Huntington National Bank v. Infinite Education Services, Inc.

Background

Huntington National Bank, identified as the successor by merger to TCF National Bank, asked the court for a default judgment against Infinite Education Services, Inc. and Charles Hill. A default judgment is a judgment entered after a defendant fails to respond or otherwise participate in the case.

The complaint alleged that Infinite Education purchased software and equipment from Bright Vanguard LLC and used financing provided by TCF. Infinite Education and Hill executed several agreements, including an installment payment agreement, a payment and acceptance confirmation, a continuing guaranty, and an authorization for automatic electronic payment. The installment agreement provided for a loan of $287,402.24 and monthly payments of $5,621.67 over 60 months. Hill guaranteed Infinite Education’s obligations.

Infinite Education stopped making monthly payments in December 2021. TCF sent notices of default on January 7 and January 26, 2022, and demanded payment of the outstanding amounts. The defendants did not respond to the lawsuit, did not appear, and did not respond to the default-judgment motion. The clerk entered their default.

Court’s Analysis

The court explained that, after default, the complaint’s factual allegations are treated as true except allegations about the amount of damages. Legal conclusions are not automatically admitted. The court therefore considered whether the allegations established valid breach-of-contract claims and whether Huntington proved the amount of its damages with reasonable certainty.

The court found legitimate breach-of-contract causes of action against Infinite Education and Hill. Minnesota law applied because the installment agreement and guaranty contained Minnesota choice-of-law provisions. The court determined that Huntington had adequately alleged the formation of the contracts, its performance of any required conditions, the defendants’ failure to make required payments, and damages. The motion for default judgment focused on the breach-of-contract claims against Infinite Education and Hill.

The court found that Huntington had shown actual damages of $257,940.36 with reasonable certainty. The installment agreement allowed recovery after default of unpaid amounts, the present value of remaining installments, a 4% penalty under the specified circumstances, late fees, and other charges. The court also found that Huntington had established its entitlement to, and the reasonableness of, $6,788.95 in attorneys’ fees and costs. Federal law governed post-judgment interest, which would accrue on the total award, including fees and costs, from the date judgment was entered until payment.

Order

Judge Eric C. Tostrud granted Huntington’s motion for default judgment. He ordered Infinite Education and Hill to pay Huntington jointly and severally:

- $33,730.02 for six unpaid monthly installments from December 2021 through May 2022; - $211,771.29 representing the present value of 42 remaining installments; - $8,470.86 as a 4% penalty; - $3,938.19 in late fees; - $30.00 for a returned automated-clearing-house payment; - $6,788.95 in attorneys’ fees and costs; and - post-judgment interest at the maximum rate allowed by law, calculated under 28 U.S.C. § 1961(b), from the date judgment was entered until the judgment was satisfied.

The listed damages total $257,940.36, excluding attorneys’ fees, costs, and post-judgment interest.