AMERICINN INTERNATIONAL, LLC v. MATAJ12 CORPORATION
2:21-cv-12455
D.N.J.Jun 1, 2022Background:
- AmericInn (Plaintiff) entered a 15-year franchise agreement with Mataj12 (Defendant) on Sept. 12, 2018; Mataj12 also executed a SynXis subscription agreement requiring periodic "Recurring Fees."
- Arvindkumar Patel and Sejalben Patel guaranteed Mataj12’s obligations by executing a Guaranty contemporaneous with the Franchise Agreement.
- Plaintiff sent multiple breach/cure notices and the parties executed a confidential settlement and later an Amended Settlement Agreement; Defendants also executed a Confession of Judgment consenting to entry of $202,555.54 if settlement payments defaulted.
- Plaintiff alleges Defendants failed to make settlement installments and ongoing Recurring Fee payments; Plaintiff calculated outstanding Recurring Fees plus interest of $357,917.22 as of Sept. 10, 2021.
- Plaintiff filed suit (June 11, 2021), served Defendants (July 20, 2021), Clerk entered default (Aug. 17, 2021), and Plaintiff moved for default judgment seeking $357,917.22 plus prejudgment interest.
- The Court (S.D.N.J.) granted the unopposed motion, finding jurisdiction, proper service, sufficient cause of action, and awarding $357,917.22.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction (diversity/amount) | Diversity exists; amount in controversy > $75,000 | Not asserted | Court found diversity and amount satisfied; SMJ exists |
| Personal jurisdiction / forum-selection clause | Franchise contains NJ forum-selection clause; guarantors bound | Not raised as defense | Clause enforceable; personal jurisdiction over Mataj12 and guarantors |
| Service of process | Summons and complaint personally served on A. Patel (agent) and on both guarantors within Rule 4(m) | Not contested | Service was timely and proper |
| Sufficiency of complaint / breach claims | Contracts (Franchise, SynXis, Guaranty, Amended Settlement) breached; damages shown | No answer / no defenses | Complaint states valid breach claims; liability established by default |
| Default judgment appropriateness & damages | Default proper; itemized statement supports $357,917.22 (fees + interest) | No response | Default judgment granted; damages awarded $357,917.22 |
Key Cases Cited
- Hritz v. Woma Corp., 732 F.2d 1178 (3d Cir. 1984) (district court has discretion to enter default judgment)
- DIRECTV, Inc. v. Pepe, 431 F.3d 162 (3d Cir. 2005) (allegations in complaint taken as true except damages after default)
- Comdyne I, Inc. v. Corbin, 908 F.2d 1142 (3d Cir. 1990) (same principle for default)
- Coastal Steel Corp. v. Tilghman Wheelabrator, Ltd., 709 F.2d 190 (3d Cir. 1983) (factors to invalidate forum-selection clauses)
- Lincoln Ben. Life Co. v. AEI Life, LLC, 800 F.3d 99 (3d Cir. 2015) (LLC citizenship determined by members)
- Cadapult Graphic Sys., Inc. v. Tektronix, Inc., 98 F. Supp. 2d 560 (D.N.J. 2000) (forum-selection clauses are prima facie valid)
- Coyle v. Englander’s, 488 A.2d 1083 (N.J. Super. Ct. App. Div. 1985) (elements of breach of contract)
- Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171 (D.N.J. 2008) (factors for default-judgment propriety)