Channel Partners Capital, LLC v. Shafer Equipment Co.

CourtDistrict Court, M.D. Pennsylvania
DecidedMay 1, 2025
Docket1:24-cv-01637
StatusUnknown

This text of Channel Partners Capital, LLC v. Shafer Equipment Co. (Channel Partners Capital, LLC v. Shafer Equipment Co.) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Channel Partners Capital, LLC v. Shafer Equipment Co., (M.D. Pa. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

CHANNEL PARTNERS CAPITAL, : LLC d/b/a Channel Partners Equipment : No. 1:24-cv-01637 Finance, : Plaintiff : (Judge Kane) : v. : : SHAFER EQUIPMENT CO. : d/b/a SHAFER EQUIPMENT RENTAL : and TRAVIS SHAFER, : Defendants :

MEMORANDUM Before the Court is Channel Partners Capital, LLC (“Plaintiff”)’s motion for default judgment against Defendant Travis Shafer (“Defendant Shafer”). (Doc. No. 11.) As Defendant Shafer has yet to appear or defend in this action, no opposition to the motion has been filed. For the reasons that follow, the Court will grant the motion in part and deny it in part and enter default judgment in favor of Plaintiff and against Defendant Shafer. I. BACKGROUND On September 26, 2024, Channel Partners Capital, LLC (“Plaintiff”) initiated the instant action against Defendant Shafer Equipment Co. (“Defendant Company”) and Defendant Shafer. (Doc. No. 1.) The complaint alleges breach of contract against Defendant Company and breach of guaranty against Defendant Shafer. (Id.) Plaintiff is a Delaware limited liability company with its principal place of business in Minnesota that provides equipment financing to businesses. (Doc. No. 1 at 1.) Defendant Company is a Pennsylvania corporation organized under the laws of the Commonwealth, and Defendant Shafer serves as the President of Shafer Equipment Co. (Doc. Nos. 1-2 through 1-5 at 2.) According to the complaint and exhibits thereto, Plaintiff and Defendant Company entered into a series of four Equipment Finance Agreements (collectively referred to as “Agreements”), all of which contained a signed guaranty by Defendant Shafer. (Doc. Nos. 1-2 through 1-5 at 2.) On November 10, 2022, Plaintiff and Defendant Company executed a Master

Equipment Finance Agreement (“Agreement 635”), wherein Defendant Company agreed to make forty-eight (48) monthly payments of $1,486.05. (Doc. No. 1 at ¶ 11.) On November 16, 2022, Plaintiff and Defendant Company executed another Master Equipment Finance Agreement (“Agreement 638”), wherein Defendant Company agreed to make forty-eight (48) monthly payments of $845.85. (Doc. No. 1 at ¶ 12.) On December 19, 2022, Plaintiff and Defendant Company executed another Master Equipment Finance Agreement (“Agreement 504”), wherein Defendant Company agreed to make forty-eight (48) monthly payments of $1,044.10. (Doc. No. 1 at ¶ 13.) Finally, on December 20, 2022, Plaintiff and Defendant Company executed another Master Equipment Finance Agreement (“Agreement 498”), wherein Defendant Company agreed to make forty-eight (48) monthly payments of $713.69. (Doc. No. 1 at ¶ 14.)

Plaintiff’s complaint asserts in Count I that Defendant Company breached each of the Agreements by failing to make the full forty-eight (48) monthly payments. (Doc. No. 1 at ¶¶ 14– 18.) As of August 14, 2024, the outstanding balances are as follows: $52,579.93 for Agreement 635, $29,161.26 for Agreement 638, $18,911.21 for Agreement 504, and $23,776.33 for Agreement 498. (Id.) Plaintiff claims in Count II that Defendant Shafer breached the guaranties by failing to satisfy Defendant Company’s obligations under the loan agreements. On October 30, 2024, a suggestion of bankruptcy was filed for Defendant Company, extending an automatic stay of proceedings against Defendant Company.1 (Doc. No. 6.) The bankruptcy proceedings are before Chief Judge VanEck, in the United States Bankruptcy Court for the Middle District of Pennsylvania. See In Re: Shafer Equipment Co., LLC, No. 1:24-bk-

02730-HWV (Bankr. M.D. Pa. filed Oct. 30, 2024). On November 20, 2024, the Chapter 7 trustee filed a report of no distribution with the bankruptcy court, indicating that there are no assets to distribute to creditors from the estate. See id. at ECF No. 7. On April 9, 2025, the bankruptcy court entered a final decree on Defendant Company’s bankruptcy proceedings. See id. at ECF No. 16. Defendant Shafer has not answered the summons, entered an appearance, or responded in any way to the complaint since service was completed on October 7, 2024. On November 1, 2024, upon Plaintiff’s request (Doc. No. 7), the clerk entered a default against Defendant Shafer (Doc. No. 8). Plaintiff filed a motion for default judgment against Defendant Shafer on November 4,

2024, for breach of guaranty, seeking $124,428.73 in damages, plus an additional $43,550.00 for costs and attorney’s fees. (Doc. No. 11.) II. LEGAL STANDARD Default judgments are governed by a two-step process set forth under Rule 55 of the Federal Rules of Civil Procedure. An entry of default by the Clerk of Court under Rule 55(a) is a prerequisite to a later entry of a default judgment under Rule 55(b). See 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2682 (3d ed. 2007) (“Prior to

1 This stay, however, does not extend to non-debtors, such as guarantors like Defendant Shafer. By its terms, § 362(a) stays actions only against the “debtor.” See McCartney v. Integra Natal Bank North, 106 F.3d 506, 509 (3d Cir. 1997). obtaining a default judgment under either Rule 55(b)(1) or Rule 55(b)(2), there must be an entry of default as provided by Rule 55(a)”). Once the Clerk of Court has entered a default, the party seeking the default may then move the Court to enter a default judgment under Rule 55(b)(2). Entry of default does not entitle a claimant to default judgment as a matter of right. See 10

James Wm. Moore et al., Moore’s Federal Practice § 55.31 (Matthew Bender 3d ed. 2010). Rather, decisions relating to the entry of default judgments are committed to the sound discretion of the district court. See Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987). Three factors control the exercise of the Court’s discretion in assessing whether default judgment should be granted following the entry of default: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant’s delay is due to culpable conduct.” See Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984)). If, however, the defendant has been properly served but fails to appear, plead, or defend an action, a court may “enter a default judgment based solely on the fact that the default

occurred,” without considering the Chamberlain factors. See Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 177 n.9 (3d Cir. 1990). This Court has found “[w]hen a defendant has failed to appear or respond in any fashion to the complaint, this analysis is necessarily one-sided; entry of default judgment is typically appropriate in such circumstances at least until the defendant comes forward with a motion to set aside the default judgment under Rule 55(c).” See Deutsche Bank Nat. Trust Co. v. Strunz, No. 1:12-cv-01678, 2013 WL 122644, at *1 (M.D. Pa. 2013) (unpublished). “A finding that default judgment is appropriate, however, is not the end of the inquiry”. See Martin v. Nat’l Check Recovery Servs., LLC, No. 12-cv-01230, 2016 WL 3670849, at *1 (M.D. Pa. July 11, 2016).

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Channel Partners Capital, LLC v. Shafer Equipment Co., Counsel Stack Legal Research, https://law.counselstack.com/opinion/channel-partners-capital-llc-v-shafer-equipment-co-pamd-2025.