Huntington National Bank v. County Recycling LLC

Background

Huntington National Bank, successor by merger to TCF National Bank, sued County Recycling LLC and Ted Fisher. County Recycling had purchased software and equipment on September 29, 2020, using a loan from TCF. Under an Installment Payment Agreement, County Recycling borrowed $190,838.35 and agreed to make monthly payments of $3,723.52 for 60 months.

The agreement allowed the Bank to charge late fees and 18% interest on unpaid amounts. It also allowed the Bank, after a default, to accelerate the unpaid loan balance and seek other remedies, including attorney fees and expenses. The loan was secured by a continuing guaranty from Fisher, who agreed to pay County Recycling’s obligations and the costs of enforcing the guaranty.

The Bank notified County Recycling and Fisher on May 3, 2022, that a payment due April 8, 2022, had not been made. Neither defendant paid after that notice. On May 18, 2022, the Bank sent a second notice accelerating the remaining loan balance and demanding $146,712.51, plus attorney fees and costs.

The Bank filed its Complaint on May 20, 2022. County Recycling and Fisher were served on May 24 and May 23, respectively. Neither defendant answered or otherwise responded, and the Clerk entered default against both defendants on July 15, 2022. Neither defendant responded to the motion for default judgment or appeared in the litigation.

Court’s Analysis

Under Federal Rule of Civil Procedure 55(b)(2), the court concluded that Huntington was entitled to default judgment because the defendants were properly served and failed to respond. The court treated the Complaint’s factual allegations as true, except those concerning damages.

The court found County Recycling liable for breach of contract. It determined that the Installment Agreement was a valid contract, that Huntington had performed the conditions required before demanding payment, and that County Recycling materially breached the agreement by failing to make timely payments.

The court also found Fisher liable for breach of contract based on the Guaranty. It determined that the Guaranty was a valid contract, that Huntington had performed the relevant conditions, and that Fisher breached his obligation to pay amounts due under the Guaranty.

The court accepted evidence from Huntington’s financial recovery representative concerning the damages calculation. The calculation included $22,341.12 for missed installments, $121,716.55 representing the present value of the remaining 36 unpaid installments, a $4,868.66 penalty, and $2,234.10 in late fees. The court found actual damages of $151,160.43 established with reasonable certainty.

The court also found that Huntington reasonably incurred $6,371.80 in attorney fees and costs, including $627.00 in filing and process-server expenses. It further concluded that Huntington was entitled to post-judgment interest under 28 U.S.C. § 1961(a), at the maximum rate allowed by that statute.

Disposition

Judge Katherine Menendez granted Huntington’s Motion for Default Judgment. The Clerk was directed to enter judgment in favor of Huntington against County Recycling LLC and Ted Fisher, jointly and severally, for $157,532.23, plus any applicable post-judgment interest allowed by law.