Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_15-cv-00151/USCOURTS-alsd-1_15-cv-00151-2/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1332 Diversity-Negotiable Instrument

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1

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

KEY BANK, NATIONAL ASSOCIATION, )

Plaintiff, )

 )

v. )

 ) CIVIL ACTION 15-00151-KD-B

CLARKE COUNTY HEALTHCARE, LLC, )

et al., )

Defendants. )

ORDER

This matter is before the Court on the Supplement to Plaintiff’s Motion for Default Judgment 

against Defendant Resurgence Health Group, LLC, seeking an award of reasonable attorneys’ fees 

and costs. (Doc. 33, 37).

I. Background

On June 5, 2006, Resurgence Health Group, LLC (a Georgia LLC) (Resurgence) executed a 

Guaranty, covering a Master Lease Agreement (agreement) simultaneously executed between 

General Electric Capital Corporation (GE) and Clarke County Hospital (Clarke) for the lease of a 

Philips 16-slice CT Scanner with Bone Density Package and Medrad Injector (equipment). (Doc. 1-1; 

Doc. 33-1 (Aff. Barnes)1). On August 16, 2006, the equipment was accepted by Clarke and 

certified as properly delivered and installed. (Doc. 33-1 (Aff. Barnes)).

Pursuant to the agreement, Clarke agreed to make monthly payments of $9,538.92 for 60 

months, starting on May 15, 2006. (Doc. 1-1). Additionally, GE could assign the Guaranty 

without the Guarantor’s consent as well as proceed against the Guarantor by suit or otherwise collect 

monies due/guaranteed with or without notice/demand, with or without joinder of Clarke. (Id.) 

On February 1, 2009, Clarke defaulted on the Agreement by failing to make payments as required 

 1 Litigation Coordinator for Plaintiff. 

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and further failed to make payments as scheduled on January 1, 2010, May 1, 2010, June 1, 2010 and 

July 1, 2010. (Doc. 1-4 at 2). 

On July 27, 2010 GE assigned its interest in the agreement to Plaintiff. (Doc. 33-1 (Aff. 

Barnes)). On July 29, 2010, Plaintiff sent Clarke a Notice of Right to Cure Default by paying the 

amount due of $37,821.48 within 21 days, or all remaining payments would be accelerated and the 

process of repossession of the equipment may be initiated. (Id.) Plaintiff also informed Clarke 

that it would be responsible for any collection fee costs, repossession fees, costs and reasonable 

attorneys’ fees/costs. (Id.) Clarke did not cure the default within the timeframe allotted. On 

September 21, 2010, Plaintiff accelerated the debt, declared the agreement to be in default, and 

demanded $237,784.94 as due and owing within 10 days. (Id.; Doc. 1-5). Plaintiff then 

repossessed the equipment. (Doc. 33-1 (Aff. Barnes)). On April 8, 2011, Plaintiff sent Clarke 

notice of intent to sell the equipment it had repossessed, by private sale, notifying Clarke of a right to 

redeem via payment of $211,885.94 plus costs. (Id.; Doc. 1-6). Clarke did not exercise its right to 

redeem the equipment before it was sold. (Doc. 33-1 (Aff. Barnes)). On January 8, 2015, Plaintiff

issued a Notice of Deficiency to Clarke, demanding payment of $98,487.08 within ten days (the 

amounts due after the equipment had been sold – an offset). (Doc. 1-7). Clarke made no 

payments. (Doc. 33-1 (Aff. Barnes)). 

Under the terms of the Guaranty associated with the agreement, Plaintiff (as GE’s assignee) 

may proceed against the Guarantor – Resurgence – to collect the amounts due from Clarke. (Doc. 

33-1 (Aff. Barnes); Doc. 33-2). Plaintiff contends that based on the Guaranty, Resurgence 

guaranteed payment to GE and its assignees without set-off or counterclaim, as well as waived notice 

of Acceptance of Guaranty and any notice of default on behalf of Clarke. (Id.) Plaintiff adds that 

Resurgence also irrevocably and unconditionally waived all statutory, contractual, common law, 

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equitable and other claims against Clarke or its assets by reason of any amounts paid or collected or 

due. (Id.) Plaintiff asserts that Resurgence guaranteed payment of all losses, costs, reasonable 

attorneys’ fees and expenses arising due to Clarke’s default or its own default. (Id.) As such, 

Plaintiff demanded payment of Clarke’s debt as guaranteed by Resurgence; Resurgence refused to 

pay. (Doc. 33-1 (Aff. Barnes)). On March 20, 2015, Plaintiff sued Resurgence for breach of 

guaranty. (Doc. 1). Plaintiff seeks recovery of $98,487.08 plus accruing interest.

Resurgence was served on June 25, 2015 via service on CT Corporation System, 1201 

Peachtree Street NE, Atlanta, GA, 30361, its registered agent. (Docs. 19, 24). Plaintiff asserts that 

Resurgence has failed to timely plead or otherwise defend. (Docs. 24-1 (Decltn. Fleming), 24-2,

33). Plaintiff adds that the State of Georgia has not administratively dissolved Resurgence and it 

remains listed on the Georgia Secretary of State corporate database as an “Active/noncompliance” 

business. (Docs. 24-1 at 2, 24-2, 24-3). On July 17, 2015, Plaintiff requested entry of a Clerk’s 

default against Resurgence for its failure to plead or defend. (Doc. 24). On July 21, 2015, the 

Clerk entered a Rule 55(a) Default against Resurgence. (Doc. 25). On August 25, 2015, Plaintiff 

moved for a default judgment against Resurgence. (Doc. 33).

II. Default Judgment

On December 10, 2015, the Court entered a default judgment in favor of Plaintiff and 

against Resurgence finding as follows, in relevant part (Doc. 35):

The Court is satisfied that Resurgence has notice of the default proceedings against it. 

Additionally, a Clerk’s Rule 55(a) default was entered against Resurgence in accordance 

with Rule 55(a) for failure to plead, answer or otherwise defend this case. Moreover, 

there is a sum certain which can be made ascertainable before the Court, from which a 

default judgment can be entered without a hearing. Securities and Exchange 

Commission v. Smyth, 420 F.3d 1225, 1231-1232 (11th Cir. 2005) (“Judgment of default 

awarding cash damages could not properly be entered without a hearing unless the 

amount claimed is a liquidated sum or one capable of mathematical calculation) (internal 

quotes and citations omitted); Id. at n.13 (noting that an “evidentiary hearing is not a per 

se requirement; indeed, Rule 55(b)(2) speaks of evidentiary hearings in a permissive 

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tone....We have held that no such hearing is required where all essential evidence is 

already of record[]”)....Further, ...[t]he Court is satisfied that the well-pleaded 

allegations of the Complaint state a basis for relief as to the claims asserted and that there 

is a substantive, sufficient basis for the relief Plaintiff seeks. 

Specifically, Plaintiff asserts a breach of guaranty claim against Resurgence, as Clarke’s 

guarantor, for Clarke’s failure to comply with the terms of the agreement. The 

agreement and Guaranty are governed by the laws of the State of Wisconsin. (Doc. 1-1 

at 7 at Section 23(e); Doc. 1-8). Upon consideration of the evidence submitted by 

Plaintiff and the well-pleaded allegations of the Complaint, default judgment is due to be 

entered against Resurgence....As to the elements for breach of guaranty, the Court finds 

that the well-pleaded allegations and evidence submitted establish: 1) the existence of a 

contract creating obligations flowing from Resurgence to Plaintiff (the Guaranty); 2) a 

breach of those obligations (Resurgence’s failure to pay amounts due and owing under 

the Guaranty); and 3) damages from the breach (including non-payment of the amounts 

due under the Lease (and Guaranty), accruing interest, remarketing expenses (after 

repossession and resale of equipment) etc.). Specifically, the evidence shows execution 

of the Guaranty by Resurgence. The Guaranty explains Resurgence’s principal 

obligation and terms of the Guaranty itself, including that it guaranteed payment without 

set-off or counterclaim and guaranteed payment of all losses, costs, reasonable attorneys’ 

fees and expenses due to Clarke’s default (or its own). Plaintiff relied on the Guaranty. 

The evidence indicates that Clarke defaulted under the Lease, which was guaranteed by 

Resurgence, due to its failure to pay the sums due and owing under the Lease. Upon 

Plaintiff’s written demand for payment, Resurgence failed to pay the sums due and owing 

under the Guaranty. Moreover, Plaintiff’s reliance on the Guaranty is expressed in the 

document itself. As such, upon consideration, the Court finds that Plaintiff is entitled to 

default judgment against Resurgence, for breach of the Guaranty, as a matter of 

Wisconsin law.

***

Plaintiff requests entry of a default judgment against Resurgence in the amount of 

$98,487.08 plus accruing interest. Upon review of the Guaranty, invoices, notices

submitted, Affidavit and Declaration filed in support, the Court is satisfied that the 

amounts requested are due and owing to Plaintiff by Resurgence. As such, that portion 

of Plaintiff’s motion for default judgment damages, addressing the breach of guaranty 

claim against Resurgence, is GRANTED in part such that Plaintiff is awarded 

$98,487.08. However, Plaintiff also seeks an unspecified amount of accrued late 

charges....The Court is unable to assess fees and costs/expenses at this juncture. 

Plaintiff has not provided any supporting documentation regarding its request for 

attorneys’ fees and costs/expenses, or referenced that portion of either the agreement or 

Guaranty which provide for recovery of same. Plaintiff has not briefed the propriety for 

recovery of such fees and costs under Wisconsin law. Likewise, Plaintiff has not 

provided any attorneys’ billing records, invoices and/or itemized statements, complete

information about all of the individuals who billed for legal services or their 

qualifications/years of experience, and/or whether the fees and costs were reasonably 

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incurred under the relevant state’s law (Wisconsin) governing such awards. As such, 

Plaintiff shall Supplement its motion, with the requisite support for this request, on or 

before December 31, 2015....Plaintiff is ORDERED to file, on or before December 31,

2015, a Supplement to its motion addressing the specific amount of accrued costs sought 

as well as attorneys’ fees and costs/expenses, and further: 1) citing those specific 

provisions in the relevant agreements which provide for recovery of fees and 

costs/expenses, and assessing the propriety of recovery of same under Wisconsin law; 

and 2) attaching whatever materials it deems necessary and appropriate to support its 

claim for fees and costs/expenses in conjunction with Wisconsin law...

***

Additionally, Plaintiff cannot recover the attorneys’ fees and costs sought against Clarke 

and then also recover that same sum against Resurgence, as such would be yet another 

double recovery. As such, Plaintiff is ORDERED to specify and delineate in the 

December 31, 2015 Supplement, those fees and costs incurred relative to Resurgence, 

versus those incurred relative to Clarke.

Plaintiff has now submitted its Supplement (Doc. 37).

III. Attorneys’ Fees

Plaintiff requests – via the Affidavit of Litigation Coordinator Barnes and Declaration of 

Daniel C. Fleming -- $10,334.00 in reasonable attorneys’ fees and $1,307.75 in costs/expenses. 

(Doc. 34-1 (Aff. Barnes); Doc. 37 at 5 (Decltn. Fleming)). 

However, Plaintiff has submitted fees and costs “jointly and severally” for both Clarke 

and Resurgence even though they are two (2) different defendants. The Court previously 

instructed Plaintiff “to specify and delineate in the....Supplement, those fees and costs incurred 

relative to Resurgence, versus those incurred relative to Clarke.” However, Plaintiff has failed 

to comply with the Court’s instruction, and thus, the Court is not able to assess the propriety of 

fees and costs for each particular and distinct defendant. As such, Plaintiff’s request for fees 

and costs as to Resurgence is DENIED at this time. Plaintiff has leave to file, on or before 

January 19, 2016, an Amended Supplement which complies with the Court’s prior instruction 

and delineates those fees and costs for the attorney work associated with Clarke, from those for 

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the attorney work associated with Resurgence.

DONE and ORDERED this 11th day of January 2016.

/s/ Kristi K. DuBose

KRISTI K. DuBOSE

UNITED STATES DISTRICT JUDGE

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