Greentree Hospitality Group Incorporated v. Mullinix

• Court: District Court, D. Arizona
• Decided: January 27, 2023
• Docket: 2:22-cv-00088
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Greentree Hospitality Group Incorporated, No. CV-22-00088-PHX-DJH

10 Plaintiff, ORDER

11 v.

12 Patrick Mullinix,

13 Defendant. 14 15 On February 24, 2022, the Clerk of Court entered Default against Defendant Patrick 16 Mullinix (“Defendant”) after he failed to appear or otherwise defend against Plaintiff 17 Greentree Hospitality Group Incorporated’s (“Plaintiff”) claim for breach of contract. 18 (Doc. 10); Fed. R. Civ. P. 55(a). On March 18, 2022, Plaintiff filed a Motion for Entry of 19 Default Judgment (Doc. 11). The Court considered the motion and found subject matter 20 jurisdiction over the action, personal jurisdiction over Defendant, and that the seven 21 relevant factors supported an entry of default judgment against Defendant. (See generally 22 Doc. 14 at 1–10). Nonetheless, the Court could not calculate Plaintiff’s total alleged 23 damages with certainty. The Court thus set a Damages Hearing for January 23, 2023, and 24 Plaintiff filed a Notice of Intent to Prove Damages by Affidavit (Doc. 15). Following the 25 hearing, the Court grants Plaintiff’s Motion for Entry of Default Judgment. 26 Defendant failed to fulfill various payments due under the December 31, 2020, 27 Promissory Note (“Note”) (Doc. 11-2) and Guaranty of Payment (“Guaranty”) (Doc. 11- 28 1 3) executed by the parties.1 Thus, the terms of the Note and Guaranty govern how 2 Plaintiff’s damages are calculated. The Note and Guaranty obligated Defendant to repay 3 a $150,000 loan (the “Loan”) issued to him by Plaintiff, with interest, by December 28, 4 2021. (Doc. 11-2 at 2). Plaintiff seeks a default judgment comprised of (1) the principal 5 due; (2) the interest payments due; (3) accrued default interest as of December 31, 2022; 6 (4) continuing interest from January 1, 2023, until judgment is entered; (5) interest on the 7 judgment; and (6) costs and attorneys’ fees. (Doc. 11-2 at 1–2) 8 I. Damages 9 As to unpaid principal, Defendant allegedly failed to make any payments on the 10 principal of the Loan (Doc. 1 at ¶ 16). And the Court so finds. Thus, Defendant is liable 11 to Plaintiff for $150,000.00 in unpaid principal. 12 As to unpaid interest, a court can award interest on a liquidated claim2 whether based 13 on contract or tort. See Alta Vista Plaza v. Insulation Specialists Co., 919 P.2d 176 (Ariz. 14 Ct. App. 1995) (“[p]rejudgment interest is awarded as matter of right on a liquidated claim, 15 whether based on contract or tort . . . .”) (citing Fleming v. Pima County, 685 P.2d 1301 16 (1984)). Relevant here, the Note sets forth two sources of interest: (1) interest-only 17 monthly payments and (2) default interest. 18 First, Sections 1 and 2 of the Note direct Defendant to pay “interest-only monthly 19 payments” of ten percent (10%) of the unpaid principal balance throughout the duration of 20 the Note. (Doc. 11-2 at 2). Defendant made ten interest-only monthly payments of 21 $1,250.00 to Plaintiff between February 1, 2021, and November 3, 2021. (Doc. 1 at ¶¶ 13– 22 14). However, Defendant has failed to make his last two interest-only monthly payments. 23 Thus, Defendant is liable to Plaintiff for $2,500 in unpaid interest-only monthly 24 payments. 25 1 The Court’s prior Order contained an extensive background information and the Court 26 will not repeat it here. (Doc. 14 at 1–3).

27 2 “A claim is liquidated if the evidence furnishes data which, if believed, makes it possible to compute the amount with exactness, without reliance upon opinion or 28 discretion.” Arizona Title Ins. & Trust Co. v. O’Malley Lumber Co., 484 P.2d 639, 649 (Ariz. Ct. App. 1971). 1 Second, Section 5 of the Note directs that upon Defendant’s default, his unpaid 2 principal and interest-only payments shall bear interest at nine percent (9%) per annum. 3 (Doc. 11-2 at 2–3). Defendant defaulted on the Note and Guaranty on December 29, 2021, 4 when he failed to deliver $150,000.00 in principal and $2,500.00 in interest only monthly 5 payments. (Doc. 1 at ¶¶ 13–14, 16). When applying the nine percent (9%) default interest 6 rate, Plaintiff represents that Defendant has accrued $13,864.80 in unpaid default interest 7 from December 29, 2021, to December 31, 2022. And the Court so finds. Thus, 8 Defendant is liable to Plaintiff for $13,864.80 in unpaid default interest as of 9 December 31, 2022. 10 II. Pre and Post Judgement Interest 11 Plaintiff proposes that pre-judgment interest should continue to accrue at a rate of 12 $37.54 per day from January 1, 2023, until judgment is entered. (See Doc. 15-2 at 2). At 13 the Damages Hearing, Plaintiff represented that this is in accordance with the nine percent 14 (9%) default interest rate set forth by the Note. (Doc. 11-2 at 2–3); see Ace Auto. Prods. v. 15 Van Duyne, 156 Ariz. 140, 750 P.2d 898 (Ariz. Ct. App. 1987) (applying the interest rate 16 agreed upon in a promissory note to calculate prejudgment interest). Thus, Defendant is 17 liable to Plaintiff for pre-judgment interest accruing at $37.54 per day as of January 18 1, 2023. 19 Plaintiff further proposes that after judgment is entered, “[i]nterest on the judgment 20 [should] continue to accrue at a rate of $37.60 per day pursuant to the parties’ agreement.” 21 (Doc. 15-2 at 2). However, the means in which the Court awards post-judgment interest is 22 limited by 28 U.S.C. § 1961(a). Thus, Defendant is liable to Plaintiff for post-judgment 23 interest accruing at the applicable federal rate under 28 U.S.C. § 1961(a). 24 III. Costs and Attorney’s Fees 25 Last, Plaintiff seeks an award of costs in the amount of $567.00 and attorney fees in 26 the amount of $6,248.00. (Doc. 11 at 8). Although Plaintiff requested attorneys’ fees and 27 costs in their Motion for Default Judgment and Notice of Intent to Prove Damages by 28 Affidavit, Rule 54 of the Federal Rules of Civil Procedure mandates a motion for attorneys’ || fees “be filed no later than 14 days after the entry of judgment[.]” Fed. R. Civ. P. 54(d)(2). 2|| Therefore, the Court will allow Plaintiff's Counsel to file a motion for attorneys’ fees. 3 In sum, the Court enters default judgment in Plaintiffs favor against Defendant. 4|| Defendant is liable to Plaintiff for the sum certain of $166,364.80° as of December 31, || 2022. Pre-judgment interest will accrue at a rate of $37.54 per day from January 1, 2023, || until the date judgment is entered. Post-judgment interest will accrue pursuant to 28 U.S.C. 7\| § 1961(a) from the date of entry of this judgment until the judgment is paid in full. 8 Accordingly, 9 IT IS HEREBY ORDERED that Plaintiff Greentree Hospitality Group Incorporated’s Motion for Entry of Default Judgment (Doc. 11) is GRANTED. The Clerk 11 || of Court shall enter default judgment against Defendant Patrick Mullinix in the amount of $166,364.80, accruing pre-judgment interest at the rate of $37.54 per day from January 1, 13 || 2023, until the date this judgment is entered, and accruing post-judgment interest at the 14|| applicable federal rate pursuant to 28 U.S.C. § 1961(a) from the date this judgment is 15 || entered until the judgment is paid in full. 16 IT IS FINALLY ORDERED that Plaintiff may file a motion for costs and 17 || attorneys’ fees within fourteen (14) days of the entry of this Order. 18 Dated this 26th day of January, 2023. 19 20 oC. . fe 21 norable' Diang4. Hurtetewa 02 United States District Fudge 23 24 25 26 27 □ > Defendant’s unpaid principal of $150,000.00, plus Defendant’s unpaid interest onl 28 monthly payments of. $2,500.00, plus Defendant’s unpaid default interest through December 31, 2022, of $13,864.80 equals $166,364.80. -4-