IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

AM/NS CALVERT LLC, etc., )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 14-0310-WS-B

 )

PSL, LTD., )

 )

Defendant. )

ORDER

This matter is before the Court on the plaintiff’s motion for default 

judgment. (Doc. 16). The Court previously entered default against the defendant 

for failure to plead or otherwise defend after being properly served with process, 

(Docs. 14, 15), and the defendant therefore is not entitled to notice of the instant 

motion.1 

“The defendant, by his default, admits the plaintiff’s well-pleaded 

allegations of fact .... A default judgment is unassailable on the merits but only so 

far as it is supported by well-pleaded allegations, assumed to be true.” Nishimatsu 

Construction Co. v. Houston National Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). 

Thus, “a default judgment cannot stand on a complaint that fails to state a claim.” 

Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1371 n.41 (11th Cir. 1997). 

Rather, “before entering a default judgment for damages, the district court must 

ensure that the well-pleaded allegations of the complaint ... actually state a cause 

of action and that there is a substantive, sufficient basis in the pleadings for the 

particular relief sought.” Tyco Fire & Security, LLC v. Alcocer, 218 Fed. Appx. 

860, 863 (11th Cir. 2007) (emphasis in original). 

 1 Fed. R. Civ. P. 5(a)(2); Hartford Casualty Insurance Co. v. Jenkins, 2009 WL 

4898319 at *1 n.4 (S.D. Ala. 2009).

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The amended complaint, (Doc. 10),2 alleges that the defendant guarantied 

payment of its subsidiary’s indebtedness to the plaintiff. The subsidiary failed to 

pay, and the entire indebtedness is presently due and owing. The amended 

complaint asserts a single count, for breach of contract under the guaranty. 

The guaranty is governed by Alabama law. (Doc. 16-1 at 8). “Every suit 

on a guaranty agreement requires proof of the existence of the guaranty contract, 

default on the underlying contract by the debtor, and nonpayment of the amount 

due from the guarantor under the terms of the guaranty.” Delro Industries, Inc. v. 

Evans, 514 So. 2d 976, 979 (Ala. 1987). Moreover, “to recover under a ... 

continuing guaranty, an additional element, notice to the guarantor of the debtor’s 

default, must be proved.” Id.

3

 The amended complaint alleges the existence of a 

guaranty, the subsidiary’s default, and the defendant’s failure to pay. It does not 

allege that notice was given the guarantor, but it does allege that all conditions to 

the defendant’s performance have been satisfied. (Doc. 10 at 5).4 These 

allegations actually state a cause of action, and the amended complaint contains a 

substantive, sufficient basis for the relief sought.

“While well-pleaded facts in the complaint are deemed admitted, plaintiffs’ 

allegations relating to the amount of damages are not admitted by virtue of default; 

rather, the court must determine both the amount and the character of damages.” 

Capitol Records v. Carmichael, 508 F. Supp. 2d 1079, 1084 n.4 (S.D. Ala. 2007);

see also Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003) (“A 

 2 The amended complaint varies from the original complaint only in its more 

satisfactory pleading of the plaintiff’s citizenship.

3 A continuing guaranty is “a guaranty of future indebtedness uncertain as to 

amount or time.” Delro Industries, 514 So. 2d at 979. The instant guaranty is a 

continuing guaranty. (Doc. 16-1 at 2-6). 

4 See Sharer v. Bend Millwork Systems, Inc., 600 So. 2d 223, 225 (Ala. 1992) 

(“The language of the guaranty is controlling in determining whether the holder of the 

guaranty is under a duty to notify the guarantor of a default by the principal, and notice 

need not be given when the terms of the guaranty expressly dispense with the need for 

it.”) (applying the rule to a continuing guaranty).

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court [on entering default judgment] has an obligation to assure that there is a 

legitimate basis for any damage award it enters ....”); Adolph Coors Co. v. 

Movement Against Racism and the Klan, 777 F.2d 1538, 1544 (11th Cir. 1985) (on 

default judgment, “[d]amages may be awarded only if the record adequately 

reflects the basis for award ....”); 10A Charles Alan Wright & Arthur R. Miller, 

Federal Practice and Procedure § 2688 at 58-59 (3rd ed. 1998) (“If the court 

determines that [the] defendant is in default, the factual allegations of the 

complaint, except those relating to the amount of damages, will be taken as true.”). 

Thus, the mere granting of default judgment does not establish the plaintiff’s 

entitlement to any quantum of damages.

A hearing to establish damages is not universally required. None is needed 

“where all essential evidence is already of record ..., such that any additional 

evidence would be truly unnecessary to a fully informed determination of 

damages.” Securities and Exchange Commission v. Smyth, 420 F.3d 1225, 1232 

n.13 (11th Cir. 2005). Here, suit is brought on a guaranty to obtain payment of the 

subsidiary’s indebtedness, and both the guaranty and the invoices reflecting the 

indebtedness, along with an affidavit establishing the amount of the indebtedness, 

have been submitted. As the record is sufficient to determine damages, and as the 

plaintiff does not request a hearing, none will be conducted.

“A judgment by default shall not be different in kind from or exceed in 

amount that prayed for in the demand for judgment.” Fed. R. Civ. P. 54(c). The 

amended complaint seeks recovery of $5,425,181.68, representing the subsidiary’s 

indebtedness. (Doc. 10 at 3). The motion for default judgment seeks judgment in 

the amount of $4,818,712.12 in the same indebtedness. (Doc. 16 at 3).5 The 

plaintiff’s requested default judgment thus does not violate Rule 54(c). 

 5 The lower figure results from a cash payment received by the plaintiff out of the 

subsidiary’s bankruptcy, the net amount realized on the re-sale of product recaptured 

from the subsidiary, and other credits. (Doc. 16-1 at 4).

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For the reasons set forth above, the plaintiff’s motion for default judgment 

is granted. Final judgment in the amount of $4,818,712.12 shall be entered by 

separate order. Costs are taxed against the defendant.

DONE and ORDERED this 27th day of April, 2015.

s/ WILLIAM H. STEELE

CHIEF UNITED STATES DISTRICT JUDGE

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