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Travelodge Hotels, Inc. v. Surajhira, LLC

United States District Court, D. New Jersey

February 27, 2019

TRAVELODGE HOTELS, INC., Plaintiff,
v.
SURAJHIRA, LLC, a South Carolina Limited Liability Company, and DARSHIL PATEL, an individual, Defendants.

          OPINION

          Kevin McNulty United States District Judge

         This matter comes before the Court on the unopposed motion of the plaintiff, Travelodge Hotels, Inc. ("Travelodge") for a default judgment against the defendants, Surajhira, LLC ("Surajhira"), and Darshil Patel ("Patel"), pursuant to Fed.R.Civ.P. 55(b)(2). (DE 8) This action arises from an alleged breach of a Franchise Agreement between Travelodge and Surajhira to operate a Travelodge facility, and a Guaranty Agreement between Travelodge and Patel. For the reasons set forth below, I will enter a default judgment in the amount requested.

         I. STANDARD FOR ENTRY OF DEFAULT JUDGMENT

         "[T]he entry of a default judgment is left primarily to the discretion of the district court" Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984) (citing Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951)). Because the entry of a default judgment prevents the resolution of claims on the merits, "this court does not favor entry of defaults and default judgments." United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984). Thus, before entering default judgment, the Court must determine whether the "unchallenged facts constitute a legitimate cause of action" so that default judgment would be permissible. DirecTV, Inc. v. Asher, 03-cv-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14, 2006) (citing Wright, Miller, Kane, 10A Federal Practice and Procedure: Civil 3d §2688, at 58-59, 63).

         "[D]efendants are deemed to have admitted the factual allegations of the Complaint by virtue of their default, except those factual allegations related to the amount of damages." Doe v. Simone, CIV.A. 12-5825, 2013 WL 3772532, at *2 (D.N.J. July 17, 2013). While "courts must accept the plaintiffs well-pleaded factual allegations as true," they "need not accept the plaintiffs factual allegations regarding damages as true." Id. (citing Chanel, Inc. v. Gordashevsky, 558 F.Supp.2d 532, 536 (D.N.J. 2008)). Moreover, if a court finds evidentiary support to be lacking, it may order or permit a plaintiff seeking default judgment to provide additional evidence in support of the allegations. Doe, 2013 WL 3772532, at *2.

         Before a court may enter default judgment against a defendant, the plaintiff must have properly served the summons and complaint, and the defendant must have failed to file an answer or otherwise respond to the complaint within the time provided by the Federal Rules, which is twenty-one days. See Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 18-19 (3d Cir. 1985); Fed.R.Civ.P. 12(a).

         After the prerequisites have been satisfied, a court must evaluate the following three factors: "(1) whether the party subject to default has a meritorious defense, (2) the prejudice suffered by the party seeking default, and (3) the culpability of the party subject to default." Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008) (citing Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)).

         II. DISCUSSION

         a. Adequate Service & Defendants' Failure to Respond The prerequisites for default judgment have been met.

         Srajhira and Patel were properly served. (DE 5, 6) Surajhira was served on July 2, 2018, by in-person delivery to its registered agent. Patel was served on July 9, 2018, at an address in Hardeeville, SC, by personal delivery to Parvin Patel, who agreed to accept service on his behalf. See Fed.R.Civ.P. 4(e), 4(h)(1); N.J. Ct. R. 4:4-4(a).[1] See also Affidavit of Brian P. Couch, Esq. (DE 8-1).

         Each failed to file an answer or otherwise respond to the Complaint within twenty-one days pursuant to Fed.R.Civ.P. 12(a).

         The clerk entered defaults on October 11, 2018 (clerk's entry following DE 7). Travelodge served a copy of the default on the defendants by mail. (DE 8-1 at 5)

         Accordingly, I am satisfied that the prerequisites to filing a default judgment are met. See Gold Kist, Inc., 756 F.2d at 18-19.

         b. ...


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