Huntington National Bank v. TNI Trucking LLC

Background

Huntington National Bank, identified as the successor by merger to TCF National Bank, alleged that TNI Trucking LLC entered into an Installment Payment Agreement to finance software and equipment. The agreement identified a financed amount of $165,811.61 and required monthly payments of $3,243.32 over 60 months. It also allowed the creditor to recover certain fees, costs, and expenses after exercising contractual remedies.

Ian K. Clarke signed a continuing guaranty in favor of the creditor. The guaranty made Clarke responsible for TNI’s obligations under the agreement and for costs, fees, and expenses connected with enforcing the guaranty and those obligations.

Huntington alleged that TNI defaulted by missing a payment due June 25, 2021. Huntington sent default notices to TNI and Clarke in August and September 2021 and notified them that it intended to accelerate the debt. Huntington filed this action asserting breach of contract and other claims. Both defendants were served, neither appeared, and the clerk entered default against each defendant.

Default judgment and contract claims

A default judgment requires an entry of default by the clerk followed by a court application for judgment. Default admits the complaint’s factual allegations, except allegations about the amount of damages, but it does not automatically establish legal conclusions. The court therefore considered whether the alleged facts stated valid contract claims.

Applying Minnesota law, the court explained that a breach-of-contract claim requires a contract, the plaintiff’s performance of conditions required before demanding performance, and the defendant’s breach. The court found that Huntington’s allegations adequately established a breach-of-contract claim against TNI. It also found that the allegations adequately established a breach-of-contract claim against Clarke based on the guaranty.

At the default-judgment hearing, Huntington indicated that it would not object to judgment only on its breach-of-contract claims and dismissal of its remaining claims. The court’s order therefore granted the motion as to Counts I and II and dismissed Counts III, IV, V, and VI without prejudice.

Damages

The court determined that Huntington proved $174,825.06 in damages to a reasonable degree of certainty. This amount consisted of:

- $35,676.52 for 11 overdue monthly payments; - $129,430.70 representing the present value of 45 future or accelerated payments, discounted at the agreement’s 6.49 percent implicit interest rate; - $6,471.54 for the agreement’s 5 percent default penalty; and - $3,246.30 in late fees.

The opinion notes an inconsistency in Huntington’s allegations and default notices about whether the missed monthly payment was $6,486.66 or $3,243.32. The court relied on the agreement’s stated monthly payment of $3,243.32 when calculating the overdue payments.

Attorneys’ fees and post-judgment interest

Huntington requested $16,185 in attorneys’ fees and expenses under the agreement. The court denied that request because Huntington did not submit billing records, identify the attorneys who worked on the case, provide their hourly rates or experience, or state the number of hours worked.

The court awarded post-judgment interest at the rate provided by 28 U.S.C. § 1961(a), beginning when judgment is entered. The clerk was directed to enter judgment against TNI Trucking LLC and Ian K. Clarke, jointly as stated in the order, for $174,825.06 plus that interest.