Siemens Financial Services v. Delta Radiology Assoc. et al
ORDER re: 23 Motion for Default Judgment, granting in part insofar as default judgment is entered in favor of plaintiff and against defendants concerning the 10 counts in the complaint in the amount of $2,567,253.06 plus late charges in the a mount of $1,002.87/day through entry of judgment and post-judgment interest at the applicable rate, but reserve ruling in part with regard to the request for attorneys' fees and costs/expenses. Plaintiff to supplement motion as set out, no later than 5/11/15. Signed by Judge Kristi K. DuBose on 5/4/2015. (copy of order mailed to Jason Williams, Gulf Shores) (cmj)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SIEMENS FINANCIAL SERVICES,
DELTA RADIOLOGY ASSOC., PLLC, et al.,)
CIVIL ACTION NO. 14-00225-KD-N
This matter is before the Court on Plaintiff Siemens Financial (Plaintiff)’s Rule 55(b)
Motion for Entry of Default Judgment against Defendant Delta Radiology Associates, PLLC
(Delta), and individual Defendant Jason R. Williams (Williams).
entry of a default judgment against these Defendants because they have failed to plead, answer or
otherwise defend in this case.
From December 2010 through August 2012, Plaintiff and Delta entered into certain
leases (also called leasing schedules), personally guaranteed by Williams, through which Delta
leased specific medical equipment from Plaintiff in connection with a December 8, 2010 Master
Equipment Lease Agreement (Master Lease): 1) Lease 1--Leasing Schedule #20700-16317
(contract #130-0002825-000) and Lease 1 Guaranty; 2) Lease 2--Leasing Schedule
#20701-16318 (contract #110-0001996-000) and Lease 2 Guaranty; 3) Lease 3--Leasing
Schedule #20917-17814 (contract #110-0002038-000) and Lease 3 Guaranty; 4) Lease
4--Leasing Schedule #222058-30180 (contract #121-0000201-000) and Lease 4 Guaranty; and 5)
Lease 5--Leasing Schedule #21938-30004 (contract #130-0003060-000) and Lease 5 Guaranty.
(Doc. 23; Doc. 23-1 at 12-67 (leases and guaranties); Doc. 23-1 (Decltn. Petrone at 2-10)).
Plaintiff accepted and relied upon the Guaranties, and in consideration for the Guaranties,
entered into the Leases with Delta.
Each of the Leases required Delta to make monthly
rental payments to Plaintiff for the equipment leased.
However, Delta defaulted under
its Lease obligations by failing to pay the amounts due and owing to Plaintiff when those
amounts were due. (Id.)
Given the default, Plaintiff exercised its right to declare the following
amounts immediately due and payable: 1) for Leases 1, 2 and 3, the applicable Stipulated Loss
Value of the medical equipment leased, together with all past due and unpaid Lease Payments
and all other amounts due under these Leases; and 2) for Leases 4 and 5, all remaining lease
payments for the balance of the lease term plus the Purchase Option Price stated in these Leases,
such sum discounted in accordance with these Leases, plus all past due and unpaid lease
payments and all other amounts due under these Leases.
On February 6, 2014, Plaintiff demanded that Delta pay all accelerated amounts due
under the Leases and return the Leased Equipment to Plaintiff as provided for in the Leases.
(Doc. 23; Doc. 23-1 at 12-67 (leases and guaranties); Doc. 23-1 (Decltn. Petrone at 2-10)).
Delta failed to pay the amounts demanded.
Upon Delta's default, the Guaranties allow
Plaintiff to also proceed against Williams, individually, for all amounts due from Delta to
Plaintiff under the Leases.
As such, also on February 6th, Plaintiff demanded Williams
pay all amounts due to Plaintiff under the Leases and the Guaranties.
pay the amounts demanded.
Williams failed to
As a result of Delta's defaults on its obligations to Plaintiff
under the Leases, and pursuant to the terms of the Guaranties, Delta and Williams are liable to
Plaintiff, jointly and severally, for 100% of all amounts due to Plaintiff under the Leases.
Plaintiff removed and then sold the Leased Equipment in accordance with the terms of
the Leases and applied the net sales proceeds to the amounts due from Delta under the Leases.
(Doc. 23; Doc. 23-1 at 12-67 (leases and guaranties); Doc. 23-1 (Decltn. Petrone)).
March 27, 2015, and after giving credit for the net sale proceeds, the amount due and owing by
Delta to Plaintiff pursuant to the Leases is no less than $2,567,253.06, exclusive of attorneys’
fees and costs, consisting of the following: $1,605,990.20 --Lease 1; $730,165.33 --Lease 2;
$59,478.72 --Lease 3; $29,614.21 --Lease 4; and $141,004.40 --Lease 5.
Petrone); Doc. 23-1 at 75-80).
(Doc. 23-1 (Decltn.
Additionally, for each day after March 27, 2015, late charges
accrue as follows: $609.09 -- Lease 1; $306.61 -- Lease 2; $22.46 -- Lease 3; $11.23 -- Lease 4;
and $53.48 -- Lease 5.
Plaintiff contends that per the Leases’ terms, Delta is obligated to
pay all costs, including reasonable attorneys’ fees and amounts incurred removing, marketing,
and selling the equipment, as incurred in the enforcement of the Leases.
Plaintiff asserts that as of March 31, 2015, it has incurred $57,590.79 in attorneys’ fees
and costs enforcing its rights and remedies under the Leases. (Doc. 23; Doc. 23-1 (Decltn.
Petrone); Doc. 23-2 (Decltn. Jackson); Doc. 23-3 (Aff. Callaway)). Plaintiff also seeks $15,000
more in attorneys’ fees to cover “estimated future” such fees and costs.
On May 20, 2014, Plaintiff filed a 10 count Complaint against Delta and Williams for the
breaches of the five (5) leases and five (5) guaranties.
On March 24, 2015, a Clerk’s
entry of default was issued against Delta and Williams for failure to plead or otherwise defend
Plaintiff now moves for entry of a default judgment, submitting the
Declaration of O’Neil Petrone, Declaration of Daniel P. Jackson, and Affidavit of Henry A.
Callaway, in support.
(Docs. 23-1, 23-2, 23-3).
Plaintiff seeks a default judgment against the
Defendants in the amount of $2,567,253.06, plus the amounts due under the Leases, late
charges in the amount of $1,002.87/day after March 27, 2015 through entry of judgment,
post-judgment interest at the applicable rate, and $72,590.79 in attorneys’ fees, costs and
Standard of Review
The Federal Rules of Civil Procedure establish a two-part process for obtaining a default
judgment. Fed.R.Civ.P. 55.
If “a party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party’s default.” Fed.R.Civ.P. 55(a).
After default has
been entered, if the “claim is for a sum certain or a sum that can be made certain by
computation” the clerk must enter default judgment.
In all other
circumstances, such as here, “the party must apply to the court for a default judgment.”
Rule 55(b)(2) of the Federal Rules of Civil Procedure provides, in relevant part, as
follows with regard to entering a default judgment:
(b) Entering a Default Judgment.
(2) By the Court. In all other cases, the party must apply to the court for a default
judgment. A default judgment may be entered against a minor or incompetent
person only if represented by a general guardian, conservator, or other like
fiduciary who has appeared. If the party against whom a default judgment is
sought has appeared personally or by a representative, that party or its
representative must be served with written notice of the application at least 7 days
before the hearing. The court may conduct hearings or make referrals--preserving
any federal statutory right to a jury trial--when, to enter or effectuate judgment, it
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
The Eleventh Circuit has held that although “a default is not treated as an absolute
confession by the defendant of his liability and of the plaintiff's right to recover, a defaulted
defendant is deemed to admit the plaintiff's well-pleaded allegations of fact. The defendant,
however, is not held to admit facts that are not well-pleaded or to admit conclusions of law.”
Tyco Fire & Sec., LLC v. Alcocer, 218 Fed. Appx. 860, 863 (11th Cir. 2007) (per curiam)
(citations and internal quotations omitted).
Moreover, “before entering a default judgment for
damages, the district court must ensure that the well-pleaded allegations of the complaint ...
actually state a cause of action and that there is a substantive, sufficient basis in the pleadings for
the particular relief sought.”
Id. (emphasis omitted).
“prima facie liability case” against the defendants.
Therefore, Plaintiff must establish a
Pitts ex rel. Pitts v. Seneca Sports, Inc., 321
F. Supp. 2d 1353, 1357 (S.D. Ga. 2004) (citations omitted). Further, when assessing damages,
the Court has “an obligation to assure that there is a legitimate basis for any damage award it
enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003).
is a strong policy of determining cases on their merits” and therefore defaults are viewed “with
disfavor.” In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003).
case involves a default judgment there must be strict compliance with the legal prerequisites
establishing the court's power to render the judgment.”
Varnes v. Local 91, Glass Bottle
Blowers Ass'n of U.S. and Canada, 674 F.2d 1365, 1369 (11th Cir. 1982).
relating to the amount of damages are not admitted by virtue of default. Rather, the Court
determines the amount and character of damages to be awarded.” Miller v. Paradise of Port
Richey, Inc., 75 F.Supp.2d 1342, 1346 (M.D. Fla. 1999).
At the outset, the Court is satisfied that Plaintiff has extensively pursued sufficient legal
avenues to endeavor to effect proper service on both Delta and/or Williams, including service via
publication in newspapers of general circulation and service via the Mississippi Secretary of
State’s office per Miss. Code § 79-35-13, based on defendants’ apparent avoidance of service.
(Docs. 16, 17). Additionally, a Clerk’s entry of default was issued against the Defendants in
accordance with Rule 55(a) for failure to plead, answer or otherwise defend this case.
And while the undersigned typically requires evidence that the defendants against whom a
default is sought be provided with notice of the default proceedings against them, the record
indicates that the Defendants have been avoiding service and as such, there does not appear to be
any way for such notice to be provided (e.g., a certificate of service issued to the defendants’
addresses set forth in the initial Summons would be essentially ineffective or futile).
Doc. 22 (Clerk’s Entry of Default returned as undeliverable to the Court).
Defendants were served with process via newspaper publication newspaper and the Mississippi
Secretary of State.
(Docs. 11, 12, 18).
Given the unique circumstances of this case, the Court
finds that no further notice of default proceedings to the defendants is necessary.
Moreover, a hearing is not necessary because Plaintiff seeks a sum certain ascertainable
from the submitted Declarations, Affidavit, leases, and guaranties, and the allegations in the
Securities and Exchange Commission v. Smyth, 420 F.3d 1225, 1231-1232 (11th
Cir. 2005) (“Judgment of default awarding cash damages could not properly be entered without a
hearing unless the amount claimed is a liquidated sum or one capable of mathematical
calculation) (internal quotes and citations omitted); Id. at n.13 (noting that an “evidentiary
hearing is not a per se requirement; indeed, Rule 55(b)(2) speaks of evidentiary hearings in a
permissive tone....We have held that no such hearing is required where all essential evidence is
already of record”).
Further, as to the merits of Plaintiff’s complaint, a court may enter a default judgment
only if the factual allegations of the complaint, which are assumed to be true, provide a sufficient
legal basis for such entry.
Nishimatsu Const. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206
(5th Cir. 1975) (“The defendant is not held to admit facts that are not well-pleaded or to admit
conclusions of law”).
In considering a motion for default judgment, a court must “examine
the sufficiency of plaintiff's allegations to determine whether the plaintiff is entitled to” a default
Fidelity & Deposit Co. v. Williams, 699 F. Supp. 897, 899 (N.D. Ga. 1988).
Court is satisfied that the well-pleaded allegations of the Complaint state a basis for relief as to
the claims asserted and that there is a substantive, sufficient basis for the relief Plaintiff seeks.
Specifically, Plaintiff asserts 10 counts in the complaint against defendants for Delta and
Williams’ respective breaches of the leases and guaranties due to default (non-payment).
alleged, between December 2010 and August 2012, Plaintiff and Delta entered into certain leases
personally guaranteed by Williams, through which Delta leased specific medical equipment from
Plaintiff, in connection with a December 8, 2010 Master Lease: 1) Lease 1--Leasing Schedule
#20700-16317 (contract #130-0002825-000) and Lease 1 Guaranty; 2) Lease 2--Leasing
Schedule #20701-16318 (contract #110-0001996-000) and Lease 2 Guaranty; 3) Lease
3--Leasing Schedule #20917-17814 (contract #110-0002038-000) and Lease 3 Guaranty; 4)
Lease 4--Leasing Schedule #222058-30180 (contract #121-0000201-000) and Lease 4 Guaranty;
and 5) Lease 5--Leasing Schedule #21938-30004 (contract #130-0003060-000) and Lease 5
(Doc. 1; Doc. 23; Doc. 23-1 at 12-67 (leases and guaranties); Doc. 23-1 (Decltn.
Petrone at 2-10)).
All relevant documents are governed by New Jersey law.1
1 The Master Lease provides that New Jersey law governs any and all disputes concerning the leases:
15. MISCELLANEOUS….THE AGREEMENT ANDTHE LEASE SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF….
(Doc. 1-1 at 12 (The Master Lease Agreement (emphasis added)).
These leases provide that Middlesex, New
Breach of contract against Delta: Counts One through Five
Under New Jersey law, to establish breach of contract, a plaintiff must show: 1) the
existence of a contract between the parties; 2) breach of that contract; 3) damages flowing from
the breach; and 4) that plaintiff performed its own contractual obligations.
Frederico v. Home
Depot, 507 F.3d 188, 203 (3rd Cir. 2007); Crescent Trading, LLC v. Chera, 2010 WL 3932892,
*7 (N.J. Super. A.D. 2010). “Failure of a party to an agreement to perform a contractual
obligation constitutes a breach of the contract.
Franconia Assocs. v. United States, 536 U.S.
129, 142-43…(2002) (‘Failure by the promisor to perform at the time indicated for performance
in the contract establishes an immediate breach’); Looman Realty Corp. v. Broad St. Nat'l Bank
of Trenton,…180 A.2d 524 (App. Div.) (noting that “in law an action for breach of contract is
founded upon a mere nonperformance”); RESTATEMENT (SECOND)
CONTRACTS § 235(2)
(1979) (‘When performance of a duty under a contract is due any non-performance is a breach.’).
Jersey is the court of jurisdiction for all actions/proceeding relating to the leases:
15. MISCELLANEOUS……LESSOR AND LESSEE AGREE THAT ALL ACTIONS OR
PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THE LEASE AND THE
TRANSACTION CONTEMPLATED HEREBY MAY BE LITIGATED IN THE FEDERAL,
STATE OR ·LOCAL COURTS SITTING IN OR FOR THE COUNTY OF MIDDLESEX, NEW
JERSEY, AND…SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS ….
(Docs. 1-1 at 3, 16, 23, 31, 38 (Leases 1, 2, 3, 4, 5) (emphasis added). Moreover, the personal guaranties provide
that the law of the State of New Jersey governs all legal rights and obligations:
….LEGAL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE DETERMINED. IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT GIVING
EFFECT.TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF. GUA R A N T O R S
A C K N O W L E D G E THAT THIS GUARANTY AND THE CONTRACT ARE INTEGRAL
AGRE;EMENTS TO AN OVERALL TRANSACTION. ACCORDINGLY, GUARANTORS AGREE
TO BE BOUND BY THE TERMS OF THE FORUM SELECTION CLAUSE IN THE CONTRACT, AND
FURTHER AGREE THAT ALL ACTIONS AND PROCEEDINGS RELATING DIRECTLY OR
INDIRECTLY TO THIS GUARANTY AND/OR THE TRANSACTION CONTEMPLATED HEREIN MAY
BE LITIGATED IN ANY FEDERAL, STATE OR LOCAL COURT (a) SITTING IN OR FOR THE
COUNTY OF MIDDLESEX NEW JERSEY AND/OR (b) IN WHICH JURISDICTION IS
PROPER OVER THE CUSTOMER, AND GUARNATORS HERBY CONSENT AND SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURTS….
(Doc. 1-1 at 52, 56, 59 (emphasis added)).
Indeed, when a ‘lessor or lessee fails to perform a covenant on his part to do or refrain from
doing a stipulated thing, the injured party may maintain an action for the breach’ of contract.
Cohen v. Wozniak,…85 A.2d 9 (Ch. Div. 1951) (citations omitted).” Crescent Trading, 2010
WL 3932892, *7 (some internal citations omitted).
As to the first element, Plaintiff submitted a copy of the Master Lease (Doc. 23-1 at
19-23), evidencing a contract existed with Delta.
The Master Lease provides, in relevant part,
as follows regarding default, interest, late charges, attorneys’ fess and costs/expenses:
2. TERM AND LEASE PAYMENTS:…..Lessee agrees to pay on demand, as a late
charge, 1.3% per month, limited by the maximum rate permitted by law, of each overdue
amount (including accelerated balances) under the Lease, whether such amount is due or
not due after a Default….
9. DEFAULT AND REMEDIES: (a) Any one or more of the following shall constitute
a default by Lessee under the Lease….(i) failure by lessee to pay any amounts under the
Lease when due and such remains unremedied for a period of ten (10) days from the due
date thereof, or (ii)…failure by Lessee to comply with any other provisions or perform
any of its other obligations arising under the Lease or under any other documents or
agreements relating to the Lease, and such remains unremedied by Lessee for a period of
twenty (20) days, or…..or (vii) a default by an Obligor under any Lease, guaranty or
other agreement or note with Lessor, or with any assignee of the Lease, or under any
agreement with any other party that Lessor's sole opinion is a material agreement….
(b) Upon the occurrence of any Default, Lessor may exercise any one or more of the
following remedies (which remedies shall be cumulative, and may be exercised
simultaneously, in each case to the extent permitted by law) (i) cancel or terminate the
Lease and/or any unfunded commitments or proposals to Lessee, whether related to the
Lease or otherwise, (ii) secure peaceable repossession and removal of the Equipment by
Lessor or its agent without judicial process, (iii) demand and Lessee shall return the
Equipment to Lessor in accordance with Section 11 hereof, (iv) sell, lease or otherwise
dispose of the Equipment at public or private sale without advertisement or notice except
that required by law, upon such terms and at such place as Lessor may deem advisable,
and Lessor may be the purchaser at any such sale (if any such notice is required, Lessor
and Lessee agree that ten (10) days notice shall be deemed to be commercially
reasonable), (v) demand and Lessee shall pay all expenses in connection with the
Equipment relating to its retaking, refurbishing, selling, leasing or the like, and (vi)
exercise any other right or remedy which may be available to it under the Uniform
Commercial Code (“UCC”) or any other applicable law. To the extent permitted by
applicable law, Lessee waives all rights it may have to limit or modify any of Lessor's
rights and remedies hereunder, including but not limited to, any right of Lessee to require
Lessor to dispose of or marshal the Equipment or otherwise mitigate its damages
(c) If Option A has been selected, Lessor may exercise the following remedy, as provided
herein, in addition to the remedies set forth in Section 9(b) above (which remedies shall
be cumulative, and may be exercised simultaneously, in each case to the extent permitted
by law). By notice to Lessee, as liquidated damages for loss of a bargain and not as a
penalty, declare the Stipulated Loss Value of the Equipment calculated for the Payment
Period Immediately following the date of such notice immediately due and payable,
together with (i) all past due and unpaid Lease Payments through such Payment Period,
and (ii) all other amounts due and unpaid under the Lease (including late charges),
whereupon such shall become immediately due and payable. In the event, however, that
no Stipulated Loss Value Schedule was included in the transaction, Lessor may,
alternatively, declare all remaining Lease Payments for the balance of the Lease Term
discounted at a per annum rate of five percent (5%), together with any loss or damage to
Lessor's residual interest in the Equipment pursuant to Section 2A-532 of the UCC, plus
all past due and unpaid lease Payments and all other amounts due and unpaid under the
Lease (including late charges), immediately due and payable in full, whereupon such
shall become immediately due and payable…..
….15. MISCELLANEOUS:….In the event that Lessee falls to meet any of its
obligations under the Lease, Lessor may at its option satisfy any of such obligations and
Lessee shall, upon demand, reimburse Lessor for all costs…together with interest thereon
at the late charge rate specified above. In the event that legal or other action is required to
enforce Lessor's rights under the Lease (including the exercise of remedies under Section
9 hereof), Lessee agrees to reimburse Lessor on demand for its reasonable attorneys' fees
and its other related costs and expenses, (whether incurred prior to or after judgment)…If
Option A…has been selected, Lessor and Lessee agree that (i) the Lease is a "finance
lease'' as that term is defined in Article 2A of the UCC, and (ii) Lessor shall be entitled to
all the benefits applicable to a transaction that qualifies as a finance lease under Article
2A of the UCC. THE AGREEMENT AND THE LEASE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW JERSEY WITHOUT GIVING EFFECT TO THE PRINCIPLES OF
CONFLICT OF LAWS THEREOF.
(Doc. 23-1 at 19, 21, 22 (Sections 2, 9, 15) (emphasis in original)). Additionally, Plaintiff
submitted copies of the five (5) related leases (also referenced as leasing schedules), which show
that contracts existed with Delta, which stem from the Master Lease.
(Doc. 23-1 at 25-48).2
None of these leases (leasing schedules) provide for default, interest, late charges, attorneys’ fess
or costs/expenses; instead, they refer to and rely upon the terms of the Master Lease, pursuant to
2 Within these leases Delta chose “Option A”—Fair Market Value Purchase Option.
which they were executed.
Regarding the remaining elements of breach of contract under New Jersey law, the Court
finds as follows. Plaintiff has sufficiently alleged breaches of the Master Lease and leases due to
Delta’s defaults for its failure to pay the amounts due/owing per those contracts’ terms.
has failed to appear and thus there is no dispute before the Court as to its breaches/defaults.
for damages, Plaintiff notified Delta of its defaults and demanded in writing payment of the
amounts due. Delta failed to pay Plaintiff what was owed.
Plaintiff thus invoked its rights to
recovery under the terms of the Master Lease and leases, indicating the damages it has sustained.
As to Plaintiff’s performance, there is no evidence of its failure to perform its obligations under
the Master Lease or leases, and Plaintiff asserts that it fully performed same.
consideration of the foregoing, the Court finds that Plaintiff is entitled to a default judgment
against Delta for the breaches of the Master Lease and equipment leases (Counts One through
Five) as a matter of New Jersey law.
Breach of guaranty against Williams (Counts Six through Ten)
To establish a claim for breach of a guaranty under New Jersey law, a plaintiff must
show: 1) execution of the guaranty by the defendant; 2) the principal obligation and terms of the
guaranty; 3) lender's reliance on the guaranty; 4) default; 5) written demand for payment on the
guarantor; and 6) failure of guarantor to pay upon written demand.
DelGuercio, 818 F.Supp. 725, 727–728 (D.N.J. 1993).
United States v.
Plaintiff submitted copies of the five (5)
guaranties which show their execution between Plaintiff and Williams (by Williams, in order to
guaranty Delta’s obligations under the leases and Master Lease), and which were executed
pursuant to the Master Lease and leases.
(Doc. 23-1 at 50-67).
The guaranties provide, in
relevant part, as follows as to the extent of the guaranties, performance, default, expenses, costs,
and reasonable attorneys’ fees:
For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and in order to induce SFS to enter into the Contract and/or to grant
certain financial or other accommodations related to the Contract, the undersigned
guarantors (herein "Guarantors") jointly and severally unconditionally guarantee to SFS,
the full and prompt payment and performance by Customer of the Guaranteed
Guarantor acknowledge that their liability hereunder is several, independent and separate
from the obligations and liabilities of any other guarantor. Guarantors agree that it shall
not be necessary as a condition to enforce this Guaranty that suit first be instituted against
Customer or that any rights or remedies against Customer first be exhausted, it being
agreed that the liability of Guarantors hereunder shall be primary, direct, and in all
respects unconditional. Guarantors agree that if the maturity of any of the Guaranteed
Obligations is accelerated, by default or otherwise, such shall also be deemed accelerated
for the purpose of this Guaranty, and without demand upon or notice to Guarantors…..
…This Guaranty and the obligations of Guarantors hereunder shall continue in full force
and effect until the Guaranteed Obligations shall have been indefeasibly paid or
otherwise performed in full. Guarantors shall reimburse SFS on demand for all expenses
incurred by it in the enforcement or attempted enforcement of any of its rights against
Customer and Guarantors (including costs and reasonable attorneys' fees)….
(Doc. 23-1 at 50-67).
As to the elements for breach of guaranty, the Court finds as follows. The evidence
shows execution of the guaranties with Plaintiff by Williams.
The guaranties explain Williams’
principal obligation and terms of the guaranties themselves.
Plaintiff also relied on the
The evidence indicates that Williams defaulted under the guaranties due to his
failure to pay the sums due and owing under the Master Lease and leases.
made written demand for payment on the guarantor, Williams, yet he failed to pay what was
Moreover, Plaintiff’s reliance on the guaranties is clearly expressed in the
documents themselves, which provide that the guaranties are intended “in order to induce SFS
[Plaintiff] to enter into the Contract and/or to grant certain financial or other accommodations
related to the Contract” (meaning the Master Lease and leases for the medical equipment).
Upon consideration of the foregoing, the Court finds that Plaintiff is entitled to default judgment
against Williams under the guaranties (Counts Six through 10) as a matter of New Jersey law.
Plaintiff requests – “after giving credit for the Net sale Proceeds” -- entry of a final
default judgment against the Defendants in the amount of $2,567,253.06 due under the Leases,
plus late charges in the amount of $1,002.87/day through entry of judgment and post-judgment
interest at the applicable rate.
Specifically, Plaintiff seeks the following (with late charges
continuing to accrue) in addition to post-judgment interest: 1) Lease 1 -- $1,605,990.20 plus
$609.09 in late charges; 2) Lease 2 -- $730,165.33 plus $306.61 in late charges; 3) Lease 3 -$59,478.72 plus $22.46 in late charges; 4) Lease 4 -- $29,614.21 plus $11.23 in late charges; and
5) Lease 5 -- $141,004.40 plus $53.48 in late charges.
(Doc. 23-1 (Decltn. Petrone and Ex. N
Upon review of the Master Lease, leases and guaranties, calculations submitted and
Declaration filed in support, the Court is satisfied that the amounts requested are due and owing
to Plaintiff by defendants.
As such, that portion of Plaintiff’s motion for entry of default
judgment damages, addressing the breach of contract and breach of guaranty claims, is
GRANTED such that Plaintiff is awarded $2,567,253.06.
Plaintiff also seeks an accrued late
charge of $1,002.87/day through entry of judgment, which is also awarded.
As for Plaintiff’s
request for post-judgment interest, such is further awarded at the applicable rate.
Attorneys’ Fees & Costs/Expenses
Plaintiff seeks recovery of $72,590.79 in reasonable attorneys’ fees and costs/expenses,
plus $15,000 for future fees and costs/expenses (for post-judgment collection work), for the law
firms of Vedder Price and Hand Arendall, per the Declaration of O’Neil Petrone, Declaration of
Daniel P. Jackson, and Affidavit of Henry A. Callaway, filed in support. (Doc. 23; Doc. 23-1
(Decltn. Petrone); Doc. 23-2 (Decltn. Jackson); Doc. 23-3 (Aff. Callaway)).
The Court is unable to assess fees and costs/expenses at this juncture and thus is not
presented with a “sum certain” from which to completely resolve the motion for default
judgment. Plaintiff has not provided any supporting documentation regarding its request for
attorneys’ fees and costs/expenses, or referenced that portion of the Master Lease, leases and/or
guaranties which provide for recovery of same.
Likewise, Plaintiff has not provided any
attorneys’ billing records, invoices and/or itemized statements, complete information about all of
the individuals who billed for legal services or their qualifications/years of experience, and/or
whether the fees and costs were reasonably incurred under the relevant state’s law (New Jersey)
governing such awards.
Moreover, Plaintiff seeks to recover an additional $15,000 in future
attorneys’ fees and costs/expenses without providing any legal basis for such recovery (whether
under the relevant contracts or under New Jersey law).
As such, the Court RESERVES RULING on this request and Plaintiff is ORDERED to
file, on or before May 11, 2015, a Supplement to its motion addressing the items noted above,
and further: 1) citing those provisions in the Master Lease, leases, and guaranties which provide
for recovery of fees and costs/expenses, and assessing the propriety of recovery of same under
New Jersey law; 2) attaching whatever materials it deems necessary and appropriate to support
its claim for fees and costs/expenses in conjunction with New Jersey law and; and 3) explaining
the propriety of recovery of future (not yet incurred) fees and costs/expenses under New Jersey
law and citing the relevant portions of the contracts providing for same.3
Accordingly, Plaintiff’s motion for default judgment is GRANTED in part insofar as a
3 The Court notes that.
It is recommended that Plaintiff also identify such specific portions in the
default judgment is entered in its favor and against Defendants concerning the 10 counts in the
Complaint in the amount of 2,567,253.06, plus late charges in the amount of $1,002.87/day
through entry of judgment and post-judgment interest at the applicable rate, but RESERVE
RULING in part with regard the request for attorneys’ fees and costs/expenses.
Plaintiff has been given leave to Supplement this portion of its motion such that this
Court will fully resolve the motion for default judgment after receipt and review of said
Supplement, entering a “sum certain” as well as a final judgment, at that time.
DONE and ORDERED this the 4th day of May 2015.
_s/Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?