Franchise Holding II, LLC v. Huntington Restaurants Group, Inc.

Huntington Restaurants Group, Inc., Richard P. Beattie and Michelle Beattie (collectively, “HRG”) appeal the district court’s denial of their motion to set aside an entry of default and a default judgment. While the law favors deciding disputes on the merits, the district court’s decision here to deny HRG’s motion to set aside the entry of default and default judgment was squarely within its discretion. Furthermore, the district court clerk had the authority to enter the default judgment. For these reasons, we affirm.

Background

This case arises out of HRG’s default on four related loans. In July 2000, Atherton Capital (Franchise Holding’s predecessor-in-interest) lent Huntington Restaurants Group, Golden Management, Inc., and another entity nearly $20 million! Richard P. Beattie and Michelle Beattie personally guaranteed those loans. HRG secured the loans with various Denny’s restaurants in Georgia and Florida, which HRG or Golden Management owned. Atherton later assigned the loans to Franchise Holding II, LLC (“Franchise Holding”).

The terms of the loans obligated HRG to make payments every month until paid off. Within less than a year, business difficulties arose and HRG…