United States District Court, N.D. Georgia, Atlanta Division
OPINION AND ORDER
WILLIAM S. DIJFFEY, JR. UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff Microtel Inns and
Suites Franchising, Inc.'s ("MISF") Motion for
Entry of Default Judgment as to Defendants Anira Hotels,
Inc., Nayankumari Patel, and Chunilal Patel (collectively,
a Georgia corporation with its principal place of business in
Parsippany, New Jersey. (Compl.  ¶ 1). Defendant
Anira Hotels, Inc. ("Anira") is a Florida
corporation with its principal place of business in
Jacksonville, Florida (Id. ¶ 2). Individual
Defendants Nayankumari Patel and Chunilal Patel are the
principals of Anira and are citizens of Florida.
(Id. ¶¶ 3-4).
January 6, 2006, Anira entered into a license agreement (the
"License Agreement") with MISF to operate a 97-room
Microtel® guest lodging facility located at 4940 Mustang
Road, Jacksonville, Florida 32216 (the "Hotel") for
twenty years. (Id. ¶¶ 9-10). Under the
terms of the License Agreement, Anira agreed to make monthly
payments to MISF for "royalties, marketing/reservation
contribution, taxes, interest, reservation system user fees,
and other fees" (collectively, "Recurring
Fees"). (Id. ¶ 11). Anira also agreed to
an interest penalty equal to "the lesser rate of one and
one-half percent (1.5%) per month or the maximum rate
permitted by law" for late payments of Recurring Fees.
(Id. ¶ 12). The License Agreement allowed MISF
to terminate the agreement with notice to Anira "if
Anira failed to pay MISF any fees or other amounts due under
the License Agreement." (Id. ¶ 15). In the
event of a termination, the License Agreement permitted MISF
to demand liquidated damages in an amount equal to $3000 for
each guest room Anira operated at the Hotel. (Id.
¶ 16; License Agreement [1.1], [1.2] ¶IOE).
Anira defray the cost of converting the Hotel to a
Microtel® guest lodging facility, the License Agreement
provided a $100, 000 financial incentive from MISF to Anira.
(Id. ¶ 17). On each anniversary of the
Hotel's opening date, one-tenth (l/10th) of the original
principal amount of the financial incentive would be forgiven
without payment, but, in the event of a termination, Anira
agreed to repay the outstanding balance of the financial
incentive. (Id. ¶¶ 17-18).
to to the execution of the License Agreement, N. and C. Patel
executed a joint and several guaranty of Anira's
obligations under the agreement. (Id. ¶ 20;
February 7, 2012, MISF sent a series of letters advising
Anira that it was in breach of the License Agreement for
failing to meet its financial obligations under the License
Agreement. ( ¶¶ 23-28; February 7, 2012, Letter
[1.4]; March 22, 2012, Letter [1.5]; July 10, 2012, Letter
[1.6]; August 20, 2012, Letter [1.7]; November 20, 2012,
Letter [1.8]). MISF warned Anira that if the default was not
cured, the License Agreement might be subject to termination.
(Id.). On December 31, 2012, MISF terminated the
License Agreement. ( ¶ 29; December 31, 2012, Letter
22, 2015, MISF filed this action for breach of contract.
(Id.). On June 6, 2015, MISF served the Complaint on
Anira and C. Patel. (, ). On March 13, 2016, MISF
served the Complaint on N. Patel. (). Defendants failed
to respond, and no counsel appeared on their behalf.
April 26, 2016, MISF filed its Motion for Clerk's Entry
of Default Against Defendants  based on Defendants'
failure to respond to the Complaint. On April 27, 2016, the
Clerk entered default against Defendants.
29, 2016, MISF moved for default judgment. (). MISF is
seeking to recover outstanding Recurring Fees, liquidated
damages, remaining principal balance of the financial
incentive, prejudgment interest, and postjudgment interest.
55(b) of the Federal Rules of Civil Procedure provides that
default judgment may be entered against defaulting defendants
(1) By the Clerk. If the plaintiff s claim is for a
sum certain or a sum that 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 nor an incompetent
(2) By the Court. In all other cases, the party must
apply to the court for a default judgment. . . . 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