PNC Bank, National Association, successor by merger to National City Bank, a national banking association v. Legal Advocacy, P.C. et al
Filing
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OPINION and ORDER Denying Defendants' 18 MOTION for Summary Judgment, and Plaintiff's 20 MOTION for Summary Judgment (Answers due by 12/26/2017). Signed by District Judge Linda V. Parker. (RLou)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PNC BANK, National Association,
successor by merger to National City Bank,
a national banking association,
Plaintiff,
Civil Case No. 16-cv-13258
Honorable Linda V. Parker
v.
LEGAL ADVOCACY, P.C., a Michigan
Professional Corporation, f/k/a
NORMAN YATOOMA & ASSOCIATES, P.C.
and NORMAN YATOOMA,
Defendants.
________________________________/
OPINION AND ORDER DENYING DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT [ECF No. 18] AND PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT [ECF No. 20]
On September 9, 2016, Plaintiff PNC Bank commenced this lawsuit alleging
a breach of promissory note and breach of the guaranty against Defendant Legal
Advocacy, P.C., f/k/a Norman Yatooma & Associates, P.C. and Defendant Norman
A. Yatooma (collectively “Defendants”). (ECF No. 1.) Presently before the Court
are the parties’ cross motions for summary judgment filed April 18, 2017 and May
12, 2017, respectively. (ECF Nos. 18 & 20.) The motions have been fully briefed.
Finding the facts and legal arguments sufficiently presented in the parties’ briefs, the
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Court dispensed with oral argument pursuant to Eastern District of Michigan Local
Rule 7.1(f). For the reasons that follow, the Court denies the parties’ cross-motions
for summary judgment.
I.
Factual and Procedural Background
On August 27, 2008, Plaintiff extended credit to Defendant Legal Advocacy
in the amount of $ 1,500,000, which was executed by a Promissory Note and secured
with a Commercial Guaranty. (ECF No. 1 at Pg ID 3-4, 9-10, 18-21.) Defendant
Yatooma executed the Commercial Guaranty and agreed to be financially
responsible for the indebtedness of Defendant Legal Advocacy. (ECF No. 1 at Pg
ID 4, 18-21.) The Note provided that payment would be due upon demand. (ECF
No 1 at Pg ID 9.)
In response to a conversation on April 27, 2010 with Defendant regarding his
refusal to sign new commercial loan documentation, Plaintiff sent Defendants a
demand letter on April 30, 2010. (ECF No. 1 at Pg ID 3, 12-13.) The letter sought
full payment of the debt no later than June 30, 2010. (Id.) Having received no
payment by June 30, 2010, on August 9, 2010, Plaintiff sent Defendants a second
demand letter. (ECF No. 1 at Pg ID 3, 15.) On September 27, 2010 and October
28, 2010, Defendant Legal Advocacy wrote Plaintiff two separate checks in the
amounts of $3,550.37 and $3,435.85.
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On September 9, 2016, Plaintiff instituted this action. As of the filing of the
Complaint, Defendants owed a principal balance of $1,499,276.36, accrued interest
in the amount of $249,203.12, and late fees in the amount of $12,335.22, totaling
$1,759,814.70. (ECF No. 1 at Pg ID 4.) In response, Defendants filed a motion
for summary judgment claiming Plaintiff’s claims are barred by the statute of
limitations. (ECF No. 18.) Plaintiff filed a cross-motion for summary judgment
arguing Defendants breached their contractual obligation and its claim was revived,
at the latest, when Defendant Legal Advocacy made a payment on October 28, 2010.
(ECF No. 20.)
II.
Summary Judgment Standard
Summary judgment pursuant to Federal Rule of Civil Procedure 56 is
appropriate “if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The central inquiry 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.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52 (1986). After adequate time for discovery and upon motion, Rule 56
mandates summary judgment against a party who fails to establish the existence of
an element essential to that party’s case and on which that party bears the burden of
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proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The movant has the initial burden of showing “the absence of a genuine issue
of material fact.” Id. at 323. Once the movant meets this burden, the “nonmoving
party must come forward with specific facts showing that there is a genuine issue for
trial.” Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986) (internal quotation marks and citation omitted). To demonstrate a genuine
issue, the nonmoving party must present sufficient evidence upon which a jury could
reasonably find for that party; a “scintilla of evidence” is insufficient. See Liberty
Lobby, 477 U.S. at 252.
“A party asserting that a fact cannot be or is genuinely disputed” must
designate specifically the materials in the record supporting the assertion, “including
depositions, documents, electronically stored information, affidavits or declarations,
stipulations, admissions, interrogatory answers, or other materials.” Fed. R. Civ. P.
56(c)(1). The court must accept as true the non-movant’s evidence and draw “all
justifiable inferences” in the non-movant’s favor. See Liberty Lobby, 477 U.S. at
255.
III.
Applicable Law & Analysis
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Under Michigan law, the statute of limitations for a breach of contract claim is
six years. See Mich. Comp. Laws § 600.5807(8). However, a partial payment on a
loan will restart the running of the limitations period. See Yeiter v. Knights of St.
Casimir Aid Soc’y, 461 Mich. 493, 497 (Mich. 2000) (“A partial payment made on a
debt after the debt matures serves to revive the statute of limitations. A new cause
of action accrues on the date of payment.”); Buchanan v. Northland Group, 776 F.3d
393, 396 (6th Cir. 2015) (partial payments on a time-barred debt restarts the statute
of limitations under Michigan law); Fed. Deposit Ins. Corp. v. Garbutt, 142 Mich.
App. 462, 468 (Mich. Ct. App. 1985) (“An action on a promissory note is subject to
the six-year statutory limitation period governing breach of contract actions . . .”).
However, the debt must be “accompanied by a declaration or circumstance that
rebuts the implication that the debtor by partial payment admits the full obligation.”
Yeiter, 461 Mich. at 497 n.6; see also Charbonneau v. Mary Jane Elliott, P.C., 611
F. Supp. 2d 736, 741 (E.D. Mich. 2009). Moreover, “[a] qualification must be
made at the time of the partial payment. If this were not true, it would be possible
for one to make a partial payment and intend to pay the balance at a later date, but in
the interim, change his mind and effectively [renege].” Bonga v. Bloomer, 14
Mich. App. 315, 319 (Mich. Ct. App. 1968).
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In their motion for summary judgment, Defendants claim Plaintiff’s suit is
barred by the six-year statute of limitations, which began to accrue on either April
30, 2010, the date of default/demand, or June 30, 2010, the date payment was
expected to be paid in full. To the contrary, Plaintiff argues that the statute of
limitations was revived because Defendant Legal Advocacy made two partial
payments on September 27, 2010 and October 28, 2010. Under Michigan law,
Plaintiff’s position would be correct assuming the September and October payments
were, in fact, partial payments and unaccompanied by a declaration rebutting full
obligation to the debt. See Yeiter, 461 Mich. at 497; Buchanan, 776 F.3d at 396;
Fed. Deposit Ins. Corp. v. Garbutt, 142 Mich. App. at 468. However, whether the
two payments were made to advance settlement negotiations or were a new promise
to pay is a disputed fact. Notably, Defendants concede in their response to
Plaintiff’s motion for summary judgment that the nature of the two payments is a
disputed fact and cannot be decided without the benefit of discovery. (ECF No. 22
at Pg ID 341.) The Court agrees. Depending on the nature of the two payments,
Plaintiff’s Complaint may be time-barred. Neither party has provided the Court
with any evidence to support their claims regarding the two payments. It appears
from the record that the parties have not engaged in discovery, and, under the facts
of this case, without the benefit of depositions and other discoverable materials to
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bolster their claims, the parties’ motions are premature. Therefore, the Court
denies the parties’ motions for summary judgment.
Furthermore, the Court denies Defendants’ motion for summary judgment as
to Defendant Yatooma. It is undisputed that the Commercial Guaranty stated:
Guarantor also waives any and all rights or defenses based on
suretyship or impairment of collateral including, but not limited to, any
rights or defenses arising by reason of . . . (E) any statute of limitations,
if at any time any action or suit brought by Lender against Guarantor is
commenced, there is outstanding indebtedness which is not barred by
any applicable statute of limitations . . . .
(ECF No. 1 at Pg ID 19.) Here, the factual circumstances surrounding the statute of
limitations is in dispute, and the Court is unable to determine if Defendant Yatooma
should be dismissed. Therefore, the Court declines to grant Defendants’ motion as
to Defendant Yatooma.
IV.
Conclusion
Accordingly,
IT IS ORDERED that Defendants’ motion for summary judgment (ECF No.
18) is DENIED, and Plaintiff’s motion for summary judgment (ECF No. 20) is
DENIED.
IT IS FURTHER ORDERED that Defendants shall file an Answer to the
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Complaint within 14 days of this Order.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: December 12, 2017
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, December 12, 2017, by electronic and/or
U.S. First Class mail.
s/ Richard Loury
Case Manager
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