44A TRUMP INTERNATIONAL, INC. v. INCNETWORKS INC.
Filing
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OPINION. Signed by Judge Susan D. Wigenton on 2/6/14. (gmd, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
44A TRUMP INTERNATIONAL, INC.,
Civil Action No. 12-cv-2292
Plaintiff,
(SDW)
v.
INCNETWORKS INC.
OPINION
Defendant,
and ERIC MAGNELLI, ESQ.,
as escrow agent.
February 6, 2014
WIGENTON, District Judge.
Before the Court is plaintiff 44A Trump International, Inc.’s (“Plaintiff” or “44A
Trump”) motion for summary judgment (“Motion”) regarding its complaint against defendant
IncNetworks INC. (“Defendant”). 1
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(2). Venue is
proper in this District under 28 U.S.C. § 1391(b).
This Court, having considered the parties’ submissions, decides this matter without oral
argument pursuant to Federal Rule of Civil Procedure 78.
For the reasons set forth below, this Court GRANTS Plaintiff’s Motion.
1
Eric Magnelli, Esq., as escrow agent, is named as interested party in this matter.
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FACTUAL HISTORY
On or about August 9, 2001, Plaintiff alleges it loaned Jesse R. Russell (“Russell”) the
sum of $560,000.00 (“Loan”). (Compl. ¶ 10.) The Loan had a maturity date of August 15, 2002.
(Id. at ¶ 11.) On or about August 9, 2001, Russell executed a Loan Security Agreement. (Id. at ¶
12; Compl. Ex. A.) Russell secured the Loan by pledging 560,000 shares of common stock
owned by Russell and issued by the Defendant as collateral. (Id.) Russell failed to make any
payments under the Loan Security Agreement and on or about July 24, 2007, Plaintiff
commenced litigation, in federal court, against Russell for failure to make payments on the Loan.
(Compl. Ex. B ¶ 1.)
To resolve the 2007 action, Plaintiff and Defendant entered into three agreements: (a) a
Promissory Note (“Note”) executed on or about November 1, 2009 with Defendant as Maker
agreeing to pay Plaintiff the $560,000 in thirty consecutive monthly payments of $20,000 and
interest running six percent per annum; (b) a Pledge Agreement executed on or about November
1, 2009 with Defendant as Issuer and Plaintiff as Pledgee, which secured Defendant’s obligations
under the Note (specifically that Defendant would purchase 560,000 shares of stock from
Plaintiff) (“Pledged Stock”); and (c) an Escrow Agreement executed on or about November 1,
2009, where the Escrow Agent would hold the Pledge Agreement, Pledged Stock and other
collateral in escrow (“Escrow Deposit”). (See Compl. ¶ 16; Compl. Ex. C-E.) The Note outlined
that the principal and interest:
[S]hall be due and payable on the first day of each month,
commencing November 1, 2009, in thirty (30) equal consecutive
monthly payments of principal and interest equal to $20,000, and
the principal hereof, if not sooner paid as provided herein, together
with all accrued and unpaid interest, shall be due and payable on
May 1, 2012.
(Pl. Br. at 3; Compl. Ex. C, at 1.)
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Defendant made initial payments through June 2, 2010, but failed to make any payment
for July 2010. (Compl. ¶ 19; See Pl. Br. at 3.) Pursuant to the terms of the Note, Defendant had
ten days from the date payment was due to cure its failure. (See Compl. Ex. C, at 1.) Defendant
did not make the required payment by July 10, 2010. (Pl. Br. at 3.) According to the terms of
the Note, in the event of a default, Plaintiff may declare the entire remaining principal, with
accrued interest, immediately due. (See Compl. Ex. C, at 2.) In addition, the Note indicates that
there is a default rate of 12% per annum. (Compl. ¶ 18; Compl. Ex. C, at 2.) As such, Plaintiff
asserts the outstanding principal, together with accrued interest, was due as of, at least, July 12,
2010. (Compl. ¶ 20.) Defendant made certain post-default payments after July 10, 2010. (See
Pl. Br. at 4.) However, there have been no payments made since December 16, 2010. (Id.)
Plaintiff contends that as of August 1, 2013, Defendant owes $447,849.31, which is the total
amount of the unpaid principal plus accrued interest. (Id. at 5.)
On April 17, 2012, Plaintiff filed the instant complaint with this Court seeking a money
judgment including, but not limited to, $421,000 (“Complaint”). (Compl. ¶ 1.)
LEGAL STANDARD
Summary judgment shall be granted “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). A factual dispute is genuine if a reasonable jury could return a verdict for the nonmovant,
and it is material if, under the substantive law, it would affect the outcome of the suit. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party must show that if the
evidentiary material of record were reduced to admissible evidence in court, it would be
insufficient to permit the nonmoving party to carry its burden of proof. Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986).
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Once the moving party meets the initial burden, the burden then shifts to the nonmovant
who must set forth specific facts showing a genuine issue for trial and may not rest upon the
mere allegations or denials of its pleadings. Shields v. Zuccarini, 254 F.3d 476, 481 (3d Cir.
2001). The court may not weigh the evidence and determine the truth of the matter but rather
determine whether there is a genuine issue as to a material fact. Anderson, 477 U.S. at 249. In
doing so, the court must construe the facts and inferences in a light most favorable to the
nonmoving party. Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991). The
nonmoving party “must present more than just ‘bare assertions, conclusory allegations or
suspicions’ to show the existence of a genuine issue.” Podobnik v. United States Postal Serv.,
409 F.3d 584, 594 (3d Cir. 2005) (quoting Celotex Corp., 477 U.S. at 325). If the nonmoving
party “fail[s] to make a sufficient showing on an essential element of [its] case with respect to
which [it] has the burden of proof,” then the moving party is entitled to judgment as a matter of
law. Celotex Corp. v. Catrett, 477 U.S. at 323.
DISCUSSION
Defendant argues that Plaintiff does not meet the standard for summary judgment
because there are genuine issues of material fact in this case.
(Defs’. Opp’n Br. at 2.)
Specifically, Defendant questions the authenticity of Plaintiff’s documents. (Id.) Defendant
raises the question of whether Elmer Yuen (“Yuen”), acting as attorney-in-fact for Plaintiff, had
the legal authority to bind Plaintiff to the documents. (Id.) Additionally, Defendant questions
whether Yuen forged Hade Zhong’s (“Zhong”), the owner of 44A Trump, “name on the Loan
Security Agreement, Escrow Agreement or Pledge Agreement.” (Id.)
In their opposition brief, for the first time, Defendant claims that the Note may have been
forged, but offers no support for such a statement or affidavit. (Defs’. Opp’n Br. at 2.) Further,
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at several points in Defendant’s Responsive Statement of Material Facts in Opposition to
Plaintiff’s Motion (“Responsive Stat. in Opp’n”), Defendant makes the following statement:
It is agreed that the Promissory Note contains the terms noted in
Plaintiff’s Statement of Material Facts Not in Dispute. However,
Defendant’s payments to 44A Trump are not what they purport to
be, as it does not represent the true motivations of the parties
involved at the time the agreement was signed.
(Responsive Stat. in Opp’n ¶¶ 7, 13.) Support for this conclusory statement is not provided.
Defendant also repeatedly refers to the Note for $560,000 as an “investment” rather than a loan
for 560,000 shares of common stock in IncNetworks. (Responsive Stat. in Opp’n ¶¶ 1-2.)
Defendant claims that “Elmer Yuen invested $500K (of which $300K was his wife, Julia Zhao’s
money), Jesse Russell invested $60K, and that Yuen made the investments in the name of 44A
Trump. (Id. at ¶ 1.)
Additionally, Defendant claims that even “[a]ssuming arguendo that the Court finds that
there was an actual loan, 44A Trump is not entitled to $107,439.08 plus future interest, based on
the terms of the alleged loan documents, which set the total amount of interest due when the
plaintiff accelerated the alleged loan.” (Id. at ¶14.) Below this Court addresses the arguments
presented.
“Bare conclusions in the pleadings, without factual support in tendered affidavits, will
not defeat a meritorious application for summary judgment.” U. S. Pipe & Foundry Co. v. Am.
Arbitration Ass’n, 67 N.J. Super. 384, 399-400 (N.J. Super. Ct. App. Div. 1961) (citing Gherardi
v. Board of Ed. Of City of Trenton, 53 N.J. Super. 349, 358 (N.J. Super. App. Div. 1958). Nor
will “speculation and conjecture...defeat a motion for summary judgment.” Acumed LLC v.
Advanced Surgical Servs., Inc., 561 F.3d 199, 228 (3d Cir. 2009). The non-movant “must point
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to concrete evidence in the record.” Orsatti v. New Jersey State Police, 71 F.3d 480, 484 (3d Cir.
1995).
In the instant matter, Defendant’s mere allegations of possible forged signatures and
invalid documents, which are raised for the first time in their opposition brief, are not sufficient
to raise genuine issues of material fact that would preclude summary judgment.
Despite
Defendant’s alleged reasons for entering the Note, the written terms of the Note, including the
initial amount and payment expectations, were negotiated, agreed to and are evident.
Further, “[t]he interpretation or construction of a contract is generally a legal question,
which is ‘suitable for a decision on a motion for summary judgment.’” Petersen v. Twp. of
Raritan, 418 N.J. Super. 125, 133 (N.J. Super. Ct. App. Div. 2011) (quoting Driscoll Const. Co.,
Inc. v. State, Dept. of Transp., 371 N.J. Super. 304, 313 (N.J. Super. App. Div. 2004)). A court
may grant summary judgment on an issue of contract interpretation when “the contractual
language being interpreted is subject to only one reasonable interpretation.” Emerson Radio
Corp. v. Orion Sales, Inc., 253 F.3d. 159, 164 (3d Cir. 2001) (citing Arnold M. Diamond, Inc. v.
Gulf Coast Trailing Co., 180 F.3d. 518, 521 (3d Cir. 1999)). Additionally, under New Jersey
law, when a plaintiff can “clearly [establish] that the debt was due and owing,” granting
summary judgment can be warranted. Optopics Laboratories Corp. v. Sherman Laboratories,
Inc., 261 N.J. Super. 536, 546 (N.J. Super. App. Div. 1993).
Here, an executed copy of the relevant agreements were submitted to this Court. The
Note clearly provides for the acceleration of payment and interest in the event of a default:
Payee may declare the entire outstanding principal amount payable
hereunder or any renewal hereof, together with accrued interest, to
be immediately due and payable, whereupon the same shall
become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby
expressly waived, anything herein to the contrary notwithstanding.
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(Compl. Ex. C, at 2.) Further, the Note states that “from and during the continuance of an event
of default, this Note shall bear interest at twelve percent (12%) per annum.” (Id.)
As such, this Court does not find that there are genuine issues of material fact in dispute
that would preclude summary judgment. Based on the foregoing, this Court finds that Plaintiff is
entitled to summary judgment regarding the legal issues presented.
CONCLUSION
For the reasons set forth above, this Court GRANTS Defendants’ Motion.
s/Susan D. Wigenton, U.S.D.J.
Orig: Clerk
cc:
Madeline Cox Arleo, U.S.M.J.
Parties
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