NELI International Incorporated v. Premier Restaurant Group, LLC
- Andrew Carter
- 1:23-cv-02725
- U.S. District Court · Southern District of New York
- 5
NELI International v. Premier Restaurant Group: Judge Carter granted default judgment on liability after defendants failed to respond to NELI’s contract lawsuit.
NELI obtained a default judgment establishing liability against Premier Restaurant Group, LLC, Forever Brands Operating Company, LLC, Cheeburger Operating Company, LLC, and Cheeburger VA, LLC. The order did not determine damages. The opinion discusses Anthony Wedo as a defendant but does not expressly state in its liability discussion that judgment was entered against him.
What happened
NELI International Incorporated v. Premier Restaurant Group, LLC concerns a $5 million loan that NELI said Premier failed to repay. NELI sued Premier, Forever Brands Operating Company, Cheeburger Operating Company, Cheeburger VA, and Anthony Wedo, alleging breaches of the loan agreement and related guarantees.
The defendants did not answer the complaint or otherwise respond. After the Clerk entered defaults, NELI requested default judgment. The court explained that a default accepts well-supported allegations about liability, but it does not automatically establish the amount of damages. The court found that Premier, Forever Brands, Cheeburger, and Cheeburger VA breached their loan obligations and had defaulted.
Judge Andrew L. Carter, Jr. granted NELI’s motion for default judgment as to liability. The order did not determine damages.
The detailed version
- NELI International Incorporated v. Premier Restaurant Group, LLC · No. 1:23-cv-02725
- Andrew Carter
- Nov. 9, 2023
Background
NELI International Incorporated sued Premier Restaurant Group, LLC; Forever Brands Operating Company, LLC; Cheeburger Operating Company, LLC; Cheeburger VA, LLC; and Anthony Wedo in a breach-of-contract action. The opinion describes NELI as a Canadian loan provider and financial firm. NELI alleged that it lent Premier $5 million under a senior secured term loan to finance Premier’s fast-food franchise businesses.
The non-Premier limited liability companies allegedly gave written guarantees of Premier’s obligations. Premier allegedly granted NELI security interests in all of its assets, and Wedo allegedly provided limited guarantees and promises. NELI alleged that Premier breached the loan agreement by failing to pay a loan balance of more than $4 million.
Procedural history
NELI filed the action on March 31, 2023, and served the defendants on April 4,
- The defendants’ answers were due April 24,
- The court appointed a receiver on May 12,
- In September 2023, the Clerk entered certificates of default after the defendants failed to answer or otherwise respond.
NELI moved for default judgment on October 10, 2023. The court then ordered the defendants to explain in writing why default judgment should not be entered. The order warned that failing to respond could result in default judgment. NELI filed an affidavit stating that the defendants had been served with the order and supporting papers, but the defendants did not respond.
Legal standard
Under Rule 55 of the Federal Rules of Civil Procedure, default judgment involves two steps: the Clerk first enters a certificate of default, and the court may then enter judgment on the plaintiff’s motion. A defendant’s failure to answer admits well-pleaded allegations about liability, but the court must still determine whether those allegations establish legal liability. Default does not admit the amount of damages; a plaintiff seeking damages must provide evidence establishing them with reasonable certainty.
Court’s ruling
Because of the defendants’ default, the court accepted as true NELI’s well-pleaded allegations concerning liability, but not allegations concerning damages. The court concluded that Premier, Forever Brands, Cheeburger, and Cheeburger VA breached and defaulted on their loan obligations, corresponding to Claims One through Four of the complaint. The court also noted that those defendants had granted NELI security interests in their present and after-acquired property.
The court granted NELI’s motion for default judgment as to liability. The opinion does not state that the court determined the amount of damages.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.