Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-01854/USCOURTS-azd-2_07-cv-01854-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

G.E. Capital Business Asset Funding

Corporation of Connecticut, 

Plaintiff, 

vs.

KNZ 170 Grand Concourse Donut L.L.C.;

KNZ 149 Broadway Donuts, L.L.C.; 

et al., 

Defendants. 

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CV 07-1854-PHX-JAT

ORDER

Plaintiff GE Capital loaned both Defendant KNZ 149 and Defendant KNZ 170 money

for equipment. Defendant Imran Ali guaranteed the payment of both loans and KNZ 149

guaranteed the payment of the loan to KNZ 170. KNZ 149 and KNZ 170 both defaulted on

their loans and Mr. Ali and KNZ 149 defaulted on their guarantee obligations. GE Capital

sued Defendants KNZ 149, KNZ 170, and Ali (the “Defaulting Defendants”) and other

guarantors (the “Non-defaulting Defendant”) in state court. Plaintiff personally served the

Defaulting Defendants with the complaint on August 29, 2007. On September 27, 2007, the

Non-Defaulting Defendants removed the case to this district.

After removal, Defendants had until October 4, 2007 to file their answer or responsive

pleading. The Defaulting Defendants never answered or otherwise responded to the

complaint. Plaintiff therefore filed its Application for Entry of Default and served it upon

Case 2:07-cv-01854-JAT Document 36 Filed 06/04/08 Page 1 of 3
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A default judgment cannot exceed in amount what a plaintiff demands in the

complaint. Fed.R.Civ.P.54(c). 

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KNZ 149, as borrower, and Mr. Ali, as guarantor, are both liable for the principal

amount of the KNZ 149 loan. KNZ 170, as borrower, and KNZ 149 and Mr. Ali, as

guarantors, are liable for the principal amount of the KNZ 170 loan.

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the Defaulting Defendants. The Clerk of the Court filed an Entry of Default against the

Defaulting Defendants on November 15, 2007. Plaintiff filed the pending motion for entry

of default judgment (Doc. #18) on November 21, 2007. Defaulting Defendants have taken

no action in this case since that time. 

In its Proposed Judgment, Plaintiff seeks a total principal amount of over $2 million.

But a review of the Complaint reveals that the total outstanding principal due on the two

loans is $905,207.35.1

 Plaintiff may recover that amount from more than one party,2 but it

cannot recover more than that principal amount. 

Plaintiff also asks for prejudgment interest at a 14% rate. Neither the motion for

default judgment nor Mr. Meltz’s declaration in support of the motion for default judgment

cites a source (i.e., a section of the Notes or Security Agreements) for the 14% rate. The

Court therefore, as a default, will award prejudgment interest at the applicable federal rate.

Further, post-judgment interest on a judgment from federal court accrues interest at the rate

provided by statute. 28 U.S.C. §1961(a) (“Such interest shall be calculated from the date of

the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity

Treasury yield, as published by the Board of Governors of the Federal Reserve System, for

the calendar week preceding.”) (emphasis added).

Plaintiff filed a motion for attorneys’ fees and costs with its motion for default

judgment. Plaintiff seeks its total amount of attorneys fees. But one count and several

defendants remain in the case. The Court therefore reviewed the time entries submitted by

Plaintiff’s counsel to determine which entries specifically relate to the requested default

judgment. The Court will award attorneys’ fees based on that determination. The Court will

not award any costs at this time because it cannot determine which costs relate solely to the

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28 U.S.C. §1961(a) provides the applicable federal rate.

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Defaulting Defendants from the materials submitted.

Accordingly,

IT IS ORDERED GRANTING Plaintiff’s Motion for Entry of Default Judgment

Against KNZ 170 Grand Concourse Donut, LLC, KNZ 149 Broadway Donuts, LLC; and

Imran Ali (Doc. #18).

AND, perceiving no just reason for delay, the Court FURTHER ORDERS:

a) Final Judgment for Plaintiff G.E. Capital Business Asset Funding Corp. of

Connecticut against Defendants KNZ 149 Broadway Donuts, LLC, and Imran Ali in the

principal amount of $427,701.81, with pre-judgment interest on that principal at the

applicable federal rate from June 2, 2007 until the date of this Order and post-judgment

interest at the applicable federal rate;3

b) Final Judgment for Plaintiff G.E. Capital Business Asset Funding Corp. of

Connecticut against Defendants KNZ 149 Broadway Donuts, LLC, KNZ 170 Grand

Concourse Donut, LLC, and Imran Ali in the principal amount of $477,505.54, with prejudgment interest on that principal at the applicable federal rate from June 2, 2007 until the

date of this Order and post-judgment interest at the applicable federal rate. 

IT IS FURTHER ORDERED GRANTING Plaintiff’s Application for Attorneys’ Fees

(Doc. #23) in the amount of $2,573.88 against Defaulting Defendants. 

DATED this 4th day of June, 2008.

Case 2:07-cv-01854-JAT Document 36 Filed 06/04/08 Page 3 of 3