 16, 2023. 	Dkt. 1 at 2. 	The attached “Term Sheet”
includes Shamsid-Deen’s signature as “President/CEO” of QLMA, LLC. 	Dkt.
1-1 at 2. According to Ali, Shamsid-Deen made four initial payments but then
stopped. See Dkt. 1 at 2.
After reviewing the complaint, the Court issued a show cause order
directing Ali to demonstrate that jurisdiction exists. 	Dkt. 7. 	Ali sought leave
to file an amended complaint. 	Dkt. 12. 	The Court granted Ali’s request,
authorizing him to “elaborate[] on” his contentions that form a basis for
diversity jurisdiction under 28 U.S.C. § 1332. 	Dkt. 16 at 2-3. 	Notably,
however, the Court also observed that it was “unclear whether Ali is suing an
individual, 	Waleed 	Shamsid-Deen, 	or 	his 	company, 	QLMA 	Restaurant
Holdings, LLC. 	This distinction matters for jurisdictional purposes” because
the citizenship of an LLC depends on the “citizenship of all its members.” 	Id.
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at 2 n.1 (quoting Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th
Cir. 2008)).
On January 24, 2025, Ali filed a first amended complaint. Dkt. 17. This
time, 	Ali 	explained 	that 	Shamsid-Deen’s 	voter 	registration 	information
indicates that he is a citizen of Georgia. 	See id. at 1, 5. 	The Court construed
this pleading as limiting Ali’s claims to Shamsid-Deen only.
But the first amended complaint eliminated Ali’s previous breach of
contract claim (and, indeed, all the supporting allegations). See id. Instead, it
asserted 	that 	Shamsid-Deen 	committed 	fraud 	by 	signing 	an 	unspecified
contract as QLMA, LLC’s “chairman of the board”:
The Defendant Waleed Shamsid has committed actual fraud when
he signed his name on the 2023 contract. He signed in 2023 as the
chairman of the board of QLMA Restaurant Holdings, LLC, when
in fact he did not file a list of officers with the State of Georgia
Corporation Division nor the Georgia Secretary of State, only as
organizers. The organizers listed in the State of Georgia’s annual
registration 	were 	the 	following: 	Michael 	A. 	Johnson, 	Lonnie
Behdwyler, Qunana Michelle Shamsid Deen.
Id. at 2. 	As damages, the amended complaint listed, without explanation,
(1) $90,000 for “actual fraud”; (2) $90,000 for “contractual fraud”; (3) $200,000
“for utilizing the LLC to commit fraud on the public at large”; and (4) $100,000
in “punitive damages.” Id.
In April 2025, Ali moved for default judgment against Shamsid-Deen.
Dkt. 20. But the M&R detailed numerous deficiencies that warranted denying
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Ali’s request. See Dkt. 21 at 6-11. Most relevant here, the M&R explained that
the first amended complaint failed to plead “a cognizable factual and legal
basis” for fraud. See id. at 7-8. In addition, the M&R found that Ali could not
recover for breach of contract against Shamsid-Deen, both because no such
claim was included in his first amended complaint and, even if it were,
Shamsid-Deen could not be liable on the contract which he allegedly signed as
an officer of QLMA, LLC. See id. at 9. Despite those myriad shortcomings, the
M&R granted Ali one last chance to amend his complaint (by April 18, 2025)
and set a deadline for service (May 23, 2025). Id. at 10-11.
Ali filed a cryptic request for a 30-day extension to “respond” to the
undersigned’s April 10, 2025 “email,” which apparently referenced the M&R.
Dkt. 22. 	Because Ali provided no specifics, the Court granted only a limited
extension to file the second amended complaint (until April 28, 2025), proof of
service (June 2, 2025), and objections to the M&R (May 5, 2025). Dkt. 23.
On April 28, 2025, Ali filed two substantively identical documents, one
entitled “Complaint Against QLMA Resturant [sic] Holdings, LLC Number of
Damages 	Are 	in 	Excess 	of 	$90,000,” 	Dkt. 	25, 	and 	the 	other, 	“Amended
Complaint against Waleed Shamscid-Deen to Comply with Judge’s Show
Cause Order,” Dkt. 26. 	Although the latter filing lists QLMA as a defendant
in the case caption, its allegations are limited to Shamsid-Deen. See e.g., Dkt.
26 at 2 (“Defendant Waleed Shamscid has committed actual fraud ….”).
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The factual allegations in Ali’s latest pleading are nearly identical to
those in his first amended complaint. Compare Dkt. 17 at 2, with Dkt. 26 at 2
(Shamsid-Deen “committed actual fraud when he signed his name on the 2023
contract. 	He signed in 2023 as the president of QLMA … when in fact he did
not 	file 	a 	list 	of 	officers” 	and 	Georgia’s 	annual 	registration 	listed 	other
individuals). 	Without explanation, the live pleading lists damages consisting
of (1) $ 66,000 for “actual fraud”; (2) $10,000 for “contractual fraud”; (3) $9,800
for “loan from daughter”; and (4) $20,000 for “stress from this sanction heart
condition.” Dkt. 26 at 2.
Summons was issued as to Shamsid-Deen on April 28, 2025. According
to the return of service, Shamsid-Deen was personally served on April 29, 2025.
Dkt. 27. He did not answer or otherwise appear to defend this case.
On June 30, 2025, Ali filed a renewed motion for default judgment
against Shamsid-Deen, seeking $196,000 in damages plus interest. 	See Dkt.
28 at 4. 	In the same submission, Ali included an “Application for Entry of
Default .....” Id. at 2. The 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
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(5th Cir. 1996). 	“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 default judgment is warranted. 	See Lewis v.
Lynn, 236 F.3d 766, 767 (5th Cir. 2001). 	But the Fifth Circuit cautions that
“[d]efault judgments are a drastic remedy, not favored by the Federal Rules
and resorted to by courts only in extreme situations.” 	Sun Bank of Ocala v.
Pelican Homestead & Sav. Ass’n, 874 F.2d 274, 276 (5th Cir. 1989) (citations
omitted). 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)).
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.
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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)). 	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
I. 	Ali is not entitled to default judgment.
Ali’s 	latest 	request 	for 	default 	judgment 	fails 	because 	he 	has 	not
adequately pleaded a claim upon which relief can be granted. Indeed, the live
third 	amended 	complaint 	(Dkt. 	26) 	merely 	reprises 	allegations 	that 	the
undersigned already deemed inadequate. 	Default judgment should be denied
as substantively improper.
As a procedural matter, the Clerk of Court has yet to enter default,
although Ali’s submission embeds an application for entry of default, see Dkt.
28 at 2-3. The record also reflects that entry of default would be proper because
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Shamsid-Deen has not appeared despite being personally served with the
summons and complaint, see Dkt. 27.
But 	even 	assuming 	that 	the 	procedural 	requirements 	for 	default
judgment are satisfied, Ali has not shown “a sufficient basis in the pleadings
for [default] judgment [to be] entered.” See Nishimatsu, 515 F.2d at 1206. To
satisfy that test, the factual allegations in his live pleading, if taken as true,
must state a claim upon which relief can be granted. See United Cmty. Bank,
Inc. v. Loven Bf, Inc., 2020 WL 5045310, at *2 (S.D. Tex. July 22, 2020) (quoting
Shaw v. Galo Equip. & Constr., LLC, 2020 WL 3118928, at *2 (W.D. Tex. June
12, 2020)). This is a lower threshold than the standard for surviving a motion
to dismiss under Rule 12(b)(6). See Wooten, 788 F.3d at 499-500. Nevertheless,
the allegations must be more than conclusory. See Greene v. Wellsfargo Bank,
NA, 2012 WL 968076, at *5 (S.D. Tex. Mar. 20, 2012) (denying default
judgment where allegations were “vague and conclusory”), aff’d sub nom.
McCrimmon v. Wells Fargo Bank, N.A., 516 F. App’x 372 (5th Cir. 2013).
The third amended complaint alleges that Shamsid-Deen committed
fraud, a claim that the Court presumes would be governed by Texas law. 	See
Dkt. 26 at 2; Cap. City Ins. Co. v. Hurst, 632 F.3d 898, 902 (5th Cir. 2011)
(applying forum state’s law in diversity cases). 	In Texas, “a plaintiff must
prove the following elements to establish fraud: (1) the defendant made a
material 	representation 	that 	was 	false; 	(2) 	the 	defendant 	knew 	the
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representation was false or made it recklessly as a positive assertion without
any knowledge of its truth; (3) the defendant intended to induce the plaintiff
to act upon the representation; and (4) the plaintiff actually and justifiably
relied upon the representation and suffered injury as a result.” CBE Gp., Inc.
v. Lexington Law Firm, 993 F.3d 346, 350 (5th Cir. 2021) (quoting JPMorgan
Chase Bank, N.A. v. Orca Assets G.P., LLC, 546 S.W.3d 648, 653 (Tex. 2018)
(internal citations and quotation marks omitted)).
“In federal court, fraud claims must meet the heightened pleading
standard 	of 	Rule 	9.” 	Pointeast 	Pharma 	Consulting, 	Inc. 	v. 	Lenzing
Aktiengesellschaft, 2024 WL 5048964, at *5 (S.D. Tex. Dec. 9, 2024) (citing Fed.
R. Civ. P. 9(b) and applying it when resolving motion for default judgment).
The 	applicable 	rule 	requires 	a 	party 	to 	“state 	with 	particularity 	the
circumstances constituting fraud or mistake.” 	Fed. R. Civ. P. 9(b). 	“[F]raud
claims that do not meet the heightened pleading standard in federal court are
not well-pleaded and cannot support a default judgment.” Edge Adhesives, Inc.
v. Sharpe Concepts, LLC, 2015 WL 12743618, at *3 (N.D. Tex. Aug. 31, 2015)
(pleadings inadequate where they did not specify which of the defendants made
the fraudulent statements, or what time or where the statements were made);
see also Ambo Props., LLC v. Univ. Hill Owner, LLC, 2025 WL 3687627, at *4
(W.D. Tex. Nov. 17, 2025) (rejecting motion for default judgment on fraud claim
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when the complaint did not specify “when and where the misrepresentation
was made”), adopted by 2025 WL 3681382 (W.D. Tex. Dec. 17, 2025).
Ali’s 	pleading 	remains 	woefully 	insufficient. 	As 	explained 	in 	the
previous 	M&R, Ali’s second amended 	complaint 	was 	conclusory, 	alleging
merely that “Shamsid-Deen committed fraud by signing his name ‘on the 2023
contract,’” without “indicat[ing] what the contract is or what it says.” Dkt. 21
at 7. 	His third amended complaint is no better; it likewise alleges that
Shamsid-Deen “committed actual fraud when he signed his name on the 2023
contract.” 	Dkt. 26 at 2. 	Once again, the pleading does not explain what the
contract is, what the contract says, or the circumstances under which the
contract was signed.
In addition, the undersigned already rejected Ali’s theory that Shamsid-
Deen’s signing the contract as QLMA LLC’s president was fraudulent merely
because QLMA LLC did not file a “list of officers” with the Georgia Secretary
of State. See Dkt. 21 at 8. As noted in the M&R, Georgia law does not require
an LLC to submit a list of officers, whether in its articles of organization or
otherwise. See id. Yet the third amended complaint merely reprises the same
fraud theory that the undersigned concluded is not actionable, as a matter of
law. Compare Dkt. 26 at 2, with Dkt. 21 at 8. Ali has failed to state a colorable
fraud claim.
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Ali also cannot rely on any earlier pleadings to fill in the blanks because
they were superseded and replaced by his live complaint. See Clark v. Tarrant
Cnty., Tex., 798 F.2d 736, 740 (5th Cir. 1986). 	Indeed, the undersigned
emphasized this point in the prior M&R, see Dkt. 21 at 6-7, giving Ali ample
notice of his obligation to re-plead any allegations when submitting his third
amended complaint. 	He simply failed to do so. 	There is no valid basis for
entering default judgment.
II. 	Dismissal of this suit is merited.
Ali’s failure to rectify his deficient allegations also warrants dismissing
this case. This Court is empowered “to consider the sufficiency of the complaint
on its own initiative.” Lozano v. Ocwen Fed. Bank, FSB, 489 F.3d 636, 642 (5th
Cir. 2007) (quotation omitted). 	A district court may dismiss cases with
prejudice sua sponte for failure to state a claim. 	See Carroll v. Fort James
Corp., 470 F.3d 1171, 1177 (5th Cir. 2006); Alvarado Martinez v. Eltman L.,
P.C., 444 F. Supp. 3d 748, 756 (N.D. Tex. 2020) (denying default judgment and
warning the plaintiff that the court intended to dismiss case with prejudice sua
sponte for failure to state a claim).
The Court has given Ali multiple chances to amend his pleadings and
address their deficiencies. 	See Dkt. 1 (original complaint); Dkts. 17, 25, 26
(amended complaints). 	But Ali has not cured the problems detailed in the
undersigned’s opinion recommending that his previous motion for default
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judgment be denied. To the contrary, his allegations have become vaguer and
even more conclusory over the course of this case. There is no indication that
Ali could adequately plead a cognizable claim if given yet another opportunity
to do so. The proper recourse is to dismiss this case with prejudice.
A district court can dismiss claims on its own motion “as long as the
procedure employed is fair.” 	Carver v. Atwood, 18 F.4th 494, 498 (5th Cir.
2021) (quotation omitted). 	That generally means a court must first provide
notice of its intent to dismiss and an opportunity to respond. 	See id. 	But Ali
would have an opportunity to respond during the 14-day window for filing
objections to this opinion. 	See Brown v. City of Central, 2024 WL 546340, at
*9 (5th Cir. Feb. 12, 2024) (objections period following a magistrate judge’s
recommendation to dismiss claims sua sponte provides a “fair procedure”
before the Court determines whether to adopt the recommendation); see also,
e.g., Gonzalez v. 2009 Hou. Scott St., LP, 2025 WL 2598190, at *4 n.3 (S.D. Tex.
Aug. 18, 2025), adopted by 2025 WL 2597697 (S.D. Tex. Sept. 8, 2025). 	As a
result, 	dismissal 	of 	this 	suit 	following 	the 	objection 	period 	would 	be
procedurally fair.
Recommendation
For 	the 	foregoing 	reasons, 	it 	is 	RECOMMENDED 	that 	Plaintiff
Vincent A. Ali’s motion for default judgment (Dkt. 28) be DENIED.
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It 	is 	further 	RECOMMENDED 	that 	Ali’s 	claims 	be 	DISMISSED
WITH PREJUDICE for failure to state a claim.
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 February 4, 2026, at Houston, Texas.
______________________________
Yvonne Y. Ho
United States Magistrate Judge
______________________________________
Yvoon	nn	n	ne Y. Ho
Uniiittted States M	M	Magistrate Judge
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