CERTUSBANK NA v. DUKES
ORDER GRANTING 9 Motion for Default Judgment. Judgment shall be entered against Dukes in the amount of $1,186,131.33, plus additional interest and attorney's fees accruing after May 15, 2014 and the date judgment is entered. Ordered by U.S. District Judge MARC THOMAS TREADWELL on 6/2/2014. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
CERTUSBANK, N.A., as successor in
interest to ATLANTIC SOUTHERN
JOHN J. DUKES,
CIVIL ACTION NO. 5:14-CV-50 (MTT)
Before the Court is the Plaintiff’s motion for default judgment. (Doc. 9). For the
following reasons, the motion is GRANTED.
Mud Three, LLC (“Mud”), through its member Ronald K. Howell, executed and
delivered to Atlantic Southern Bank a commercial loan agreement dated August 11,
2010. (Doc. 1, ¶ 9; Doc. 1-2). The same date, Mud also executed and delivered to
Atlantic Southern Bank a promissory note and security agreement in the original
principal amount of $1,252,393.93, and Defendant John J. Dukes was among those
who executed a Guaranty on the loan. (Doc. 1, ¶¶ 11, 15; Doc. 1-3; Doc. 1-5). Under
the Guaranty, Dukes absolutely and unconditionally guaranteed payment and
performance of Mud’s debt to Atlantic Southern Bank. (Doc. 1, ¶ 17; Doc. 1-5).
The note matured on August 11, 2011. (Doc. 1, ¶ 19; Doc. 1-3). Mud defaulted
on the note by failing to make the necessary payments and failing to pay the amounts
outstanding on the maturity date. (Doc. 1, ¶¶ 20-21). On July 20, 2012, the Plaintiff
sent notice of non-payment and demand for payment under the loan documents to
Dukes via certified mail and regular first class mail. (Doc. 1, ¶ 22; Doc. 1-6). In the
demand letter, the Plaintiff provided notice to Dukes pursuant to O.C.G.A. § 13-1-11
that it would enforce provisions of the note providing for payment of attorneys’ fees if the
amount due under the note was not paid within ten days. (Doc. 1, ¶ 24; Doc. 1-6). The
Plaintiff is the current holder of the loan documents by virtue of purchase and
assignment from the Federal Deposit Insurance Corporation as Receiver for Atlantic
Southern Bank. (Doc. 1, ¶ 18).
The Plaintiff filed suit February 4, 2014, alleging claims for breach of the
Guaranty and unjust enrichment and seeking attorney’s fees and litigation costs. (Doc.
1). On February 26, 2014, Dukes was personally served at his residence with a
summons and copy of the complaint. (Doc. 7). He has since failed to plead or
otherwise defend against the suit. On April 25, 2014, the Clerk of the Court entered
default against Dukes. The Plaintiff now moves the Court for default judgment. (Doc.
9). Dukes has not responded to the motion.
Pursuant to Fed. R. Civ. P. 55(a), the Clerk must enter a party’s default if that
party’s failure to plead or otherwise defend an action against it “is shown by affidavit or
otherwise.” After default has been entered, the Clerk may enter a default judgment on
the plaintiff’s request if the claim “is for a sum certain or a sum that can be made certain
by computation,” as long as the party is not a minor or incompetent and has not made
an appearance. Fed. R. Civ. P. 55(b)(1). In all other cases, the plaintiff must apply to
the Court for a default judgment. Fed. R. Civ. P. 55(b)(2). The Court must hold an
evidentiary hearing to determine damages unless all the essential evidence is already
on the record. See S.E.C. v. Smyth, 420 F.3d 1225, 1232 n.13 (11th Cir. 2005); see
also Fed. R. Civ. P. 55(b)(2).
After the Clerk’s entry of default, the defendant is deemed to admit all wellpleaded factual allegations in the complaint. Nishimatsu Const. Co., Ltd. v. Houston
Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).1 An entry of default against the
defendant does not establish the plaintiff is entitled to a default judgment, however. The
defendant is not deemed to admit facts that are not well-pleaded or admit conclusions of
law. Id. “The Court must consider whether the unchallenged facts constitute a
legitimate cause of action, since the party in default does not admit a mere conclusion
of law. In considering any default judgment, the Court must consider (1) jurisdiction,2
(2) liability, and (3) damages.” Johnson v. Rammage, 2007 WL 2276847, at *1 (M.D.
Ga.) (citing Pitts v. Seneca Sports, Inc., 321 F. Supp. 2d 1353 (S.D. Ga. 2004)). The
defendant is not deemed to admit the plaintiff’s allegations relating to the amount of
damages. Patray v. Nw. Publ’g, Inc., 931 F. Supp. 865, 869 (S.D. Ga. 1996); see also
Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003) (“A court has an
obligation to assure that there is a legitimate basis for any damage award it enters
The Eleventh Circuit has adopted as binding precedent the decisions of the former Fifth Circuit
rendered prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.
1981) (en banc).
The complaint establishes the Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332
and that the Court has personal jurisdiction over the Defendant. (Doc. 1 at ¶¶ 1-8).
The Court finds that the factual allegations in the complaint and the attached loan
documents, deemed admitted by Dukes, establish the Plaintiff has a right to recover the
amounts due pursuant to the promissory notes and loan agreements for Duke’s failure
to pay the amounts owed under the note upon Mud’s default. No evidentiary hearing is
necessary to determine damages because there is enough evidence on record. The
evidence shows that as of May 15, 2014, Dukes is liable for $1,036,821.57 in principal,
accrued interest, and late charges and fees on the promissory note. Dukes is further
liable for additional interest accruing at a rate of $109.09 per day from May 15, 2014
through the day that judgment is entered in this case. Additionally, the Plaintiff is
entitled to post-judgment interest under 28 U.S.C. § 1961 and O.C.G.A. § 7-4-12.
Pursuant to O.C.G.A. § 13-1-11(a), “[o]bligations to pay attorney's fees upon any
note or other evidence of indebtedness … shall be valid and enforceable and
collectable as a part of such debt if such note or other evidence of indebtedness is
collected by or through an attorney after maturity.” If the provision provides for
attorneys’ fees in the amount of a percentage of the principal and interest due, “such
provision and obligation shall be valid and enforceable up to but not in excess of 15
percent of the principal and interest owing on said note or other evidence of
indebtedness.” O.C.G.A. § 13-1-11(a)(1). A party seeking to collect attorneys’ fees
allowed by this statute must give the debtor written notice after maturity, and the notice
must state the debtor has ten days to pay the principal and interest due without being
liable for attorneys’ fees. O.C.G.A. § 13-1-11(a)(3). If all these requirements are met,
the provision for attorneys’ fees is enforceable. TermNet Merch. Servs., Inc. v. Phillips,
277 Ga. 342, 344, 588 S.E.2d 745, 747 (2003).
The factual allegations in the complaint and attached demand letters show the
above requirements have been met. Therefore, pursuant to the terms of the loan
agreements, Dukes is liable for attorneys’ fees in the amount of $149,309.76, which is
15 percent of the principal and accrued interest due on the loans as of May 15, 2014.
The Plaintiff is also entitled to attorney’s fees as they accrue and continue to accrue
under the terms of the loan agreement and note.
The Plaintiff’s motion for default judgment (Doc. 9) is GRANTED. Judgment
shall be entered against Dukes in the amount of $1,186,131.33, plus additional interest
and attorney’s fees accruing after May 15, 2014 and the date judgment is entered.
SO ORDERED, this 2nd day of June, 2014.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
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