BrooksGreenblatt, L.L.C. v. C. Martin Company, Inc.

Filing 132

RULING...The 129 motion by third party defendant, John Lee Harden, Jr., for summary judgment is DENIED, and the 126 motion by third partyplaintiff, C. Martin Company, Inc., for reconsideration of the Ruling of March 16, 2012 is GRANTED only insof ar as C. Martin seeks summary judgment against third party defendants, Superior Logistics, L.L.C., and John Lee Harden, Jr., and default judgment against third party defendants, Richard G. Poore and Carlos Johnson, for damages in the amount of $ 290,900.00 and DENIED insofar as C. Martin seeks an award of $2,527.80 for costs incurred by Fidelity in this matter. The foregoing denial, however, is without prejudice to the right of C. Martin, as the prevailing party, to seek reasonable costs pursuant to Federal Rule of Civil Procedure 54(d). Judgment shall issue accordingly. Signed by Chief Judge Brian A. Jackson on 5/4/2012. (LSM)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BROOKSGREENBLATT, L.L.C.
CIVIL ACTION
VERSUS
NO. 08-454-BAJ-SCR
C. MARTIN COMPANY, INC.

RULING
This matter is before the Court on a motion by third party defendant, John Lee
Harden, Jr. (“Harden”), for summary judgment (doc. 129) and on a motion by third
party plaintiff, C. Martin Company, Inc. (“C. Martin”), for a new trial, rehearing, or
reconsideration (doc. 126). Jurisdiction is grounded in 28 U.S.C. § 1332.
On March 16, 2012, this Court granted in part, a motion by C. Martin for
summary judgment and for default judgment. In doing so, the Court noted that the
undisputed facts established that Superior Logistics, LLC (“Superior”), had breached
a valid contractual obligation to forward a $290,000.00 payment to Fidelity;1 that C.
Martin was validly subrogated to Fidelity’s rights with regard to Superior, Harden,
Richard G. Poore (“Poore”), and Carlos Johnson (“Johnson”), under the Factoring
Agreement; and that Harden was obligated in solido with Superior as a guarantor of
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The Court’s statement in the previous ruling as to the amount of the check involved in
the breach was based on the undisputed facts submitted by C. Martin in support of the motion.
The undisputed facts submitted (doc. 116, pp. 4-10), however, are inconsistent insofar as C.
Martin describes the check at issue as a “check in the sum of $290,000.00" when setting forth
the actual breach (id. at ¶ 10), but as a “check in the sum of $290,900, elsewhere in the
statement (id. at ¶¶ 7-9, 11-13). The amount stated in paragraphs 7-9 and 11-13 of the
statement of undisputed facts, as well as the record in general (see, e.g. doc. 116, p. 13, 35, 60)
demonstrates that C. Martin’s inconsistent description in Paragraph 10 of the statement of
undisputed facts is an isolated typographical error, and it is treated as such in this ruling. See
also, Memorandum in Support of Motion for Summary Judgment, filed by John Lee Harden,
wherein Harden acknowledges that “Martin sent payment of $290,900.00 to Superior instead of
BrooksGreenblatt” (doc. 129-1, p. 3).

the obligations imposed on Superior by the agreement. The Court also found that the
undisputed evidence established a prima facie case of liability on the part of Poore
and Johnson as guarantors of the obligations imposed on Superior by the Factoring
Agreement. Thus, the Court granted the motions insofar as C. Martin sought to
establish the liability of Superior, Harden, Poore, and Johnson. (Doc. 12).
Having concluded that C. Martin was validly subrogated to the rights granted to
Fidelity under the Factoring Agreement, the Court then looked to the Factoring
Agreement and to the evidence to determine whether C. Martin had satisfied it’s
burden to establish quantum under the terms of the contract. In doing so, the Court
noted that “the question before the Court is not necessarily what C. Martin paid for
subrogation, but is, instead, whether the amount sought by C. Martin is less than or
equal to the amount due C. Martin in light of the breach and the specific rights Fidelity
assigned to C. Martin through the act of subrogation” (doc. 124, p. 12).
The Court also stated:
As is noted supra, the plain language of the Factoring
Agreement provides that, should Superior fail to properly
deliver or remit a payment to Fidelity, Superior “agrees to
pay a penalty of fifteen (15.00%) of the amount of such
payment” and to repurchase the receivable. The agreement
further provides that the repurchase price “shall be the
Advance Amount of the Invoice plus the Discount plus the
Floating Discount minus any Amount Collected with respect
to the particular Receivable being repurchased.” The Court
also notes that Superior was obligated under the agreement
to maintain a reserve with Fidelity and the agreement
specifically provides that, upon the occurrence of “any event
requiring Vendor to repurchase any one or more of the
Receivables sold by Vendor to Factor hereunder, Factor
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shall charge the Reserve to satisfy Vendor’s Repurchase
Obligation” (doc. 116, pp. 37, 38, ¶¶ 1(g), 2(b)).
(Doc. 124, p. 12).
Because no evidence was set forth to establish whether the fifteen percent
penalty had been paid or was outstanding in whole or in part, or what the repurchase
price was, or whether that repurchase price was satisfied in whole or in part from the
reserve which Superior was obligated to maintain with Fidelity, the Court concluded
that genuine issues of fact precluded summary judgment as to quantum. For the same
reasons, the Court concluded that C. Martin had failed to carry its burden to establish
quantum for purposes of the motion for default judgment.
At a pretrial conference on March 21, 2012, a bench trial was scheduled for
June 27, 2012, and the parties were informed that the Court would allow them one
more opportunity to file motions to resolve the remaining issues. (doc. 125). The
instant motions were filed on April 5, 2012.
1.

Motion by John Lee Harden, Jr., for Summary Judgment
John Lee Harden, Jr., proceeding pro se, admits breaching the contract by

failing to forward the C. Martin payment to Fidelity (doc. 116, p. 71), but he argues that
he did so because C. Martin had breached other obligations and because C. Martin
“knew that Harden would choose to pay the subcontractors . . . (doc . 129-1, p. 4).
Thus, he presents the same argument that was addressed and rejected in the Court’s
previous ruling, and for all the reasons provided therein, Harden’s motion for summary
judgment shall be denied.
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2.

Motion by C. Martin Company, Inc., for Reconsideration
In the Ruling of March 16, 2012, the Court denied C. Martin’s motion for

summary judgment as to quantum upon concluding that C. Martin had incorrectly
defined its damages simply as the amount that it had paid to settle the claim asserted
against it by Fidelity and to be subrogated to Fidelity’s rights under the Factoring
Agreement, and had thus failed to set forth evidence to properly establish the
damages to which it is entitled under the Factoring Agreement.
C. Martin, however, argues that the Court’s denial of summary judgment as to
quantum is “manifest error which is prejudicial to C. Martin” (doc. 126, p. 2). In support
of that position, C. Martin asserts that its damages are based on the amount paid for
subrogation, but are based on: (1) the amount of damages sustained by Fidelity when
Superior failed to forward the C. Martin payment of $290,900.00, plus (2) “court costs
of $2,527.80 incurred by Fidelity in this litigation” (doc. 126, p. 7).
A.

Damages

As counsel for C. Martin notes, the plain language of the Factoring Agreement
provides that the Factor “may require” a vendor to repurchase a receivable in the event
of a breach (doc. 126, quoting doc. 116, p. 38) (emphasis added), and, therefore, the
contract does not provide that the repurchase clause is the exclusive remedy available
upon a breach. Moreover, pursuant to the Louisiana Civil Code, “[d]amages are
measured by the loss sustained by the obligee and the profit of which he has been
deprived.” La.Civ.Code art. 1995. It is undisputed that Superior breached the

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Factoring Agreement by failing to remit to Fidelity the C. Martin payment in the amount
of $290,900.00, and that Superior used the funds, instead, to pay its own
subcontractors (see doc 124, pp. 3-4, and supra, n. 1). Thus, the Court concludes that
the undisputed facts establish that Fidelity incurred $290,900.00 in damages under
Louisiana law as a result of Superior’s breach of the Factoring Agreement.
The Court also notes that, despite having been presented with ample
opportunity to do so, neither Superior nor John Lee Harden, Jr., has set forth any
evidence from which a reasonable trier of fact could conclude that Superior or any of
its guarantors have reimbursed either Fidelity or C. Martin for any portion of the
damages incurred.
Accordingly, the motion by C. Martin for reconsideration shall be granted and
summary judgment shall issue in favor of C. Martin as to the claim for $290,900.00 in
damages.
B.

Costs

C. Martin also seeks “court costs of $2,527.80 incurred by Fidelity in this lawsuit
to recover that [$290,900.00] amount” (doc. 126, p. 7). C. Martin does not specifically
state the ground upon which it claims the amount and the Court finds no provision in
the Factoring Agreement which provides for the award.2 Accordingly, the Court

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Paragraph 3(w) of the Factoring Agreement provides for attorney’s fees incurred
“[s]hould it become necessary for Factor to enforce Vendor’s Repurchase Obligation through
the use of an attorney,” and provides for reasonable attorney’s fees and expenses related to the
sale of collateral (doc. 116, p. 140). In the present motion, however, C. Martin, seeks court
costs rather than attorney’s fees and it has clarified that it does not seek to enforce the
Repurchase Obligation as provided by the Factoring Agreement.

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construes the motion insofar as it seeks costs incurred by Fidelity as a motion asserted
pursuant to Federal Rule of Civil Procedure 54(d) rather than as a claim asserted
pursuant to a provision of the contract.
Rule 54 provides, in pertinent part:
Unless a federal statute, these rules, or a court order
provides otherwise, costs–other than attorney’s fees–should
be allowed to the prevailing party.
***
The clerk may tax costs on 14 days’ notice. On motion
served within the next 7 days, the court may review the
clerk’s action.
Fed.R.Civ.P. 54(d)(1).
The Court notes that C. Martin separately asserts a claim for “attorneys fees,
expenses and costs of court” (doc. 126, p. 12). Thus, costs incurred by Fidelity in this
litigation may be presented to the clerk in the normal course pursuant to Rule 54(d).
Accordingly, the motion by C. Martin shall be denied insofar as C. Martin seeks
summary judgment as to costs incurred by Fidelity in this litigation.

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CONCLUSION
For all of the foregoing reasons, the motion by third party defendant, John Lee
Harden, Jr., for summary judgment (doc. 129) is DENIED, and the motion by thirdparty plaintiff, C. Martin Company, Inc., for reconsideration of the Ruling of March 16,
2012 (doc. 126) is GRANTED only insofar as C. Martin seeks summary judgment
against third party defendants, Superior Logistics, L.L.C., and John Lee Harden, Jr.,
and default judgment against third party defendants, Richard G. Poore and Carlos
Johnson, for damages in the amount of $290,900.00 and DENIED insofar as C. Martin
seeks an award of $2,527.80 for costs incurred by Fidelity in this matter. The
foregoing denial, however, is without prejudice to the right of C. Martin, as the
prevailing party, to seek reasonable costs pursuant to Federal Rule of Civil Procedure
54(d).
Judgment shall issue accordingly.
Baton Rouge, Louisiana, May 4, 2012.

BRIAN A. JACKSON
UNITED STATES DISTRICT JUDGE
MIDDLE DISTRICT OF LOUISIANA

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