Huntington National Bank v. America Housing Solutions, LLC

Background

Huntington National Bank, successor by merger to TCF National Bank, sued America Housing Solutions, LLC, and Tanesha Sanders. Huntington alleged that TCF financed America Housing’s purchase of software and equipment under several agreements. America Housing agreed to make 60 monthly payments of $2,406.86 on a $123,351.77 loan. Sanders signed a continuing guaranty promising the full and prompt performance of America Housing’s payment and other obligations.

America Housing stopped making its monthly payments in February 2022. TCF sent notices of default on March 1 and March 16, 2022, and demanded payment of the outstanding amounts. The defendants did not respond to the lawsuit or otherwise appear. The Clerk entered their defaults.

Default judgment analysis

Huntington moved for default judgment on Counts I and II, which alleged breach of contract against America Housing and Sanders, respectively. The court explained that a default means the complaint’s factual allegations—other than allegations about the amount of damages—are treated as true. Legal conclusions are not automatically admitted, so the court considered whether the allegations stated valid breach-of-contract claims.

Minnesota law applied because the installment payment agreement and guaranty contained Minnesota choice-of-law provisions. The court found that Huntington adequately alleged contract formation, its performance of any required conditions, the defendants’ failure to make required payments, and damages. The court therefore found legitimate breach-of-contract claims against both defendants and concluded that their liability was established by the default.

The court separately required Huntington to prove its damages with reasonable certainty. It found that Huntington had done so and awarded, jointly and severally against the defendants:

- $14,441.16 for six unpaid monthly installments from February through July 2022; - $74,446.35 for the present value of 34 remaining installments; - $2,977.86 as a 4% penalty; - $1,203.45 in late fees; - $11,329.50 in attorneys’ fees and costs; and - post-judgment interest at the maximum rate allowed by law, beginning when judgment was entered and continuing until the judgment was satisfied, calculated under 28 U.S.C. § 1961.

The first four amounts total $93,068.82 in actual damages. The court also noted that the agreement allowed recovery of attorneys’ fees and expenses and that Huntington had provided documentation supporting the amount and reasonableness of its request.

Order

Judge Eric C. Tostrud granted Huntington’s motion for default judgment. The court entered a joint-and-several default judgment on Huntington’s breach-of-contract claims in Counts I and II of the Complaint and Amended Complaint. Under Federal Rule of Civil Procedure 41(a)(1)(i), Counts III, IV, V, and VI of the Amended Complaint were voluntarily dismissed. The order directed that judgment be entered for the listed damages, attorneys’ fees and costs, and post-judgment interest.