Virginia Lawyers Weekly//September 7, 2023
Virginia Lawyers Weekly//September 7, 2023//
Where a borrower and guarantor failed to respond to the lender’s breach of contract suit, they are liable for a total of $121,520.99 in damages, plus post-judgment interest and $34,352.15 in attorney’s fees.
Before the court is Wells Fargo Commercial Distribution Finance LLC’s motion for default judgment against Shore Saw & Mower Inc. and Jeffery S. Kelley. On March 24, 2023, Shore Saw & Motor’s registered agent was personally served with the verified complaint and summons.
On March 24, 2023, Mr. Kelley was personally served with the verified complaint and summons. Shore Saw & Mower and Mr. Kelley have not answered. On April 21, 2023, the clerk entered default against Shore Saw & Mower and Mr. Kelley.
To succeed on a breach of contract claim at trial under Virginia law, a plaintiff must establish: (1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant’s violation or breach of that obligation and (3) injury or damage to the plaintiff caused by the breach of obligation. The well-pled facts in the complaint establish that the parties entered into an enforceable contract, defendants failed to fulfill their obligations under those contracts and caused damage to plaintiff as a result of their breach.
Furthermore, all the default judgment factors favor relief. First, the amount of money involved is certainly not nominal, but it is unlikely to “shock the conscience if it were entered by default judgment,” especially given that the amount requested is largely predicted by the plain text of the agreements plaintiff entered into with defendants. Second, this matter is a private contractual dispute and does not appear to involve material issues of fact or issues of substantial public importance.
Third, default here is a result of defendants’ complete abandonment of its obligations under its agreements with plaintiff and is not the result of a mere technicality, such as missing a deadline by a few days. Fourth, plaintiff has been significantly prejudiced by the delay involved, having had to navigate defendants’ breach since late 2022 without any relief.
Fifth, the grounds for default here are clearly established by the factual and procedural history. And finally, there is no indication that defendants’ good-faith mistake or excusable neglect caused defendants’ default.
Damages and interest
As of May 11, 2023, the latest date on which plaintiff is requesting damages, plaintiff is owed $121,520.99 in damages on Counts One and Two, which constitutes the principal amount remaining pursuant to the agreement plus interest.
Plaintiff moves for an entry of pre-judgment interest in addition to the requested damages. The court finds that an award of pre-judgment interest is appropriate in this case because plaintiff clearly specified the requested damages and the calculation thereof when they first moved for default judgment. The court’s calculation is as follows: $120,242.91 (the principal amount left on the contract)+ $1,278.08 ($11.11 in interest as of May 11, 2012) = $121,520.99. Therefore, based on the calculations above, defendants are liable to plaintiff for a total of $121,520.99 in damages.
The court also finds that plaintiff is entitled to post-judgment interest, calculated in the manner set forth in 28 U.S.C. § 1961(a), “to compensate the successful plaintiff for being deprived of compensation for the loss from the time between the ascertainment of the damage and the payment by the defendant.”
“In Virginia, counsel must ‘establish, as an element of the attorney’s prima facie case, that the fees charged … are reasonable.’” The court has reviewed the billing records and finds that the requested fees of $49,074.50 are not reasonable.
This is a simple breach of contract for failure to make timely payments. Plaintiffs filed a complaint, a motion for a temporary restraining order, a motion for an order of seizure in detinue and the instant motion for default judgment. The motions ask for substantively the same relief, do not engage with complex areas of law and use the same facts. The defendants failed to respond to these motions, the motions are substantively similar and the motions do not address particularly complicated aspects of the law. Therefore, a downward departure is warranted in this case by 30 percent. Accordingly, defendants are liable to plaintiff for $34,352.15 in attorney’s fees.
Plaintiff’s motion for default judgment granted in part, denied in part.
Wells Fargo Commercial Distribution Finance LLC v. Shore Saw & Mower Inc., Case No. 2:23-cv-100, Aug. 10, 2023. EDVA at Norfolk (Jackson). VLW 023-3-473. 13 pp.