Guarantor liable for $160K judgment

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Where a trash collection company failed to make required payments under an equipment financing agreement, and its guarantor failed to respond to the lender’s lawsuit alleging breach of contract, judgment was entered for a total of $156,987.72, plus attorney’s fees.

Background

This is a breach-of-contract debt collection case. Regions Bank filed its complaint on April 4, 2023, against Robert M. Frazier. Regions served Frazier by summons on April 11, 2023. Frazier has not answered Regions’ complaint or otherwise participated in this case. Accordingly, upon Regions’ motion, the clerk entered default against Frazier on May 11, 2023. Regions has now moved for default judgment and filed a supplemental brief as to attorneys’ fees and costs.

Liability

The equipment finance agreement, or EFA, expressly states that it “shall be governed and construed under the laws of the State of California without reference to its principles of conflict of laws.” And in California, “the elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.”

The complaint alleges that Haulin’ Trash did not make the scheduled monthly payments in or about December 2022, nor subsequent payments thereafter, under the EFA. Thus, because Haulin’ Trash breached the contract by “fail[ing] to pay” an amount due under the EFA when due, Ascentium acted within its contractual rights in “declar[ing] all sums due and to become due hereunder immediately due and payable.”

And because Frazier guaranteed to Ascentium “the payment and performance when due of all of the obligations of the Debtor under this EFA” and permitted it to “proceed against [him] before proceeding against the Debtor, the Collateral or enforce any other remedy,” Ascentium (and now Regions) likewise acted within its contractual rights in bringing this action against Frazier following the alleged default. In sum, Regions’ complaint sufficiently alleges Frazier’s liability on the merits.

Damages

Regions provided several authenticated documents indicating the extent of Frazier’s debt: the EFA itself, vendor invoices, a UCC Financing Statement filed on June 3, 2022, and a payment history. Collectively, the attached documents demonstrate $8,438.91 in past due payments, $866.90 in late charges, $230.00 in site inspection charges and $136,847.71 in future accelerated payments (three percent present value discount), for a total of $146,383.52 due and owing as of March 13, 2023. Adding default interest at the rate of $71.65 per day through the date of judgment (a total of 148 days), that number increases to a total of $156,987.72. Regions is entitled to damages in this amount.

Attorney’s fees

Regions also filed a supplemental brief seeking attorney’s fees. The EFA provides that the debtor would reimburse Regions for all costs incurred in enforcing its rights under the EFA, including its attorney’s fees.

The court has reviewed the records submitted by Regions’ counsel and concludes that the descriptions of work completed are neither unduly vague nor inappropriately duplicative. Regarding counsel’s success or failure in the action, given the court’s resolution of the motion for default judgment, counsel succeeded in securing for Regions the entirely of the relief it requested.

However, with respect to the nature and difficulty of the litigation and the skill required to handle the matter, the court finds that counsel’s hourly rate — approximately $438 per hour — is high in light of the relative simplicity of the underlying claim and actions taken in this case to date. Accordingly, the court will order attorney’s fees at a reduced rate of $350 per hour. Based on that hourly rate and the 13 hours of work disclosed in Regions’ time entries, plaintiff’s counsel is entitled to $4,550 in attorney’s fees, plus $402 in costs.

Plaintiff’s motion for default judgment granted.

Regions Bank v. Frazier, Case No. 5:23-cv-00019, Aug. 8, 2023. WDVA at Harrisonburg (Dillon). VLW 023-3-462. 11 pp.