Sterling Bank v. Herrod et al

Filing 37

OPINION. Signed by Honorable Judge Myron H. Thompson on 2/19/16. (djy, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
STERLING BANK, a Division )
of Synovus Bank, a Georgia )
banking corporation,
)
)
Plaintiff,
)
)
v.
)
)
JOSEPH L. HERROD, an
)
individual, BROBST
)
MEDICAL, INC., an Alabama )
corporation, and
)
CHANDLER & ALECIA, INC.,
)
an Alabama corporation,
)
)
Defendants.
)

CIVIL ACTION NO.
2:15cv540-MHT
(WO)

OPINION
This

is

the

second

of

two

opinions.

Plaintiff

Sterling Bank, a division of Synovus Bank, filed this
lawsuit

against

defendants

Joseph

L.

Herrod,

Brobst

Medical, Inc., and Chandler & Alecia, Inc., bringing
multiple

state-law

claims

arising

from,

as

relevant

here, the defendants’ alleged breach of agreements to
guarantee payment of a promissory note and a credit
card

entered

Jurisdiction

is

into
proper

by

Primed

pursuant

to

Physicians,
28

U.S.C.

Inc.
§ 1332

(diversity).

This lawsuit is now before the court on

Sterling Bank’s motions for default judgment against
two defendants: Brobst Medical and Chandler & Alecia.
As

the

motions

identical,
together.

the

and

relevant

court

will

facts

are

address

essentially

both

motions

For the reasons below, the motions will be

granted.
Defendants

Brobst

Medical

and

Chandler

&

Alecia

each received a copy of the complaint and waived formal
service of the summons and complaint on September 9,
2015.

See Waiver of Brobst Medical, Inc. (doc. no. 8);

Waiver

of

Chandler

&

Alecia,

Inc.

(doc.

no.

9).

Sterling Bank applied for entry of default against them
on November 5, 2015, and the clerk of court entered the
requested default against each on November 12, 2015.
On November 17, 2015, Sterling Bank filed the instant
motions for default judgment.
bank

requests

entry

of

a

In both motions, the

judgment

in

the

amount of $ 847,433.27, plus court costs.

aggregate

This amount

includes the principal amounts on the defaulted note

2

and credit-card debt, plus accrued interest, late fees,
and attorneys’ fees.
Attached to both motions for default judgment is an
affidavit from David Hammond, a “Senior Special Assets
Officer

for

division.
Regarding

Synovus,”

of

which

Sterling

Bank

is

a

Affidavit (doc. nos. 26-1 & 27-1) at 2.
the

promissory

note

for

which

both

Brobst

Medical and Alecia & Chandler are guarantors, Hammond
states: “As of November 6, 2015, each of the guarantors
was
Note

obligated
in

accrued

the

to

principal

interest

$ 500.00,
further

for

Sterling

a

obligated

of

amount

regarding
of

$ 17,835.38,

total
to

Bank

of

PriMed

$ 783,295.96,
and

late

$ 801,631.34.

Sterling

the

Bank

for

plus

fees
They
per

of
are

diem

interest going forward from November 7, 2015 in the
amount of $ 92.47 per day, plus attorneys' fees and
costs.”

Id. at 5.

As to the credit-card agreement for

which both Brobst Medical and Alecia & Chandler are
guarantors, Hammond states: “As of November 5, 2015,
each of the guarantors was obligated to Sterling Bank
regarding

the

PriMed

Credit
3

Card

Agreement

in

the

amount

of

$ 5.457.49.

They

are

further

obligated

Sterling Bank for attorneys' fees and costs.”

to

Id. at

6.
Also attached to both default-judgment motions is
an affidavit from Rodney E. Nolen, an Alabama attorney
who

primarily

practices

in

the

areas

of

commercial

collections and commercial litigation and has been a
“Certified
years.

Creditor

Rights

Specialist”

for

over

Affidavit (doc. nos. 26-1 & 27-1) at 45.

20

Nolen

explains that Brobst Medical’s and Chandler & Alecia’s
guarantor agreements require them to “pay or reimburse
Lender for all costs and expenses (including reasonable
attorneys' fees and legal expenses) incurred by Lender
in

connection

enforcement

of

with
this

the

protection,

guaranty

in

any

bankruptcy or insolvency proceedings.”

defense
litigation

Id.

at

or
or
46.

After reviewing the criteria set forth in Johnson v.
Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.
1974), see Affidavit (doc. nos. 26-1 & 27-1) at 47-50,
Nolen

attests

collection

of

that,

“Based

delinquent
4

upon

[his]

commercial

experience
loans

in
and

debts, . . . attorneys' fees of $ 40,081.57, which is
equal

to

5 %

of

the

$ 801,631.34

debt

owed

on

the

PriMed Note (as guaranteed by the Defendants herein),
[and] attorneys' fees of $ 272.87, which is equal to
5 % of the $ 5,457.49 debt owed on the PriMed Credit
Card Agreement, . . . [are] appropriate and reasonable
in this matter.”

Affidavit (doc. no. 27-1) at 50-51.

(While Sterling Bank attached identical affidavits to
each motion for default judgment, the last page of the
Nolen

affidavit

judgment

against

attached
Brobst

to

the

Medical

motion
is

Affidavit (doc. no. 26-1) at 50-51.

for

default

missing.

See

For this reason,

the court here cites only the Nolen affidavit attached
to the motion for default judgment against Chandler &
Alecia (doc. no. 27-1).)
On

November

25,

2015,

the

court

ordered

that

“Brobst Medical, Inc. show cause, if any there be, in
writing by December 11, 2015, as to why the motion for
default judgment (doc. no. 26) should not be granted.”
Order (doc. no. 34) at 1.

The same day, the court

ordered that “Chandler & Alecia, Inc. show cause, if
5

any there be, in writing by December 11, 2015, as to
why

the

motion

for

default

should not be granted.”

judgment

(doc.

no.

27)

Order (doc. no. 35) at 1.

The

court informed both defendants that, if they “fail[] to
respond within the time allowed, default judgment will
be entered in the full amount requested.”

Orders (doc.

nos. 34 & 35) at 1.
The December 11th deadline has come and gone, but
Brobst Medical and Chandler & Alecia have yet to show
cause why judgment should not be entered against them.
As
above,

detailed
both

received

in

Brobst

copies

of

the

factual

Medical
the

and

complaint

background
Chandler
and

provided
&

Alecia

waived

formal

service of the summons and complaint; failed to respond
to the complaint within the time allowed; and failed to
respond timely to an order of this court to show cause
as to why final judgment should not be entered against
it.

Accordingly, this court is of the opinion that

Sterling Bank’s motions for entry of default judgment
should be granted and that judgment of default as to

6

the

amount

requested

should

be

entered

against

both

Brobst Medical and Chandler & Alecia.
A judgment will be entered in accordance with this
opinion.
DONE, this the 19th day of February, 2016.
/s/ Myron H. Thompson____
UNITED STATES DISTRICT JUDGE