Firestone Financial, LLC v. Summertime Amusements, LLC
This text of Firestone Financial, LLC v. Summertime Amusements, LLC (Firestone Financial, LLC v. Summertime Amusements, LLC) is published on Counsel Stack Legal Research, covering District Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
FIRESTONE FINANCIAL, LLC, ) ) Plaintiff, ) ) CIVIL ACTION NO. v. ) 2:23cv48-MHT ) (WO) SUMMERTIME AMUSEMENTS, ) LLC, RONALD MORGAN YATES, ) and ROWENA MULRANEY YATES, ) ) Defendants. )
OPINION Plaintiff Firestone Financial, LLC filed this action for breach of contract, breach of guaranty, replevin, and turnover of collateral against defendants Summertime Amusements, LLC, Ronald Morgan Yates, and Rowena Mulraney Yates. Jurisdiction is proper under 28 U.S.C. § 1332 (diversity). The clerk of court previously entered default against all defendants at the request of Firestone. This cause is now before the court on Firestone’s motion for entry of default judgment, which seeks damages for breach of contract in 1 the amount of $ 160,874.10 (plus post-judgment interest), attorneys’ fees in the amount of $ 6,329.00,
costs in the amount of $ 837.45, and the collateral in which Firestone has an enforceable security interest.
I. DEFAULT JUDGMENT STANDARD
Default alone does not warrant entry of a default judgment. See Tyco Fire & Sec. LLC v. Alcocer, 218 F. App’x 860, 863 (11th Cir. 2007)). “[A] default is not ‘an absolute confession by the defendant of his
liability and of the plaintiff’s right to recover,’ but is instead merely ‘an admission of the facts cited in the Complaint, which by themselves may or may not be
sufficient to establish a defendant’s liability.’” Capitol Recs. v. Carmichael, 508 F. Supp. 2d 1079, 1083 (S.D. Ala. 2007) (Steele, J.) (citations omitted). However, “[t]he defendant is not held to admit facts
that are not well-pleaded or to admit conclusions of
2 law.” Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (emphasis omitted).1
A default judgment, including the specific nature and extent of the relief sought, must be adequately supported in the record. See 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....”). Besides the pleadings, a court may consider affidavits and declarations. See Antoine v. Atlas Turner, Inc., 66
F.3d 105, 111 (6th Cir. 1995) (“Use of affidavits in granting default judgments does not violate ... due process[.]”).
1. In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit Court of Appeals adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981.
3 II. FACTUAL BACKGROUND Based on the well pleaded factual allegations of
the complaint and the declarations submitted by Steven Principi, C. Randall Woolley, and E.B. Harrison Willis in support of the motion for default judgment, the court finds the following facts.
On March 3, 2015, Firestone, as lender, and Summertime, as borrower, entered into a Master Security Agreement that gave Firestone a first-priority security interest in Summertime’s collateral, including all of
its equipment. The Yateses executed a Master Unlimited Guaranty in which they guaranteed the payment and performance of all liabilities and agreements of
Summertime. Summertime subsequently executed three promissory notes in favor of Firestone, which the Yateses also fully guaranteed. Contemporaneously with the execution
of the promissory notes, Summertime also entered into three commercial security agreements and three
4 corresponding business loan agreements. Summertime defaulted on these loans.
The unpaid accelerated balance on the first loan is $ 7,933.39. Including fees and prejudgment interest, Summertime owes $ 8,548.96 on the first loan. The unpaid accelerated balance on the second loan is
$ 3,684.82. Including fees and prejudgment interest, Summertime owes $ 4,159.97 on the second loan. The unpaid accelerated balance on the third loan is $ 140,566.06. Including fees and prejudgment interest,
Summertime owes $ 148,165.17 on the third loan. The total amount owed on the loans is $ 160,874.10. Firestone filed the complaint in this case against
the defendants on January 20, 2023, seeking to recover the full amount due under the loans and to enforce its security interest in Summertime’s collateral. Six days later, Firestone served all defendants with a summons
and copy of the complaint. See Affidavits of Service
5 (Doc. 6 and Doc. 6-1). All defendants failed to answer the complaint.
On March 1, 2023, Firestone filed for default judgment. This court denied the motion, as Firestone had not yet applied for entry of default by the clerk of court pursuant to Federal Rule of Civil Procedure
55(a). See Order (Doc. 10). Firestone has since applied for an entry of default, which the court of clerk entered against all defendants. See Clerk’s Entry of Default (Doc. 12). Firestone now moves once
again for default judgment. At no point during the proceedings to date has the court heard from the defendants.
III. DISCUSSION As an initial matter, the court finds that a hearing is not required on Firestone’s motion for
default judgment. While “[t]he court may conduct hearings ... when, to enter or effectuate judgment, it
6 needs to: ... determine the amount of damages,” Fed. R. Civ. P. 55(b)(2), “Rule 55 does not require that
testimony be presented as a prerequisite to the entry of a default judgment....” 10A Fed. Prac. & Proc. Civ. § 2688 (4th ed. (April 2023)). As the outstanding balance Firestone now seeks is clearly supported in the
record and does not require expert evidence or complex calculations, there is no need for a hearing here. Rule 55(b)(2) also states that a “party or its representative must be served with written notice of
the application at least 7 days before the hearing.” Firestone’s motion for default judgment and the clerk’s entry of default were mailed to defendants at their
last known address over four months ago. See Fed. R. Civ. P. 5(b)(2)(C) (permitting service by “mailing it to the person’s last known address--in which event service is complete upon mailing”). Defendants have
received sufficient notice under Rule 55(b)(2).
7 Firestone has shown its entitlement to breach-of-contract damages in the amount of
$ 160,874.10 (plus post-judgment interest), attorneys’ fees in the amount of $ 6,329.00, costs in the amount of $ 837.45, and the turnover of the collateral used to secure the loans. The breach-of-contract damages
include late fees, nonsufficient funds fees, and prejudgment interest as required by the contracts. In addition, the contracts provide for the recovery of attorneys’ fees and costs, and the declarations
submitted by Firestone’s two attorneys corroborate the amounts Firestone now seeks. After review of counsels’ declarations, and, in the absence of any objection from
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