United States District Court, N.D. Alabama, Southern Division
DAVID PROCTOR UNITED STATES DISTRICT JUDGE
matter is before the court on the Motion for Default
Judgment, filed by Plaintiff AFC Franchising, LLC
(“Plaintiff” or “AFCF”) on April 23,
2018 against Defendants Rhonda Pellicano
(“Pellicano”) and Exigent Care, Inc.
(“Exigent Care” and collectively
“Defendants”). (Doc. # 34). After the Clerk's
Entry of Default against Defendants on October 24, 2017 (Doc.
# 26), Plaintiff now seeks a Rule 55(b) default judgment for
the monetary relief sought in the Complaint (Doc. # 1) and an
award totaling $193, 226.33. (Doc. # 34). For the reasons
outlined below, the current Motion (Doc. # 34) is due to be
the franchisor of the American Family Care system of urgent
care centers. (Doc. # 1 at ¶ 1). Exigent Care manages an
AFCF franchise in Virginia. (Id.). In April 2013,
AFCF acquired the assets of the Doctors Express system from
DRX Urgent Care, LLC. (Id. at ¶ 13). The sale
included an assignment of the Doctors Express franchise
agreements to AFCF. (Id.).
November 16, 2009, Pellicano, who is a managing owner of
Exigent Care,  executed a Franchise Agreement, which
granted Defendants the right to operate an urgent care
facility in Virginia. (Docs. # 1 at ¶¶ 1, 16-17;
1-3). The Franchise Agreement provides for an initial term of
fifteen years from the date of opening the franchise. (Doc. #
1-3 at p. 51). As a part of the Franchise Agreement,
Pellicano entered into a Personal Guarantee to
“punctually pay and perform each and every undertaking,
agreement, and covenant set forth in the Agreement . . . and
[be] personally liable for the breach of each and every
provision in the Agreement . . . .” (Id. at p.
59). In the Franchise Agreement, Pellicano also attested to
50% ownership in the franchisee.(Id. at p. 56, 60).
Section 3.1 and Exhibit A of the Franchise Agreement provides
for an ongoing weekly royalty payment of 6% of gross sales.
(Id. at p. 13, 51). Section 3.4 of the Franchise
Agreement provides for a monthly interest rate of 1.5% for
unpaid royalties. (Id. at p. 13). Section 17.3 of
the Franchise Agreement allows for AFCF to recover its costs
and attorney's fees to enforce the terms of the Franchise
Agreement. (Id. at p. 45).
opened their AFCF Center at 20 Norfolk Street,
Fredericksburg, Virginia, in early 2010. (Doc. # 1 at ¶
19). On March 15, 2010, Pellicano executed a Consent to
Transfer Agreement for the sole purpose of operating the
Doctors Express franchise location in Virginia. (Doc. # 1-4).
On March 30, 2016, AFCF sent a default and termination letter
to Defendants regarding a past due royalty amount of $156,
790.16. (Doc. # 1-1). Defendants have not paid any portion of
this amount. (Doc. # 1 at ¶ 1). On January 27, 2017,
AFCF sent another default and termination letter to
Defendants because they had failed to rebrand as required
under the terms of their Franchise Agreement. (Doc. # 1-2).
Defendants continue to operate their AFCF franchise despite
being in breach of material obligations of their Franchise
Agreement and have refused to complete the required
rebranding. (Doc. # 1 at ¶¶ 4, 15).
filed its Complaint on May 15, 2017. (Doc. # 1). On August
17, 2017, Pellicano was served. (Doc. # 20). On August 18,
2018, Exigent Care was served. (Doc. # 19). After the two
failed to answer or defend, AFCF moved for an Entry of
Default against Pellicano and Exigent Care on October 24,
2017. (Doc. # 25). On the same day, the Clerk of Court made
an Entry of Default against Defendants. (Doc. # 26).
Rule 55(b) states in relevant part:
(b) Entering a Default Judgment.
(1) By the Clerk. If the
plaintiff's claim is for a sum certain or for a sum which
can be made certain by computation, the clerk--on the
plaintiff's request, with an affidavit showing the amount
due--must enter judgment for that amount and costs against a
defendant who has been defaulted for not appearing and who is
neither a minor or incompetent person.
(2) By the Court. In all other
cases, the party must apply to the court for a default
judgment. A default judgment may be entered against a minor
or incompetent person only if represented by a general
guardian, conservator, or other like fiduciary who has
appeared. If the party against whom a default judgment is
sought has appeared personally or by a representative, that
party or its representative must be served with written
notice of the application at least 7 days before the hearing.
The court may conduct hearings or make referrals--preserving
any federal statutory right to a jury trial--when, to enter
or effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of ...