Gmac Commercial Mortg. v. Maitland Hotel Assoc.
| Decision Date | 15 May 2002 |
| Docket Number | No. 6:01-CV-542-ORL-31JG.,6:01-CV-542-ORL-31JG. |
| Citation | 218 F.Supp.2d 1355 |
| Parties | GMAC COMMERCIAL MORTGAGE CORPORATION, Plaintiff, v. MAITLAND HOTEL ASSOCIATES, Limited, Thomas E. McIntyre and Larry Walker, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Craig E. Bertschi, Burleigh L. Singleton, Kilpatrick Stockton, L.L.P., Atlanta, GA, David R. Tyrrell, Patrick J. Risch, Hill, Ward & Henderson, P.A., Tampa, FL, for Plaintiff.
On April 3, 2002, Magistrate Judge Glazebrook rendered a Report and Recommendation (Doc. 23), recommending that Plaintiff's Motion for Default Judgment (Doc. 17) be granted. No objections to that report have been filed. Accordingly, it is
ORDERED that Judgment be entered on behalf of Plaintiff, GMAC Commercial Mortgage Corp. and against Defendants, Maitland Hotel Associates, Limited, Thomas E. McIntyre and Larry Walker, jointly and severally, in total amount of $946,960.25, with post-judgment interest accruing hereafter as provided by law.
This cause came on for an evidentiary hearing on January 15, 2002 on the following motion:
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MOTION: PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST MAITLAND
HOTEL ASSOCIATION, THOMAS E. MCINTYRE, AND LARRY
WALKER (Doc. No. 17)
FILED: December 19, 2001
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THEREON it is RECOMMENDED that the motion be GRANTED
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I. BACKGROUND
Plaintiff GMAC Commercial Mortgage Corporation ["GMAC"] is a California corporation with its principal place of business in Horsham, Pennsylvania. GMAC is engaged in the business of providing commercial lease financing to businesses. Defendant Maitland Hotel Associates, Ltd., ("Maitland") is a limited partnership organized under the laws of Florida with its place of businesses in Orlando, Florida. The general partner of Maitland is Aantseme Partners, Inc., which is a Florida corporation. Byrd F. Marshall is the registered agent for Maitland. Defendant Thomas E. McIntyre ("McIntyre"), a citizen of Florida, is the Executive Vice President of Aantseme Partners. Defendant Larry Walker ("Walker") is also a citizen of Florida.
On behalf of Maitland's general partner, Aantseme Partners, McIntyre signed and executed a Master Equipment Lease (the "Lease") with GMAC on January 5, 2000. See Lease at Docket No. 1, Ex. A. The Lease is governed by the laws of the State of Georgia. See Lease at ¶ 27(h). According to the Lease, GMAC provided $1.2 million in lease financing to Maitland for furniture, fixtures, and equipment. The furniture, fixtures, and equipment constituted the collateral for the Lease. Maitland agreed to make 48 consecutive monthly rental payments in an amount "based upon the aggregate cost of the equipment and the [interest] rate based on corresponding 4-year Treasury on the date of the final disbursement under the lease agreement plus 550 basis points." Lease at ¶ 5(a). At closing, it was determined that Maitland's monthly rental payment would be $34,465.20.
The Lease provides that failure to make a monthly rental payment on the first of each month or within 30 days thereafter is an event of default. Lease at ¶ 18. On March 1, 2000, Maitland made the first of its monthly rent payments. Paragraph 19(a)(ii) of the Lease provides that, in the event of default, GMAC has the right to declare all of Maitland's debt immediately due and payable. Paragraph 19(a)(v) of the Lease provides that, in the event of default, GMAC has the right "to enter upon the premises where the [collateral] is located and take immediate possession of and remove the same by summary proceedings or otherwise."1
The Lease also provides that, in the event of default for failure to make timely payments, Maitland is obligated to pay a late fee of 5% of each delinquent payment. Lease at ¶ 20(a). The Lease further provides that, in the event of such default, Maitland is obligated to pay interest from the date of default at a rate of "1.5% per month (or the maximum amount permitted by law to be collected if such role exceeds the maximum legal rate)." Lease at ¶ 20(b). In addition, the Lease provides that Maitland is obligated to pay all costs, including reasonable attorney's fees, incurred in enforcing the terms of the lease or in collecting payments under the Lease. Lease at ¶ 19(b).
On August 4, 1999, McIntyre and Walker executed a Guaranty Agreement ("Guaranty") in connection with the Lease. See Guaranty at Docket No. 1, Ex. B. Pursuant to the Guaranty, McIntyre and Walker each "absolutely and unconditionally guarantee[d] the prompt payment and satisfaction" of Maitland's financial obligations under the Lease. The Guaranty provides that McIntyre and Walker each "shall be liable to [GMAC] for . . . all costs (including without limitation reasonable fees and expenses of legal counsel, whether retained firms or in-house incurred by [GMAC]) in enforcing performance of or collecting any payments due under the Guaranty." Guaranty at ¶ 9.
As of November 8, 2000, Maitland's account with GMAC had a past due balance in the amount of $74,100.18, plus interest, late fees, and attorney's fees. On November 16, 2000, GMAC's counsel sent, by letter, a demand for immediate payment of the past due balance, and notified McIntyre and Walker of the past due account. See November 16, 2000 Letter, Docket No. 1, Ex. C. As of April 27, 2001, Maitland's account with GMAC had a past due balance in the amount of $103,395.60, plus interest, late fees, and attorney's fees. See Docket No. 22, Ex. 2 at ¶ 10. Similarly, as of April 27, 2001, the obligations of McIntyre and Walker pursuant to the Guaranty were $103,395.60, plus interest, late fees, and attorney's fees. See Docket No. 22, Ex. 2 at ¶ 10. Claiming a default on the rent obligations, GMAC accelerated the total balance due under the Lease and Guaranty. According to the complaint, the total balance due under the Lease is $1,240,747.20. See Docket No. 1 at ¶ 32
On May 2, 2001, GMAC brought the present action to recover its damages from defendants. Docket No. 1. On May 24, 2001, GMAC effected personal service upon both McIntyre and Walker. Docket Nos. 13 and 14. On May 25, 2001, GMAC effected personal service upon Maitland by service on registered agent Byrd F. Marshall. On September 24, 2001, GMAC moved for an entry of default against defendants. Docket No. 10. On the same day, the Clerk entered a default. Docket No. 15. On November 19, 2001, GMAC moved for entry of default judgment. Docket No. 17. On December 13, 2001, the Court scheduled an evidentiary hearing on GMAC's motion for default judgment against Maitland, McIntyre, and Walker for January 15, 2002. On January 10, 2002, GMAC filed a second, and duplicative, motion for default judgment against Maitland, McIntyre, and Walker with supporting affidavit.
On January 15, 2002, the Court held an evidentiary hearing on GMAC's December 13, 2001 motion for default judgment. Maitland, McIntyre, and Walker failed to appear at the hearing. At the hearing, the Court denied GMAC's January 10, 2002 motion for default judgment [Docket No. 20] as duplicative of the earlier-filed December 13, 2001 motion that had been noticed for hearing on January 15, 2002. At the hearing, the Court considered all of the evidence introduced by GMAC, including the supporting affidavits attached to the January 10, 2002 motion at Docket No. 20.
II. THE LAW
When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by the civil rules, and that fact is made to appear by affidavit or otherwise, the Clerk enters a default. Fed.R.Civ.P. 55(a). Rule 55(b)(2) further provides:
In all other cases the party entitled to a judgment by default shall apply to the court therefor; but no judgment by default shall be entered against an infant or incompetent person unless represented in the action by a general guardian, committee, conservator, or other such representative who has appeared therein. If the party against whom judgment by default is sought has appeared in the action, the party (or, if appearing by representative, the party's representative) shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application. If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper and shall accord a right of trial by jury to the parties when and as required by any statute of the United States.
The mere entry of a default by the Clerk does not in itself warrant the entry of a default judgment by the Court. Rather, the Court must find that there is a sufficient basis in the pleadings for the judgment to be entered. Nishimatsu Construction v. Houston National Bank, 515 F.2d 1200, 1206 (5th Cir.1975). A default judgment cannot stand on a complaint that fails to state a claim. Chudasama v. Mazda Motor Corporation, 123 F.3d 1353, 1370 n. 41 (11th Cir.1997), citing Nishimatsu, 515 F.2d at 1206. A default judgment has the effect of establishing as fact the plaintiff's well-pleaded allegations of fact, and bars the defendant from contesting those facts on appeal. Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987), citing Nishimatsu, 515 F.2d at 1206.
Under Georgia law, the applicable law in this diversity case, contract provisions authorizing the recovery of attorney's fees by a prevailing party are...
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