SE Property Holdings, LLC v. Unified Recovery Group, LLC et al

Filing 56

RULING granting 46 Motion for Summary Judgment. Signed by Judge James J. Brady on 04/02/2013. (CGP)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
SE PROPERTY HOLDINGS, LLC
CIVIL ACTION
VERSUS
NO. 12-231-JJB
UNIFIED RECOVERY GROUP, LLC, ET AL.
RULING ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on a Motion for Summary Judgment (Doc. 46) by
the Plaintiff, SE Property Holdings, LLC (“SEPH”). The Motion is opposed (Doc. 52) by
all Defendants: United Recovery Group, LLC (“URG”), IED, LLC (“IED”), International
Equipment Distributors, Inc. (“International Equipment”), Green and Sons II, LLC,
Catahoula Trading Company, LLC (“CTC”), Memory C. Green, Cecile G. Green, Jeff S.
Green, and J.S. Lawrence Green. SEPH has filed a reply (Doc. 53). The Court has
jurisdiction pursuant Title 28 of the United States Code, Section 1332. Oral argument is
not necessary.
I.
SEPH is the successor in interest by merger to the rights of Vision Bank, a
Florida corporation, which extended loans to URG, IED, and International Equipment,
and in whose favor guaranties and additional security interests were granted. From
January 2007, through October 2011, Vision made six loans to IED, International
Equipment, and URG that are at issue.

IED signed a promissory note for

$7,600,000.00, of which it now owes $188,632.01 in principal, and $20,988.14 in
interest as of November 5, 2012, with interest thereafter accruing at a rate of 18.00%
until paid, plus late charges, attorneys’ fees, and other collection costs. International
Equipment signed a promissory note for $4,500,000.00 (“International Equipment Note
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1”), of which it now owes $4,491,331.99 in principal, and $567,093.14 in interest as of
November 5, 2012, with interest thereafter accruing at a rate of 18.00% until paid, plus
late charges, attorneys’ fees, and other collection costs. International Equipment signed
a promissory note for $200,000 (“International Equipment Note 2”), of which it now owes
$16,666.85 in principal, and $1,027.34 in interest as of November 5, 2012, with interest
thereafter accruing at the rate of 8.00% until paid, plus late charges, attorneys’ fees,
and other collection costs. URG signed a promissory note for $12,250,000.00 (“URG
Note 1”), of which it now owes $12,250,000.00 in principal, and $1,352,582.63 in
interest as of November 5, 2012, with interest thereafter accruing at the rate of 18.00%
until paid, plus late charges, attorneys’ fees, and other collection costs. URG signed a
promissory note for $4,000,000.00 (“URG Note 2”), of which it now owes $3,999,291.47
in principal, and $504,966.20 in interest as of November 5, 2012, with interest thereafter
accruing at the rate of 18.00% until paid, plus late charges, attorneys’ fees, and other
collection costs. URG signed a promissory note for $2,681,000.00 (“URG Note 3”), of
which it now owes $2,680,999.99 in principal, and $338,059.74 in interest as of
November 5, 2012, with interest thereafter accruing at a rate of 18.00% until paid, plus
late charges, attorneys’ fees, and other collection costs. The total amount of principal
and interest due on the six loans as of November 5, 2012 is $26,411,639.50. The
Defendants admit the notes have matured and that the loans have not been paid in full.
Each note was guaranteed, through the signing of guaranty agreements, by more
than one of the Defendants. All Defendants signed guaranty agreements except CTC
and Green and Sons.

URG, IED, and International Equipment each individually

executed security agreements with Vision granting Vision security interests in certain

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collateral.

The International Equipment Security Agreement, dated July 11, 2010,

granted Vision a security interest in “any property of mine, whether I own it now or in the
future, which is in your possession,” and “UCC ON ALL BUSINESS ASSETS, A/R
FILED AT DOCUMENT NO. 05-0137837.” Doc. 47-4, at 84. UCC financing statements
were filed and recorded in order to perfect the security interests.
CTC, J.S. Lawrence Green and Memory Green, and Jeff S. Green and Cecile G.
Green also executed mortgages relevant to securing of the indebtedness at issue. The
Multiple Indebtedness Mortgage made by J.S. Lawrence Green and Memory C. Green,
collectively as mortgagor, dated October 18, 2011 and recorded with the Clerk of Court
and Recorder or Mortgages of East Baton Rouge Parish, Louisiana on October 19,
2011 at Original 725, Bundle 12362, secures all present and future indebtedness of
URG, IED, and International Equipment to SEPH. The Multiple Indebtedness Mortgage
made by Jeff S. Green and Cecile G. Green, collectively as mortgagor, dated October
18, 2011 and recorded with the Clerk of Court of Washington parish, Louisiana on
October 25, 2011 as File Number 2011-004949 at Book 933, Page 33, secures all
present and future indebtedness of URG, IED, and International Equipment to SEPH.
IED granted a Pledge and Security Agreement in favor of Vision on August 29,
2008, pledging as collateral security, among other things,
a continuing interest and lien on all of its right, title and interest in and to
all of . . . (1) [IED]’s current and future ownership interests in JKS-URG
Management Co., L.L.C., a Louisiana limited liability company (the
“Company”) together with any certificates now or hereafter issued
representing or evidencing such interests, including without limitation the
interests currently evidenced by that certain Membership Certificate
described in Schedule I attached hereto (collectively, the “Membership
Certificate”), evidencing a one-third (1/3) membership interest in the
Company (collectively, the “LLC Interests”); (2) all other and additional
interests in the Company hereafter acquired by [IED] in any manner,
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including, without limitation, as distributions or otherwise, or shares,
limited liability company interests, partnership or limited partnership
interests, or other interests or rights or properties received as a result of
any merger, consolidation, exchange, or similar transaction involving the
Company, and all certificates representing all such shares; (3) all cash,
property, liquidation and other dividends now or hereafter declared on the
LLC Interests, and all redemption payments and all other monies due or to
become due thereunder; (4) all securities entitlements, warrants, options,
preemptive rights, rights of first refusal and other rights to subscribe to,
purchase or receive any limited liability ownership interest, shares of
common stock or other securities now or hereafter incident or existing or
declared or granted in connection with such LLC Interests or otherwise;
(5) all distributions (whether made in cash, money, instruments, income or
other property) received or receivable or otherwise made in connection
with the LLC Interests or incident thereto; and (6) all proceeds of all or any
of the foregoing, in whatever form, including without limitation, all
“proceeds” as such term is defined in Chapter 9 of the Louisiana
Commercial Laws, La. R.S. 10:9-101, et seq. (hereafter the “UCC”), of any
of the foregoing, and all proceeds of such proceeds (the items referred to
in clauses (1) through (6) being collectively called the “Collateral”).
Doc. 48, at 97–98.
Two life insurance policies were also assigned, transferred and set over to Vision
as collateral on October 18, 2011.

They are American General Policy No.

MMM0288849, with J.S. Lawrence Green as policyowner and insured, and TIAACref
Policy No. 0604095, with Jeff S. Green as policyowner and insured. Doc. 48, at 118–
19, 121–22.
All parties signed a CROSS-DEFAULT, CROSS-COLLATERALIZATION AND
MODIFICATION AGREEMENT (“the CD Agreement”) involving the loans.

The CD

Agreement provides in pertinent part:
This Cross-Default, Cross-Collateralization and Modification
Agreement (this “Agreement”) is made as of the 18th day of October 2011
by and among Vision Bank (“Lender”), Unified Recovery Group, LLC
(“URG”), International Equipment Distributors, Inc. (“INTED”), Green &
Sons II, LLC (“G&S”) and IED, LLC (“IED”) (collectively, URG, INTED,
G&S and IED are known as the “Borrowers”, each individually being a
“Borrower”), J.S. Lawrence Green and Memory C. Green (collectively,
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“LGreen”), Catahoula Trading Company, LLC (“CTC”) and Jeff S.
Green and Cecile G. Green (collectively, “JGreen”) (collectively, LGreen,
JGreen, INTED and IED are known as the “Guarantors”, each individually
being a “Guarantor”).
***
C.
The Guarantors, CTC and each of the Borrowers will receive
a direct and material benefit from the making of the loans to Borrowers
(URG, INTED, IED and G&S). Lender is willing to make the Loans to
URG, INTED, IED and G&S only if Borrowers, Guarantors and CTC each
agree to be jointly, severally and solidarily liable for all of the Indebtedness
of all Borrowers.
***
2.
Joint, Several and Solidary Liability; Integration of
Obligations.
(a)

Notwithstanding anything to the contrary in this
Agreement, any Mortgage or any Loan Documents,
each Borrower, CTC and each Guarantor shall pay
the Indebtedness of the Borrowers, as and when due.
Accordingly, the Indebtedness of the Borrowers shall
be the joint, several and solidary obligation of each
Borrower, CTC and each Guarantor.

(b)

While each Loan represents a separate and
independent obligation of the Borrower, each
Borrower, CTC and each Guarantor acknowledges
that, in requesting Lender to make the Loans, they
intend that the Mortgaged Properties secure to
Lender the payment and performance of all of the
combined Obligations.

Accordingly, if any Borrower fails to pay fully, when due, any
Indebtedness payable to Lender or under any Loan Document, then
Lender may elect, in its discretion, to treat that amount as being due and
owing by the Borrowers, CTC or Guarantors, on a joint, several and
solidary basis; may enforce its rights and remedies against and collect
such amounts from Borrowers, CTC or Guarantors on a joint, several and
solidary basis; and may recover such amounts from the value of each of
the Mortgaged Properties and other collateral set forth in the Loan
Documents, on a pro rata basis or otherwise, as determined by lender in
its sole and uncontrolled discretion.
***
7.
Representations of each Borrower, CTC and each
Guarantor. Each Borrower, CTC and each Guarantor represents to
Lender that it:

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(c)

believes that it has received adequate consideration
for the Combined Obligations assumed under this
Agreement.
***
12.
Lender’s Rights. Each Borrower, CTC and Guarantor
agrees that Lender may, without demand and at any time and from time to
time and without the consent of, or notice to, Borrower, CTC or Guarantor,
without incurring responsibility to Borrower, CTC or Guarantor, and
without impairing or releasing the Combined Obligations, upon or without
any terms or conditions and in whole or in part:
***
(b)
take and hold security for the payment of the
Indebtedness or Combined Obligations and sell,
exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order
any property pledged or mortgaged to secure such
Indebtedness or Combined Obligations;
***
(f)
apply any sums realized to any liability or liabilities of
any other Borrower, CTC or Guarantor to Lender
regardless of what liability or liabilities of Borrower,
CTC or Guarantor remain unpaid to Lender
***
13.
Waiver of Presentment, Marshalling, Certain Suretyship
Defenses, etc.
***
(b)
Notwithstanding the existence of any other security
interests in any Mortgaged Property held by Lender or
by any other party, Lender shall have the right to
determine in its sole and uncontrolled discretion the
order in which any or all of the Mortgaged Properties
or portions of any of the Mortgaged Properties shall
be subjected to the remedies provided in this
Agreement and the Loan Documents or applicable
law. Lender shall have the right to determine in its
sole and uncontrolled discretion the order in which
any or all portions of the Combined Obligations are
satisfied from the proceeds realized upon the exercise
of such remedies.
***
23.
Entire Agreement. This Agreement, together with the Note,
Mortgage and Loan Documents, contains the entire agreement among the
parties as to the rights granted and the obligations assumed in this
Agreement.
***

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28.
No Party Deemed Drafter. No party shall be deemed the
drafter of this Agreement, and this Agreement shall not be construed
against either party as the drafter of the Agreement.
Doc. 47-4, at 2–10.
II.
The Defendants, in their opposition, request an additional ninety days to conduct
limited discovery. Subsequent to the filing of the instant motion, the Defendants filed a
motion to extend discovery deadline (Doc. 54), which was denied (Doc. 55). For the
same reasons articulated in the ruling denying the motion to extend discovery deadline,
the Defendants’ request is denied.
III.
Summary judgment is appropriate when “the movant shows that there is no
genuine dispute as to any material fact.” Fed. Rule Civ. P. 56(a). The party seeking
summary judgment carries the burden of demonstrating that there is an absence of
evidence to support the non-moving party’s case. Celotex Corp. v. Catrett, 477 U.S.
317, 325 (1986). A party must support its summary judgment position by “citing to
particular parts of materials in the record” or “showing that the materials cited do not
establish the absence or presence of a genuine dispute.” Fed. Rule Civ. P. 56(c)(1).
Although the Court considers evidence in a light most favorable to the nonmoving party, the non-moving party must show that there is a genuine issue for trial.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986). Conclusory allegations
and unsubstantiated assertions will not satisfy the non-moving party’s burden. Grimes
v. Tex. Dep’t of Mental Health, 102 F.3d 137, 139–40 (5th Cir. 1996).

Similarly,

“[u]nsworn pleadings, memoranda or the like are not, of course, competent summary

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judgment evidence.” Larry v. White, 929 F.2d 206, 211 n.12 (5th Cir. 1991). If, once
the non-moving party has been given the opportunity to raise a genuine fact issue, no
reasonable juror could find for the non-moving party, summary judgment will be granted
for the moving party. Celotex, 477 U.S. at 322. “[A] district court may properly grant
summary judgment when a contract is unambiguous . . . .” S. Natural Gas Co. v. Pursue
Energy, 781 F.2d 1079, 1081 (5th Cir. 1986).
IV.
SEPH argues summary judgment is appropriate since no genuine issues of
material fact exist as to the following. The Borrowers are in default under the Notes as
evidenced by the Affidavit of Brett Baumeister (“the Affidavit”), SEPH Vice President,
the terms of the Notes, and the admissions of the Borrowers. SEPH is the successor in
interest of Vision Bank by virtue of the merger of these two entities in February of 2012.
SEPH is also the holder of the Notes, which the Borrowers admit have not been paid in
full. Therefore, SEPH is entitled to judgment for the remaining balance on the Notes
and all the associated security interests attached thereto. In addition, the Affidavit and
the terms of the Guaranties confirm that the Guarantors are solidarily liable for all
unpaid amounts due under the Notes. In their answer, the Borrowers have admitted
that they signed and executed the Notes and that they executed the Guaranties. It is
undisputed that the Borrowers signed the aforementioned Notes, that the Notes are
matured and have not been paid in full, and that the Borrowers and Guarantors
executed multiple guaranty agreements, security agreements, and mortgages in favor of
SEPH as security for the Notes.

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SEPH requests that the Court recognize and maintain: (1) SEPH’s right to
enforce and collect the Notes and rendering judgment against the Borrowers on a joint
and several and solidary basis in the principal amount of $23,626,922.31. Further,
SEPH requests $2,784,717.10 in interest is due as of November 5, 2012, together with
interest accruing at the specified rate of various loans from such day until paid, late
charges, all court costs incurred in this proceeding, plus reasonable attorneys’ fees; (2)
the Security Interests granted by the Security Documents as security for all obligations
of the Defendants hereunder; (3) the rights of SEPH to enforce the Guaranties as
security for all remaining obligations of the Borrowers hereunder; (4) the rights of SEPH
under the Catahoula Trading Mortgage, J.S. Lawrence Green Mortgage, and the Jeff
Green Mortgage as security for all obligations of the Borrowers hereunder; (5) that the
Security Interests granted by International Equipment Distributors, Inc. include accounts
receivable owed by Livingston Parish as addressed in the Livingston Suit as security for
all obligations of the Borrowers hereunder; (6) the rights of SEPH under the Equity
Pledge as security for all obligations of the Defendants hereunder; (7) the rights of
SEPH under the Insurance Policies as Collateral for all obligations of the Defendants
hereunder; (8) that all costs, expenses, charges and reasonable attorneys’ fees incurred
in connection with these proceedings be awarded to SEPH.
The Defendants do not dispute the majority of SEPH’s arguments. They argue
Green and Sons is not a guarantor for any indebtedness owed to SEPH, other than its
own. They also argue CTC entered into the CD Agreement only to provide additional
collateral in the form of a Multiple Indebtedness Mortgage on a property it owns near
Houma, Louisiana, and that CTC is not a guarantor for any of the indebtedness owed to

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SEPH. The Defendants argue CTC’s liability, if any, is limited to the in rem value of the
Houma property.
The Defendants further argue that the CD Agreement is vague, ambiguous, and
sometimes contradictory. They argue SEPH has not provided a consistent statement of
which Defendants are “Borrowers” or “Guarantors” as referenced in the CD agreement,
nor has it stated exactly which documents evidence the guaranties and exact nature
and extent of the guaranties by any guarantors. The Defendants argue the ambiguities
and uncertainties within the CD Agreement call for the Court to look to parole evidence
to determine the common intent of the parties to the CD Agreement. The Defendants
finally argue the CD Agreement and all documents pertaining to the closing that took
place between SEPH and the Defendants were drafted solely by SEPH, and at no time
did any attorney for any of the Defendants participate in the drafting of the CD
Agreement or any of the documents executed on October 18, 2011, so the doubtful and
ambiguous provisions should be construed against SEPH.
“Interpretation of a contract is the determination of the common intent of the
parties.” La. Civ. Code art. 2045. “When the words of a contract are clear and explicit
and lead to no absurd consequences, no further interpretation may be made in search
of the parties' intent.” La. Civ. Code art. 2046. The words of the CD Agreement are
clear and explicit as to which Defendants are “Borrowers” and which Defendants are
“Guarantors.” The CD Agreement explicitly states that “collectively, URG, INTED, G&S
and IED are known as the ‘Borrowers’, each individually being a ‘Borrower.’” INTED is
defined in the same paragraph as International Equipment Distributors, Inc. The CD
Agreement explicitly states that “collectively, LGreen, JGreen, INTED and IED are

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known as the ‘Guarantors’, each individually being a ‘Guarantor.’” “LGreen” is defined
in the same paragraph as J.S. Lawrence Green and Memory C. Green. “JGreen” is
defined in the same paragraph as Jeff S. Green and Cecile G. Green.
The words of the CD Agreement are clear and explicit that Green and Sons’
liability is joint, several, and solidary. Green and Sons is a “Borrower” as defined by the
CD Agreement. The CD Agreement provides: “[l]ender is willing to make the Loans to
URG, INTED, IED and G&S only if Borrowers, Guarantors, and CTC each agree to be
jointly, severally and solidarily liable for all of the Indebtedness of all Borrowers”; “the
Indebtedness of the Borrowers shall be the joint, several and solidary obligation of each
Borrower, CTC and each Guarantor”; “each Borrower, CTC and each Guarantor
acknowledges that, in requesting Lender to make the Loans, they intend that the
Mortgaged Properties secure to Lender the payment and performance of all of the
combined Obligations”; and “if any Borrower fails to pay fully, when due, any
Indebtedness payable to Lender or under any Loan Document, then Lender may elect,
in its discretion, to treat that amount as being due and owing by the Borrowers, CTC or
Guarantors, on a joint, several and solidary basis; may enforce its rights and remedies
against and collect such amounts from Borrowers, CTC or Guarantors on a joint,
several and solidary basis; and may recover such amounts from the value of each of the
Mortgaged Properties and other collateral set forth in the Loan Documents, on a pro
rata basis or otherwise, as determined by lender in its sole and uncontrolled discretion.”
These words clearly and explicitly provide that Green and Sons, as a Borrower, is
jointly, severally, and solidarily liable to SEPH for the entire indebtedness of the
Defendants under the six notes.

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The aforementioned words in the CD Agreement also clearly and explicitly
provide that Catahoula Trading Company, abbreviated in the CD Agreement as “CTC,”
is jointly, severally, and solidarily liable to SEPH for the entire indebtedness of the
Defendants under the six notes.
Despite the fact that SEPH presents twenty-seven documents as evidence of the
guaranties without specifically pointing to certain language in the documents, the nature
and extent of the guaranties by guarantor is clear. The words of the CD Agreement
clearly and explicitly provide that J.S. Lawrence Green and Memory C. Green, Jeff S.
Green and Cecile G. Green, International Equipment (abbreviated in the CD Agreement
as “INTED”), and IED are known as the “Guarantors”, each individually being a
“Guarantor.” The language referenced above to determine Green and Sons and CTC
are jointly, severally, and solidarily liable to SEPH for the entire indebtedness of the
Defendants under the six notes similarly provides, clearly and explicitly, that the
Guarantors are jointly, severally, and solidarily liable to SEPH for the entire
indebtedness of the Defendants under the six notes.
The words of the CD Agreement are clear and explicit and the decisions reached
above are not absurd consequences.

Therefore, the Court cannot look to parole

evidence, and the absence of ambiguities, uncertainty, vagueness, and doubt in the
portions of the CD Agreement the Court is pointed to leave no provisions for the Court
to construe against the drafter.1

1

The Court therefore does not reach SEPH’s argument that the CD Agreement provides for no party to
be deemed drafter.

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V.
Accordingly, the Plaintiff’s Motion for Summary Judgment (Doc. 46) is
GRANTED.
IT IS HEREBY ORDERED that United Recovery Group, LLC, IED, and
International Equipment Distributors, Inc. are liable to SE Property Holdings, LLC in the
principal amount of $23,626,922.31 and in the interest amount of $2,784,717.10, with
interest accruing at the specified rate of the loans until paid, late charges, and
reasonable attorneys’ fees. All Defendants are jointly, severally, and solidarily liable for
these monetary amounts, and SE Property Holdings, LLC may enforce its rights under
the security agreements, guaranty agreements, mortgages, the Pledge and Security
Agreement, and life insurance policies as provided by those documents.
Signed in Baton Rouge, Louisiana, on April 2, 2013.





JAMES J. BRADY, DISTRICT JUDGE

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