DAYS INNS WORLDWIDE, INC. v. PRAMUKH HOSPITALITY, LLC et al
Filing
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OPINION. Signed by Judge William J. Martini on 6/15/16. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
DAYS INNS WORLDWIDE, INC.,
Civ. No. 16-00319 (WJM)
Plaintiff,
v.
PRAMUKH HOSPITALITY, LLC, et al.,
OPINION
Defendants.
Plaintiff Days Inns Worldwide Inc. (“DIW”) brings the instant unopposed
motion for default judgment against Defendants Pramukh Hospitality, LLC,
Mahendra Patel, and Atul Patel (“Defendants”) pursuant to Rule 55(b) of the
Federal Rules of Civil Procedure. For the reasons set forth below, DIW’s motion
is GRANTED.
I.
BACKGROUND
On March 13, 2012 DIW entered into a franchise agreement (“Franchise
Agreement”) with the Defendants to operate a 41 room-Days Inn in Delta,
Colorado. (Compl., ECF No. 1, ¶ 10.) Defendants personally guaranteed the
agreement. (See id. ¶ 18-19.) In accordance with the Franchise Agreement,
Defendants were required to make certain periodic payments to DIW, which
included interest if past due. (Id. ¶ 12-13.) On March 29, 2013 the Defendants lost
possession of the facility to a third party. (Id. ¶ 21.) The same day, DIW sent
letters to the Defendants informing them that the Franchise Agreement had been
violated and that they were required to provide all outstanding payments. (Id. ¶
22.) Upon Defendants failing to do so, DIW commenced the instant action seeking
payment of the outstanding fees in the amount of $78,776.29, which includes
interest at a rate of 1.5% per month as delineated in the Franchise Agreement. (See
id. ¶ 40; Aff. Suzanne Fenimore Supp. Mot. Final J. by Default (“Fenimore Aff.”),
ECF No. 8-3, ¶ 18.)
DIW commenced this action on January 19, 2016. (ECF No. 1.) The
complaint was served on February 15, 2016. (ECF No. 5.) Accordingly, the time
for Defendants to respond to the Complaint expired on March 7, 2016. (Id.)
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Defendants have failed to answer or respond to the Complaint to date. The Clerk
entered Default against the Defendants on April 13, 2016, which was served upon
Defendants. (ECF No. 8; Certification of Bryan P. Couch, ECF No. 8-2, ¶ 10.)
DIW then filed the instant motion for default judgment on April 20, 2016.
II.
DISCUSSION
The mere fact of default does not entitle Plaintiff to judgment. To enter
default judgment, the court must first determine whether a sufficient cause of
action has been stated, taking as true the factual allegations of the Complaint. See
Chanel Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535-36 (D.N.J. 2008). Once a
cause of action has been established, “[b]efore 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 Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)).
Although the facts plead in the Complaint are accepted as true, Plaintiff must prove
damages. See Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
The Court finds that based on the facts set forth by DIW default judgment
should be entered. DIW has put forth a valid cause of action based on a breach of
the Franchise Agreement. See Ramada Worldwide Inc. v. Courtney Hotels USA,
LLC, No. 11–896, 2012 WL 924385, at *3 (D.N.J. Mar. 19, 2012) (stating that to
establish a breach of contract claim, a plaintiff has the burden of showing: “(1) a
valid contract, (2) breach of that contract, and (3) damages resulting from that
breach.”) Accordingly, since there is sufficient evidence on the record that
Defendants entered into and breached the Franchise Agreement, the Court finds
that there is no basis for Defendants to claim a meritorious defense. Additionally,
the Court finds that Plaintiff has been prejudiced by Defendants’ failure to respond,
because it has been prevented from moving forward with its case and receiving the
requested relief. Lastly, where a defendant has failed to respond, this failure
“evinces [a defendant’s] culpability in its default.” Teamsters Pension Fund of
Philadelphia & Vicinity v. Am. Helper, Inc., No. CIV. 11-624 JBS/JS, 2011 WL
4729023, at *4 (D.N.J. Oct. 5, 2011).
As to damages, DIW has submitted sufficient evidence to support its request
for damages totaling $78,776.29. (See Fenimore Aff., Ex. D.)
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III.
CONCLUSION
For the above reasons, Plaintiff’s motion for default judgment is
GRANTED.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: June 15, 2016.
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