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Nations Fund I, LLC v. Enercorp Crane & Energy Services, LLC

United States District Court, E.D. Texas, Sherman Division

October 1, 2019

NATIONS FUND, I, LLC, Plaintiff,
v.
ENERCORP CRANE & ENERGY SERVICES, LLC, TRIPLE 7 INDUSTRIES, LLC, ENERCORP SERVICES LLC, AND ZACHRY WEIR, Defendants

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT, UNITED STATES DISTRICT JUDGE.

         Pending 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).

         After 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 VACATED.

         BACKGROUND

         I. Factual Summary

         Plaintiff 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.

         Plaintiff 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 Plaintiff.

         On 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 return.

         Plaintiff 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.

         II. Procedural History

         On 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).

         Defendants 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).

         On 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).

         On 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 ...


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