Nissan Motor Acceptance Corporation v. Prestige Imports of Thomasville Inc et al
Filing
47
ORDER granting in part and denying in part 34 Motion for Summary Judgment; finding as moot 45 Amended Motion; finding as moot 46 Amended Motion. Ordered by Judge Hugh Lawson on 6/19/2012. (nbp)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
NISSAN MOTOR ACCEPTANCE
CORPORATION,
Plaintiff,
v.
Civil Action No. 7:10-cv-129 (HL)
PRESTIGE IMPORTS OF THOMASVILLE,
INC., d/b/a Prestige Honda of
Thomasville; PRESTIGE MOTORCAR
GALLERY, INC., d/b/a Prestige Infiniti,
and MICHAEL CRAIG HORNSBY,
Defendants.
ORDER
Before the Court is Plaintiff Nissan Motor Acceptance Corporation’s
(“NMAC”) Motion for Summary Judgment (Doc. 34). For the reasons stated more
fully below, the Motion is granted in part and denied in part.
I. FACTUAL BACKGROUND
This case revolves around the business failure and bankruptcy of
Defendants Prestige Imports of Thomasville, Inc., d/b/a Prestige Honda of
Thomasville (“Prestige Honda”) and Prestige Motorcar Gallery, Inc., d/b/a
Prestige Infiniti (“Prestige Infiniti”). These car dealerships entered into loan
agreements with Plaintiff Nissan Motor Acceptance Corporation (“NMAC”), and
later defaulted on their payment obligations under the agreements. These
defaults are the subject of this litigation and are discussed below.
a. Prestige Honda Floorplan
On March 8, 2007, Defendant Prestige Honda entered into an Automotive
Wholesale Financing and Security Agreement with NMAC (the “Prestige Honda
Floorplan”). (Doc. 41, Defendant Hornsby’s Statement of Material Disputed Facts
and Responses to Plaintiffs’ Statement (“SMF”) ¶ 1.1) Under this agreement,
NMAC advanced funds to Prestige Honda for the purchase of vehicle inventory.
(SMF ¶ 1.) Defendant Michael Craig Hornsby (“Hornsby”) executed the Prestige
Honda Floorplan on behalf of Prestige Honda. (SMF ¶ 2.) The agreement
provided that Prestige Honda would pay NMAC upon the disposition of any
vehicles that had been financed by NMAC and held as inventory. (SMF ¶ 3.) The
agreement also stated that all advances given by NMAC would be payable to
NMAC on demand, along with interest and charges. (SMF ¶ 4.) Additionally,
Prestige Honda agreed to pay all costs and expenses of NMAC if there was a
default. (SMF ¶ 5.)
Prestige Honda defaulted on its payment obligation to NMAC under the
Prestige Honda Floorplan by failing to make payments when due. (SMF ¶ 6.)
Prestige Honda also violated the Floorplan by selling vehicles and not remitting
payment in accordance with the terms of the agreement. (SMF ¶ 7.) Following
the default, NMAC made several demands on Defendants for payment of the
1
All citations to Defendant’s Response to Plaintiff’s Statement of Material Facts
(Doc. 41) refer to statements that have been admitted by Defendant Hornsby and
are not in dispute.
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outstanding balance, but Defendants have yet to pay the sums owed. (SMF ¶
10.)
b. The Cap Loan
On March 20, 2007, NMAC and Defendant Prestige Honda entered into a
Dealer Capital Loan and Security Agreement (the “Cap Loan”). Under this
agreement, Prestige Honda promise to repay NMAC the principal sum of
$1,800,000, with interest. (SMF ¶ 12.) Prestige Honda defaulted on its payment
obligations to NMAC under the Cap Loan, failing to repay NMAC in accordance
with the stated terms of the agreement. (SMF ¶ 16.) The balance of the Cap
Loan was accelerated, and NMAC has made several demands on Defendant
Prestige Honda to repay the outstanding principal, along with the interest and
charges, but Defendant Prestige Honda has failed to make any payments. (SMF
¶16.)
c. The Prestige Infiniti Floorplan
On July 2, 2003, Defendant Prestige Infiniti entered into an Automotive
Wholesale Financing and Security Agreement with NMAC (the “Prestige Infiniti
Floorplan”). (SMF ¶ 18.) Defendant Hornsby executed the Prestige Infiniti
Floorplan on behalf of Prestige Infiniti. (SMF ¶19.) The terms of the Prestige
Infiniti Floorplan were similar to those included in the Prestige Honda Floorplan.
The agreement provided that upon the disposition of any of the vehicles financed
and held as inventory, Prestige Infiniti was obligated to pay NMAC the amount
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due relevant to the item sold. (SMF ¶ 20.2) Prestige Infiniti also agreed to pay all
advances on demand, (SMF ¶ 21), and agreed that if there was a default,
Prestige Infiniti would be responsible for all costs and expenses incurred as a
result of the default (SMF ¶ 22).
Prestige Infiniti defaulted on its obligations to NMAC under the terms of the
Floorplan by failing to make payments on time. (SMF ¶ 23.) Additionally, Prestige
Infiniti sold vehicles and failed to pay NMAC in accordance with the payment plan
under the Floorplan. (SMF ¶ 24.) Pursuant to these breaches of the agreement,
NMAC suspended all financing to Prestige Infiniti and accelerated the
outstanding balance of the Floorplan. (SMF ¶ 25.) NMAC has made several
demands on Defendants for payment of the outstanding balance, but have yet to
receive any payment. (SMF ¶ 27.)
d. The Prestige Infiniti Lease Agreement
On September 18, 1997, NMAC and Prestige Infiniti entered into an Infiniti
Loan Car Program Lease Agreement (the “Prestige Infiniti Lease Agreement”).
According to the terms of this agreement, Prestige Infiniti was able to lease
certain automobiles from NMAC on a sporadic basis. (SMF ¶ 29.) Defendant
Hornsby executed the Lease Agreement on behalf of Prestige Infiniti. (SMF ¶
30.) The Lease Agreement contained a clause that stated that a default would
occur if Prestige Infiniti failed to pay when any monthly lease payment was due
2
Statement 20 actually refers to the Prestige Honda Floorplan, as opposed to the
Prestige Infiniti Floorplan. However, the Court assumes that this is typographical
error and the parties intended to refer to Prestige Infiniti, not Prestige Honda.
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and the failure to pay continued for a period of ten days. (SMF ¶ 31.) Prestige
Infiniti failed to make lease payments in a timely fashion, and thus, Prestige
Infiniti defaulted under the Lease Agreement. (SMF ¶ 32.) Based on the terms of
the Agreement, NMAC repossessed six leased cars from Prestige Infiniti. (SMF ¶
33.) NMAC disposed of the cars that were repossessed from Prestige Infiniti and
applied the proceeds towards the outstanding balance. (SMF ¶ 34.)
Defendants Prestige Honda and Prestige Infiniti filed for Chapter Eleven
bankruptcy in January 2010 and the case is currently stayed as to those two
defendants. (Doc. 13.) However, the case against Defendant Hornsby has
moved forward, leading to this Motion for Summary Judgment which is analyzed
below.
II. STANDARD
Summary judgment is appropriate when “the pleadings, the discovery and
disclosure materials on file, and any affidavits show there is no genuine issue as
to any material fact and … the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322,
106 S.Ct. 2548, 2552 (1986). A genuine issue of material fact arises only when
“the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct.
2505 (1986).
When considering a motion for summary judgment, the court must
evaluate all of the evidence, together with any logical inferences, in the light most
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favorable to the nonmoving party. Id. at 354-55. The court may not, however,
make credibility determinations or weigh the evidence. Id. at 255; see also
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097
(2000).
The
party
seeking
summary
judgment
“always
bears
the
initial
responsibility of informing the district court of the basis for its motion, and
identifying
those
portions
of
the
pleadings,
depositions,
answers
to
interrogatories, and admissions on file, together with the affidavits, if any, which it
believes demonstrate the absence of a genuine issue of a material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986) (internal quotation
marks omitted). If the moving party meets this burden, the burden shifts to the
nonmoving party to go beyond the pleadings and present specific evidence
showing that there is a genuine issue of material fact, or that the nonmoving
party is not entitled to judgment as a matter of law. Id. at 324-26. This evidence
must consist of more than mere conclusory allegations. See Avirgan v. Hull, 932
F.2d 1572, 1577 (11th Cir. 1991). Under this framework, summary judgment
must be entered “against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which
that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.
III. ANALYSIS
In Defendant Hornsby’s Response to the Plaintiff’s Motion for Summary
Judgment (Doc. 40), he does not dispute the issue of his personal liability under
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the facts of this case. Defendant Hornsby has admitted that he personally
guaranteed the indebtedness of Prestige Infiniti (SMF ¶ 42) and Prestige Honda
(SMF ¶ 46). He executed a personal guaranty as to both dealerships that read
[Hornsby] hereby unconditionally and irrevocably guarantees to
[NMAC] … the full and prompt performance and payment of all
present and future liabilities of [Prestige Infiniti] to [NMAC]
irrespective of their nature or the time the arise … The liabilities
covered by this Guaranty … include all obligations and liabilities of
[Prestige Infiniti] … including without limitation … any and all
damages, losses, costs, interest, charges, attorneys’ fees and
expenses of every kind, nature and description suffered or
incurred by [NMAC], arising in any manner out of or in any way
connected with, or growing out of, said liabilities.
(SMF ¶¶ 44, 47.) Defendant Hornsby has also guaranteed the indebtedness of
Prestige Honda and Prestige Infiniti in a Cross-Guaranty, Cross-Collateral, and
Cross-Default Agreement dated March 8, 2007. (SMF ¶ 48.) That agreement
states that Defendant Hornsby gives the guaranties contained therein to induce
NMAC to make loans to Prestige Honda. (SMF ¶ 50.)
While Defendant Hornsby makes no argument as to his liability, he does
argue that “[w]hile the fact of liability may not be in dispute, the amount due
remains at issue.” (Doc. 40, p. 2.) In essence, Defendant Hornsby’s argument is
that the amount of damages that Hornsby owes NMAC cannot be determined at
this time, making summary judgment inappropriate. As Defendants Prestige
Honda and Prestige Infiniti move through the bankruptcy process, their assets
are being liquidated and monies from the liquidation process are being paid to
NMAC on a rolling basis. NMAC has already received payments from
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Defendants Prestige Honda and Prestige Infiniti (Doc. 40, p. 4) and, pursuant to
the Plan of Liquidation, NMAC will continue to receive additional payments from
the Bankruptcy Trustee (Doc. 40, p. 6). Thus, Defendant Hornsby argues that the
amount of damages that Defendant Hornsby owes to NMAC is uncertain, which
precludes summary judgment. The Court agrees that the amount of damages is
still unclear. However, the Court finds that the issue of liability can be decided on
summary judgment.
To prevail on a breach of contract claim, a plaintiff must show “(1) breach
and the (2) resultant damages (3) to the party who has the right to complain
about the contract being broken.” Duke Galish, LLC v. Manton, 308 Ga. App.
316, 321, 707 S.E.2d 555, 559 (Ga. App. 2011) (citing Kuritzky v. Emory Univ.,
294 Ga. App. 370, 371, 669 S.E.2d 179 (2008)). In this case, Plaintiff NMAC has
established the three required elements by demonstrating through uncontested
assertions of fact that Defendant Hornsby breached the agreements, causing
damages to NMAC. Based on the evidence that NMAC presented showing that
Defendant Hornsby is personally liable for the debts of the Defendants Prestige
Honda and Prestige Infiniti, the Court finds the most appropriate action at this
point is to grant the Motion for Summary Judgment as to the issue of liability, but
deny the Motion as it relates to damages. The issue of damages will be reserved
for resolution at a later time. See Schimmel v. Slaughter, 975 F. Supp. 1357,
1364 (M.D. Ga. 1997) (granting summary judgment on defendant’s liability, but
denying motion for summary judgment as to damages); Whitney Bank v. Marr,
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11-00534-CB-M, 2012 WL 827055 at *3 (S.D. Ala. Mar. 12, 2012) (granting
summary judgment on the issue of liability, but reserving the issue of damages
for resolution at a later date).
The Court finds the Plaintiff’s Amendments to the Motion for Summary
Judgment (Docs. 45, 46) do not need to be addressed at this time. Both of the
Amendments relate to the issue of damages. As the Court has reserved this
issue for consideration after the completion of Defendants Prestige Honda and
Prestige Infiniti’s bankruptcy proceedings, the facts submitted to the Court in the
Amendments are not of consequence for purposes of the Court’s decision today.
Plaintiff is encouraged to resubmit the information when the issue of damages is
at issue with the Court.
IV. CONCLUSION
Plaintiff’s Motion for Summary Judgment (Doc. 34) is granted as to the
issue of Defendant Hornsby’s liability, but denied as to the issue of damages.
The parties are ordered to notify the Court within one week of Defendants
Prestige Honda and Prestige Infiniti’s completion of the bankruptcy process. At
that point, the Court will reset deadlines for dispositive motions on the issue of
damages.
SO ORDERED, this 19th day of June, 2012.
s/ Hugh Lawson
HUGH LAWSON, SENIOR JUDGE
ebr
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