Comerica Bank v. Esshaki et al
ORDER granting 18 plaintiff's Motion for Summary Judgment. Signed by District Judge George Caram Steeh. (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
CASE NO. 17-CV-11016
HON. GEORGE CARAM STEEH
JAMES ESSHAKI, individually
and as Trustee of the JAMES
ESSHAKI LIVING TRUST
dated April 25, 1991, as
amended and restated,
PETER SHAMAN, an
individual, and PETER
SHAMAN, M.D. P.C., jointly
ORDER GRANTING PLAINTIFF’S MOTION
FOR SUMMARY JUDGMENT (Doc. 18)
Plaintiff Comerica Bank (“Comerica”) brought this breach of contract
action for failure to repay an Installment Note against defendants James
Esshaki, James Esshaki Living Trust dated April 25, 1991 (“Trust”), Peter
Shaman, and Peter Shaman, M.D. P.C. (“Shaman P.C.”) (collectively
“defendants.”). Plaintiff alleges that defendants owe $344,558.62 plus
interest, late fees, costs and attorney fees. Defendants oppose the motion
on the grounds that discovery has just begun. Upon review of the parties’
written submissions, the court determines that no oral argument is
necessary pursuant to Local Rule 7.1(f)(2). For the reasons set forth
below, Comerica’s motion shall be granted.
Comerica loaned money to defendant Peter Shaman under the terms
of an Installment Note, and the debt was guaranteed by Shaman, Shaman
P.C., Esshaki, and the Trust (collectively “Guarantors”). In their Answer,
defendants admit to same. Under the Note, Shaman agreed to pay
Comerica $437,382.91 payable in monthly installments of $2,650.45
beginning on June 1, 2011, and continuing until the maturity date of
September 15, 2011 when the entire unpaid balance of principal, interest
and other sums was due and payable in full. According to the Complaint,
defendants failed to pay the indebtedness on the Note when due. Under
the terms of the Note, Comerica’s record of outstanding debt is “conclusive
evidence thereof” and the burden is on defendants to prove that the loan
history suffers from “manifest error.” (Doc. 18, Ex. A at 1).
In their Answer, defendants admit that the Note was not fully paid at
maturity on September 15, 2011. (Doc. 11 at Para. 12). When defendants
failed to repay the debt, the parties agreed to a new payment schedule in a
Forbearance Agreement executed on June 19, 2012, which was extended
three times, under which Comerica agreed to forbear from collection for a
period of time. Under the original Forbearance Agreement, Comerica
agreed to forbear from collection until September 15, 2012. The First
Amended Forbearance Agreement extended Comerica’s forbearance to
January 15, 2013, the Second Amended Forbearance Agreement extended
Comerica’s forbearance to June 30, 2015, and the Third Amended
Forbearance Agreement extended Comerica’s forbearance to July 1, 2017.
Comerica alleges that defendants stopped making payments in May, 2016.
In their Answer, defendants admit that they did not make all the required
payments under the Third Amended Forbearance Agreement. (Doc. 11 at
As part of the Forbearance Agreement and in its subsequent
amendments, defendants acknowledged that they were in default on the
Note. (Doc. 18, Ex. E, F, G, H). Specifically, the Forbearance Agreement
provides: “The Maturity Date of the Note is September 15, 2011, and the
Note has not been paid. This is a default under the Note and Loan
Documents. The full amount of the Note is and remains immediately
payable in full.” (Doc. 18, Ex. E at 1). On January 15, 2016, as
consideration for forbearance, each defendant explicitly “acknowledge[d]
the Liabilities as set out in the [Note], . . .the existence of the default, and
that the Liabilities are immediately due and payable.” (Doc. 18, Ex. H at 1).
On January 31, 2017, Comerica notified defendants of their defaults under
the Note, the Forbearance Agreement and subsequent amendments,
terminating the term of forbearance and demanding full payment. In their
Answer, defendants admit that they executed the Forbearance Agreement
and its three subsequent extensions, and admit that they failed to make all
the monthly payments. (Doc. 11 at Para. 13-17). Comerica filed this
lawsuit on March 30, 2017. The discovery cut-off date is January 31, 2018.
Comerica filed its motion for summary judgment on July 25, 2017. In
support of its motion for summary judgment, Comerica relies on the
affidavit of Sarah Miller, Vice President of the Special Assets Group for
Comerica who avers that as of July 17, 2017, defendants owe the sum of
$344,558.62 in principal, plus accrued interest in the amount of $21,325.93,
plus $1,779.09 in late fees, costs, and attorney fees.
II. Standard of Law
Federal Rule of Civil Procedure 56(c) empowers the court to render
summary judgment "forthwith if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law." See Redding v. St.
Eward, 241 F.3d 530, 532 (6th Cir. 2001). The Supreme Court has
affirmed the court's use of summary judgment as an integral part of the fair
and efficient administration of justice. The procedure is not a disfavored
procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986);
see also Cox v. Kentucky Dep’t of Transp., 53 F.3d 146, 149 (6th Cir.
The standard for determining whether summary judgment is
appropriate is "'whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that one party
must prevail as a matter of law.'" Amway Distributors Benefits Ass’n v.
Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The evidence and all
reasonable inferences must be construed in the light most favorable to the
non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). "[T]he
mere existence of some alleged factual dispute between the parties will not
defeat an otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact." Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original);
see also National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907
(6th Cir. 2001).
If the movant establishes by use of the material specified in Rule
56(c) that th If the movant establishes by use of the material specified in
Rule 56(c) that there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law, the opposing party must come
forward with "specific facts showing that there is a genuine issue for trial."
First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also
McLean v. 988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere
allegations or denials in the non-movant's pleadings will not meet this
burden, nor will a mere scintilla of evidence supporting the non-moving
party. Anderson, 477 U.S. at 248, 252. Rather, there must be evidence on
which a jury could reasonably find for the non-movant. McLean, 224 F.3d
at 800 (citing Anderson, 477 U.S. at 252).
Loan Documents Enforceable
There is no genuine issue of material fact that the loan documents
are enforceable. Under Michigan law, promissory notes and guarantees
are “to be construed as ordinary contracts.” 31800 Wick Road Holdings,
LLC v. Future Lodging-Airport, Inc., 848 F. Supp. 2d 757, 763 (E.D. Mich.
2012) (citing Collateral Liquidation, Inc. v. Renshaw, 301 Mich. 437, 443
(1942)). The guarantees are enforceable because a “promise to answer for
the debt, default, or misdoings of another person” need only be a
“memorandum of the agreement . . . in writing and signed with an
authorized signature by the party to be charged with the agreement.” MCL
Sec. 566.132(1)(b). Defendants have admitted to execution of the Loan
Documents in their Answer. (Doc. 11 at Para. 8-11, 13-16). Given these
admissions, the Loan Documents are enforceable, and the court addresses
the question of whether defendants are in default.
Comerica seeks summary judgment because there is no genuine
issue of material fact that defendants have defaulted. The Note required
that the “entire unpaid balance of principal, interest and all other sums” be
paid upon the Maturity Date. (Doc. 18 at Ex. A at 1). Failure to make
payments when due or upon maturity constituted default. Id. at 3. In their
Answer, defendants admit that the Note was not fully paid upon the
Maturity Date of September 15, 2011. (Doc. 11 at Para. 12).
Moreover, in consideration of each of the Forbearance Agreements,
defendants have acknowledged the existence of their default and that the
liabilities are immediately due and payable. Furthermore, in their Answer,
defendants admit that they have not made all payments required under the
Third Amended Forbearance Agreement, which under the terms of that
Agreement, amounts to default. Specifically, the Agreement provides,
“failure to make any payment required under this Agreement shall be
default under the Forbearance Agreement.” (Doc. 18, Ex. H at 2).
Defendants’ sole response to Comerica’s motion for summary
judgment is that discovery has just begun and Comerica has not yet
responded to their document requests. Comerica argues that the fact that
discovery has just begun is no defense because defendants have not
identified a material fact in dispute which would warrant discovery,
defendants have not complied with the strictures of Federal Rule of Civil
Procedure 56(d)1 as they have not filed an affidavit articulating with
requisite particularity the discovery sought, and delaying an adjudication on
the merits will allow defendants to conceal assets from Comerica, thus
rendering their debts uncollectable. In particular, Comerica asserts that it
has reason to belief that defendant James Esshaki has transferred assets
to one or more trusts that allows him to enjoy the benefit of those assets
while protecting those assets from creditors.
Defendants have not complied with the strictures of Rule 56(d) which
requires that a non-moving party claiming additional discovery is necessary
to respond to a motion for summary judgment must show “by affidavit or
declaration that, for specified reasons, it cannot present facts essential to
justify its opposition.” Here, defendants have not identified, by affidavit or
otherwise, any material issue of fact for which additional discovery is
Defendants argue Vega v. First Fed. Sav. & Loan Ass’n of Detroit, 622 F.2d
918, 926 (6th Cir. 1980) prohibits this court from ruling on a motion for
summary judgment until the parties are afforded time to conduct discovery.
Vega is distinguishable because in that case an issue of fact existed as to
Under the 2010 Amendments, Federal Rule of Civil Procedure 56(f) was
renumbered as Rule 56(d).
whether the non-moving party had improperly calculated settlement costs,
and a discovery dispute was ongoing as to whether the non-moving party
had properly refused to answer interrogatories designed to reveal how
costs were determined. By contrast, in this case, defendants have not
identified any factual issue regarding this straightforward breach of contract
case for which additional discovery is necessary.
For the same reason, defendants’ reliance on U.S. v. Var-Ken, Inc.,
1989 WL 42913, at *3, 875 F.2d 868 (6th Cir. 1989) (table only) is
misplaced as a genuine issue of material fact existed in that case as to
plaintiff’s fraud claims, and the information sought was exclusively in the
movant’s possession. Also, in that case, the government supported its
request for additional discovery to respond to defendant’s motion for
summary judgment by affidavit. Id. By contrast, in this case, defendants
have failed to identify any genuine issue of material fact for which additional
discovery is warranted, and have failed to submit an affidavit in support of
their request for additional discovery.
In Cunningham v. Osram Sylvania, Inc., 221 F. App’x 420, 423 (6th
Cir. 2007)), the Sixth Circuit explained that a court need not delay
adjudication of a summary judgment motion to afford the parties additional
time for discovery, where the non-moving party fails to submit an affidavit,
as required by Rule 56(d) (formerly Rule 56(f)), which sets forth “a
description of the information needed and an affirmative demonstration of
how the requested discovery will permit the non-moving party to rebut the
grounds alleged for summary judgment.” Id. (citing Abercrombie & Fitch
Stores, Inc. v. American Eagle Outfitters, Inc., 280 F.3d 619, 627 (6th Cir.
2002)). Defendants have failed to submit an affidavit, or even to make any
argument in their response brief, identifying the proofs they intend to
develop during discovery which would assist them in responding to
Comerica’s motion for summary judgment. The evidence is unrefuted that
Shaman executed the Note, the Guarantors guaranteed the Note, and that
The court has carefully examined defendants’ Answer and does not
find that the affirmative defenses alleged, such as a claim this court lacks
subject matter jurisdiction or that the interest rate is usurious, support a
finding that any factual issues exist over defendants’ obligation to pay the
debt owing which would warrant extending the discovery period here and
delaying adjudication of the instant motion.
Moreover, given the conclusion that defendants are in default, and
because there are concerns that defendants may be moving assets to
shield them from creditors, judgment shall enter forthwith.
Defendants agreed “to reimburse Bank . . . for any and all costs and
expenses . . . including court costs, legal expenses and reasonable
attorneys’ fees” that Comerica “incurred in collecting or attempting to collect
this Note or the Indebtedness.” (Doc. 18, Ex. A at 3). Contractual
provisions for payment of reasonable attorneys’ fees are generally
enforceable under Michigan law. Sentry Ins. A Mutual Co., v. Lardner
Elevator Co., 153 Mich. App. 317, 326 (1986). Based on the express
provision in the Note authorizing the award of attorneys’ fees incurred in
collecting the Note, Comerica is entitled to reasonable attorneys’ fees here.
For the reasons set forth above, Comerica’s motion for summary
judgment (Doc. 18) is GRANTED.
IT IS FURTHER ORDERED that defendants, jointly and severally,
owe Comerica the sum of $344,558.62 in principal, plus accrued interest in
the amount of $21,325.93 as of July 17, 2017, plus $1,779.09 in late fees,
plus costs and attorney fees. Interest continues to accrue.
IT IS SO ORDERED.
Dated: September 7, 2017
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys
of record on September 7, 2017,
by electronic and/or ordinary mail.
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