Farnam Street Financial Inc v. Nabati Foods, Inc
- Katherine Menendez
- 0:23-cv-00254
- U.S. District Court · District of Minnesota
- 8
In Farnam Street Financial v. Nabati Foods, Judge Menendez granted default judgment for $852,850.19 plus attorneys’ fees after Nabati failed to respond.
Farnam Street Financial, Inc. received default judgment for $852,850.19, with attorneys’ fees still to be determined. Nabati Foods, Inc. is subject to the judgment and was given an opportunity to respond to Farnam’s fee request.
What happened
Farnam Street Financial, Inc. sued Nabati Foods, Inc. for allegedly breaching an equipment lease. Nabati was served with the lawsuit but did not answer or otherwise participate, so the clerk entered default against it.
The court granted Farnam’s motion for default judgment and found that the uncontested allegations established Nabati’s liability for breach of contract. It ordered that judgment would be entered for $852,850.19 in damages, plus attorneys’ fees, while leaving the amount of those fees to be determined later.
Judge Menendez gave Farnam 21 days to submit its fee request and supporting documents, and gave Nabati 14 days afterward to respond. The court said it would issue a final order after resolving the fee request.
The detailed version
- Farnam Street Financial Inc v. Nabati Foods, Inc · No. 0:23-cv-00254
- Katherine Menendez
- Dec. 5, 2023
Background
Farnam Street Financial, Inc. and Nabati Foods, Inc. entered into an equipment lease agreement in October 2021. Under a related lease schedule, Nabati committed to leasing $608,000 worth of Farnam’s equipment for an initial 18-month term. That term would not begin until Nabati took enough equipment to meet the commitment. Nabati accepted and installed $541,667.24 worth of equipment, so the schedule did not commence. Farnam alleged that Nabati then failed to pay amounts due under the lease.
Farnam filed this breach-of-contract lawsuit on February 1, 2023. Nabati was served on March 8, 2023, but did not file an answer or otherwise respond. The clerk entered default against Nabati on July 11, 2023. The court noted that service was made on Jessica Li, whom the record identified as authorized to accept service for Nabati.
Default Judgment
A default judgment is a judgment entered when a defendant does not respond to a lawsuit. The court explained that default establishes the well-pleaded factual allegations, but not the amount of damages or legal conclusions. The court therefore considered whether Farnam’s allegations established a valid breach-of-contract claim under Minnesota law.
The court found that the uncontested facts showed that the parties formed a lease agreement, Farnam performed the conditions necessary to seek payment, and Nabati breached the agreement by failing to pay amounts due. The court granted Farnam’s motion for default judgment.
Damages and Attorneys’ Fees
Farnam sought $852,850.19 in damages, consisting of $343,858.08 in past-due rent, $34,036.01 in late fees, and $541,667.24 for the equipment’s casualty-loss value, reduced by $66,711.14 because of an equipment sale. The court found that this amount was supported by the record and granted default judgment for $852,850.19 in damages arising from Nabati’s breach of the lease agreement and related schedule.
The lease also allowed Farnam to seek attorneys’ fees and other litigation expenses connected with enforcing its rights. The court did not set the fee amount in this order. Instead, it gave Farnam until December 27, 2023, to submit a fee request with supporting documentation and gave Nabati until January 10, 2024, to respond. The court stated that it would issue a final order and enter judgment after resolving the fee issue.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.