United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE.
before the Court is Defendants’ Motion to Set Aside
Clerk’s Entry of Default and for Leave to File Answer
to Complaint (Dkt. #25; Dkt. #26).
reviewing the record, the Court finds that Defendants’
Motion to Set Aside Clerk’s Entry of Default and for
Leave to File Answer to Complaint (Dkt. #25; Dkt. #26) should
be GRANTED. Accordingly, Plaintiff’s
Motions for Default Judgment as to each Defendant (Dkt. #19;
Dkt. #20; Dkt. #21; Dkt. #22) and its Motion for Oral Hearing
(Dkt. #32) are DENIED as moot and the
Clerk’s entry of default as to each Defendant (Dkt.
#15; Dkt. #16; Dkt. #17; Dkt. #18) is
Nations Fund I, LLC (“Plaintiff”) leased
equipment to Defendant Enercorp Crane & Energy Services,
LLC (“Enercorp”) under a Master Lease Agreement
(“the Agreement”) on February 6, 2015. Under the
Agreement, Defendant Triple 7 Industries (“Triple
7”) is a co-lessee. That same day, Defendant Enercorp
Services LLC (“Enercorp Services”) and Defendant
Zachry Weir executed lease guaranty agreements with
Plaintiff, in which they agreed to act as corporate and
personal guarantor, respectively, in favor of Plaintiff. Also
that same day, Enercorp and Triple 7 entered into equipment
schedules pursuant to the Agreement.
allegedly has not received payments on the leased equipment
from Enercorp and Triple 7 since October 17, 2018. As a
result, on October 31, 2018, Plaintiff sent a Notice of
Default and Demand Letter to Enercorp and Triple 7, advising
them that they were in default, terminating their right to
possess the leased equipment, and demanding that they remit
the entire default balance and return the equipment to
November 9, 2018, Plaintiff filed a lawsuit against Enercorp,
Triple 7, Enercorp Services, and Zachry Weir (collectively,
“Defendants”) in Connecticut state court. In
response, Enercorp claims it began negotiating with Plaintiff
regarding the Agreement and alleged delinquencies under the
Agreement as claimed by Plaintiff in the Connecticut lawsuit.
Enercorp allegedly agreed with Plaintiff, on behalf of
Defendants, to release the leased equipment to Plaintiff for
sale at an auction. On December 12, 2018, pursuant to that
agreement, an auctioneer sold the majority of the leased
equipment and the proceeds went to Plaintiff. Enercorp and
Triple 7 retained the remaining equipment. At that time, it
was at least Enercorp’s understanding that the release
and sale of the leased equipment would operate as full and
final payment under the Agreement and terminate the
Agreement. Plaintiff disagrees. It claims that there was a
difference between the equipment’s book value and the
amount it received in proceeds from the auction. And
Plaintiff further claims that, though Defendants agreed to
remit a payment toward that difference, it did not agree that
that payment would operate as full and final payment of
Defendants’ obligations under the Agreement. On
February 3, 2019, three days before this action was filed,
Plaintiffs sent Enercorp and Triple 7 a second Notice of
Default and Demand Letter terminating their right to possess
the equipment retained after the auction and demanding its
asserts claims against Defendants for breach of contract.
Plaintiff claims that Enercorp and Triple 7 breached the
terms of the Agreement and defaulted when they stopped making
payments on the leased equipment on October 17, 2018.
Moreover, Plaintiff claims that Enercorp Services and Zachry
Weir materially breached their respective guarantee
agreements by failing to cure Enercorp and Triple 7’s
default. Plaintiff requests, among other things, contract
damages of not less than $1, 977, 577.91-the $1, 112, 941.57
in sale proceeds from the auction, plus rent fees, late fees,
and any deficiency amounts from the equipment’s sale.
In addition, Plaintiff files an application for writ of
sequestration, claiming that it is entitled to possession of
the equipment retained by Enercorp and Triple 7 after the
December 12, 2018 auction.
February 6, 2019, Plaintiff filed a complaint and application
for writ of sequestration against Defendants (Dkt. #1).
Summons returned executed by each Defendant, indicating that
service of process was made on each on February 13, 2019
(Dkt. #6; Dkt. #7; Dkt. #8; Dkt. #9).
did not appear or otherwise indicate an intent to participate
in the litigation by their March 6, 2019 deadline to answer.
On March 7, 2019, Plaintiff moved for Clerk’s entry of
default judgment against each Defendant (Dkt. #11; Dkt. #12;
Dkt. #13; Dkt. #14). On March 8, 2019, the Clerk entered
default against each Defendant (Dkt. #15; Dkt. #16; Dkt. #17;
Dkt. #18). On March 20, 2019, Plaintiff moved for default
judgment against each Defendant (Dkt. #19; Dkt. #20; Dkt.
#21; Dkt. #22).
March 26, 2019, Defendants filed a notice of attorney
appearance (Dkt. #23). On April 12, 2019, Defendants moved to
set aside Clerk’s entry of default and for leave to
answer Plaintiff’s complaint ((Dkt. #25; Dkt. #26).
That same day, Defendants filed an answer (Dkt. #27).
April 25, 2019, Plaintiff filed a response to
Defendants’ motion to set aside Clerk’s entry of
default (Dkt. #28). On May 3, 2019, Defendants filed a reply
(Dkt. #31). On August 15, 2019, Plaintiff moved for an oral