TRAVELODGE HOTELS, INC. v. YOUNG BROTHERS PROPERTIES, INC. et al

Filing 8

OPINION. Signed by Judge William J. Martini on 6/18/15. (gh, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

TRAVELODGE HOTELS, INC.,

Civ. No. 2:14-7791 (WJM)

Plaintiff,
OPINION
V.

YOUNG BROTHERS PROPERTIES, INC.,
et aL
Defendants.

THIS MATTER comes before the Court on Plaintiff Travelodge Hotels, Inc.’s
motion for default judgment against Defendants Young Brothers Properties, Inc. and
Edward L. Young, made pursuant to Federal Rule of Civil Procedure 55(b)(2). Plaintiff
commenced this action on December, 15 2014.

ECF No. 1.

Plaintiff served the

Complaint on Defendants on January 18, 2015. ECF No. 5. The Complaint alleges that
Plaintiff and Young entered into a license agreement under which Young was required to
pay Plaintiff a portion of revenue he received from running a Travelodge guest lodging
facility. It further alleges that Young provided Plaintiff with a Guaranty of Defendant
Young Brothers Properties, Inc.’s obligations under the licensing agreement. According
to the Complaint, Defendants breached the licensing agreement because they failed to
pay Plaintiff the agreed-upon portion of revenues they received while operating their
Travelodge facility.

The time for Defendants to answer or otherwise respond to the Complaint expired.

See Fed. R. Civ. P. 12(a).

To date, Defendants have failed to answer or otherwise

respond to the Complaint. Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk
entered a Default against Defendants on February 26, 2015. Plaintiff served Defendants
with notice of its motion for default judgment on May, 18 2015, and filed the motion on
May 19, 2015. ECF No. 7. No opposition has been filed. This Court has subject matter
jurisdiction pursuant to 28 U.S.C.

§ 1332.

“Before imposing the extreme sanction of default, district courts must make
explicit factual findings as to: (1) whether the party subject to default has a meritorious
defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of

the party subject to default.” Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds,
250 F.R.D. 171, 177 (D.N.J. 2008) (citing Encasco Ins. Co. v. Sambrick, 834 F.2d 71, 74
(3dCir. 1987)).
After reviewing the record, the Court concludes that Plaintiff is entitled to default
judgment. First, the Court finds that Defendants do not have a meritorious defense to
Plaintiffs claims; Plaintiff has provided ample evidence that Defendants entered into and

then breached a license agreement. See Days Inns Worldwide, Inc. v. LT Hospitality,
Inc.,

No. 10-6125, 2011 U.S. Dist. LEXIS 76459, at *s..6 (D.N.J. July 14, 2011).

Second, Plaintiff has been prejudiced by Defendants’ failure to answer because Plaintiff

‘Plaintiff is a corporation organized and existing under the State of Delaware with its principle
place of business in New Jersey. Defendant Young Brothers Properties, Inc. is a corporation
organized under the laws of South Carolina, whereas Defendant Young is a citizen of South
7

has incurred additional costs, has been unable to move forward with the case, and has
been delayed in receiving relief. See Malik v. Hannah, 661 F. Supp. 2d 485, 490-9 1
(D.N.J. 2009). Third, because Defendants have failed to respond, there is a presumption
of culpability. See Teamsters Pension Fund of Phila. & Vicinity v. Am. Helper, Inc., No.
11-624, 2011 U.S. Dist. LEXIS 115142, at *10 (D.N.J. Oct. 5, 2011).
Moreover, the Court concludes that Plaintiff has submitted sufficient evidence to
support its request for damages pursuant to Federal Rule of Civil Procedure 55(b), and
has submitted a reasonable request for attorneys’ fees and costs in accordance with Local
Civil Rules 54.1 and 54.2. Plaintiff is therefore entitled to default judgment.

U.S.D.J.

Date: June 18, 2015

Carolina. Furthermore, the amount-in-controversy exceeds $75,000.