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Branch Banking and Trust Co. v. Mansfield Barbecue, LLC

United States District Court, N.D. Texas, Dallas Division

October 31, 2019



          Sam A. Lindsay United States District Judge.

         Before the court is Plaintiff Branch Banking and Trust Company's (“Plaintiff” or “BB&T”) Motion for Entry of Default and Default Judgment (Doc. 6), filed March 18, 2019. After careful consideration of the Motion, record, and applicable law, the court grants in part and denies in part Plaintiff's Motion for Entry of Default and Default Judgment (Doc. 6).

         I. Background

         On January 18, 2019, BB&T filed its Original Complaint (Doc. 1) seeking relief against Defendants Mansfield Barbecue, LLC, Jeffery M. Bass, and Heather Bass (collectively, “Defendants”) for their breach of the promissory note and breach of guaranty. Defendants were served with process on January 24, 2019. Accordingly, their time to file an answer or otherwise respond to BB&T's Complaint was February 14, 2019. At the time of this opinion, Defendants have not filed an answer or otherwise appeared in this action. On March 18, 2019, BB&T filed its Motion for Entry of Default and Default Judgment. The clerk entered a default against Defendants the following day.

         II. Legal Standard - Motion for Default Judgment

         A party is entitled to entry of a default by the clerk of the court if the opposing party fails to plead or otherwise defend as required by law. Fed.R.Civ.P. 55(a). Under Rule 55(a), a default must be entered before the court may enter a default judgment. Id.; New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). The clerk of court has entered a default against Defendants, and BB&T now requests the court to enter a final default judgment against them.

         To date, Defendants have not responded to or otherwise defended against BB&T's Complaint. By failing to answer or otherwise respond to BB&T's Complaint, Defendants have admitted the well-pleaded allegations of the Complaint and are precluded from contesting the established facts on appeal. See Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). Stated differently, a “defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 496 (5th Cir. 2015) (citation omitted). Accordingly, a defendant may not contest the “sufficiency of the evidence” on appeal but “is entitled to contest the sufficiency of the complaint and its allegations to support the judgment.” Id. Additionally, a party “is not entitled to a default judgment as a matter of right, even whe[n] the [opposing party] is technically in default.” Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996). A district court “has the discretion to decline to enter a default judgment.” Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). In determining whether entry of a default judgment is warranted in a particular matter, the court may consider: “whether material issues of fact are at issue, whether there has been substantial prejudice, whether the grounds for default are clearly established, whether the default was caused by a good faith mistake or excusable neglect, the harshness of a default judgment, and whether the court would think itself obliged to set aside the default on the defendant's motion.” Id.

         III. Analysis

         In its Complaint, BB&T asserts that it and Mansfield Barbecue, LLC (“Borrower”) entered into a business loan, evidenced in part by a promissory note (“Note”) for a principal amount of $320, 000. Jeffery M. Bass and Heather Bass (“Guarantors”) executed guaranty agreements (“Guaranties”) in connection with the Note. The Note provides as follows:

The failure to pay any part of the principal or interest when due on this Note . . . shall be a material default hereunder and this Note and other debts due the bank by any one or more of undersigned shall immediately become due and payable at the option of the Bank without notice or demand of any kind, which is hereby waived.

Doc. 1-1, at 2. The Guaranties cover “all indebtedness, obligations[, ] and liability to [the] bank” undertaken on behalf of the Borrower. Doc. 1-2 & 1-3.

         BB&T contends that Borrower breached its duties under the Note by failing to make payments since August 2018. Accordingly, it asserts that Borrower's failure to make the required payments triggered the obligations of the Guarantors. On November 9, 2018, BB&T accelerated the debt under the Note, and in a December 12, 2018 letter sent to all defendants, it demanded payment. Despite the notice and demand, Defendants have failed to cure their defaults.

         BB&T's breach of promissory note and breach of guaranty claims are essentially breach of contract claims. To prevail on a breach of contract claim, BB&T must prove the following elements: “(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Certain Underwriters at Lloyd's of London v. Lowen Valley View, L.L.C., 892 F.3d 167, 170 (5th Cir. 2018) (internal quotations and citations omitted). The court determines that BB&T has sufficiently pleaded each of the elements of its claims. Additionally, as Defendants have failed to file an answer in this action or otherwise appear, they have accepted these well-pleaded allegations as true. Accordingly, the court concludes that Defendants have breached the Note and Guaranties. The court, therefore, grants BB&T's Motion as it relates to BB&T's request for default judgment against Defendants.

         IV. ...

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