BMO Harris Bank N.A. v. ICS 1 LTD et al
Filing
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OPINION and ORDER granting 8 Plaintiff's Motion for Summary Judgment. Signed by Judge George C. Smith on 9/28/18. (sem)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
BMO HARRIS BANK N.A.,
Plaintiff,
v.
Case No. 2:17-cv-760
JUDGE GEORGE C. SMITH
Magistrate Judge Jolson
ICS 1 LTD, et al.,
Defendants.
OPINION AND ORDER
This matter is before the Court upon Plaintiff BMO Harris Bank’s Motion for Summary
Judgment. (Doc. 8). Defendants, ICS 1 Ltd. (“Borrower”) and Mark Harmon (“Guarantor”), filed
a Response in Opposition, followed by a retraction. (Docs. 13 and 14). Plaintiff also filed a Reply.
(Doc. 15).
Additionally, Plaintiff filed a Supplemental Motion on damages following the
liquidation of the collateral. (Doc. 22). Accordingly, the issues before the Court are fully briefed
and ripe for review. For the reasons that follow, Plaintiff BMO Harris Bank’s Motion for Summary
Judgment is GRANTED.
I.
BACKGROUND
This is a collection and replevin action. On March 12, 2015, Borrower entered into two
loan agreements (collectively the “Agreements”) with non-party GE Capital Commercial, Inc.
(“GECCI”) to finance the purchase of equipment for use in Borrower’s business. Pursuant to the
first agreement, Borrower agreed to pay GECCI $305,151.92 including interest. (Doc. 22-1). On
April 21, 2015, Borrower entered into a second agreement whereby GECCI agreed to finance
Borrower’s purchase of additional equipment. Borrower agreed to pay GECCI $99,188.88
including interest. (Doc. 22-1). Guarantor executed a Continuing Guaranty for both loan
agreements in which Guarantor “agreed to promptly and fully perform, pay and discharge all of
Borrower’s present and future liabilities, obligations and indebtedness to GECCI and its successors
in interest.” (Doc. 8, Mot. for. Sum. Judgment at 5). Borrower also granted GECCI a security
interest in collateral, which consisted of several vehicles, and GECCI “perfected its security
interests in the Collateral by recording its lien on the Certificates of Title for each of the vehicles.”
(Doc. 8-1, SOF ¶¶ 12–13). On December 1, 2015, GECCI transferred and assigned to Plaintiff all
its rights, titles, and interests in and to its accounts with Defendants at which point Plaintiff became
GECCI’s successor-in-interest. (Id. ¶ 15). In early 2017, Borrower defaulted on both loan
agreements by failing to pay the amounts due thereunder. (Doc. 1, Compl. ¶ 16). As a result of
the default, Plaintiff “elected to accelerate the balance due thereunder and declare the entire
indebtedness owed immediately due and payable.” (Doc. 8, Mot. for. Sum. Judgment, at 6). “The
principal amount due and owing after acceleration totals not less than $197,145.67.” (Doc. 8-1,
SOF ¶ 21). In early 2018, Plaintiff took possession of the Collateral and subsequently “sold off
all units of the Collateral at public auction” receiving “net proceeds of $94,468.09.” (Id. ¶¶ 30,
34).
II.
STANDARD OF REVIEW
Plaintiff has moved for summary judgment pursuant to Rule 56 of the Federal Rules of
Civil Procedure. Summary judgment 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 Court’s purpose in considering a summary judgment motion is
not “to weigh the evidence and determine the truth of the matter” but to “determine whether
there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). A
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genuine issue for trial exists if the Court finds a jury could return a verdict, based on “sufficient
evidence,” in favor of the nonmoving party; evidence that is “merely colorable” or “not
significantly probative,” however, is not enough to defeat summary judgment. Id. at 249–50.
The party seeking summary judgment shoulders the initial burden of presenting the court
with law and argument in support of its motion as well as identifying the relevant portions of
“‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56). If this initial
burden is satisfied, the burden then shifts to the nonmoving party to set forth specific facts showing
that there is a genuine issue for trial. See Fed. R. Civ. P. 56(e); Cox v. Kentucky Dep’t of Transp.,
53 F.3d 146, 150 (6th Cir. 1995) (after burden shifts, nonmovant must “produce evidence that
results in a conflict of material fact to be resolved by a jury”). In considering the factual allegations
and evidence presented in a motion for summary judgment, the Court must “afford all reasonable
inferences, and construe the evidence in the light most favorable to the nonmoving party.” Id.
III.
DISCUSSION
Plaintiff seeks judgment in its favor against Defendants in the amount of $165,327.14 plus
interest accruing at a rate of $77.73 per diem following September 6, 2018. (See Doc. 22). Plaintiff
argues that summary judgment is appropriate with respect to both liability and damages. Plaintiff
“is entitled to summary judgment with respect to liability, since the undisputed facts establish all
four elements of BMO Harris’ claim for breach of contract.” (Doc. 22, Amend. Mem. at 8).
Additionally, regarding damages, there is no genuine dispute “that Plaintiff has been damaged and
the amount of damages.” (Doc. 22, Amend. Mem. at 9).
A.
Breach of Contract
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The parties do not dispute that Defendants’ default under the Agreements constitutes a
breach of contract which entitles Plaintiff to recover. “Defendants conceded in answering the
Complaint that the Agreements constituted valid and binding contracts” and also admitted that
“the Loan Documents that provide BMO Harris its rights ‘speak for themselves.’” (Doc. 22,
Amend. Mem. at 8).
The laws of Utah govern the parties’ respective rights and obligations under the
Agreements as dictated by contract. Under Utah law, a breach of contract action requires: “(1) a
valid contract; (2) performance by the plaintiff thereunder; (3) breach of the contract by the
defendant; and (4) damages to the plaintiff.” Simmons Media Grp. v. Waykar, LLC., 335 P.3d 885,
890 (Utah Ct. App. 2014). The parties are in agreement that the above requirements are met. Both
parties agree that the Agreements constitute valid contracts. They also agree that “BMO Harris
and its predecessors-in-interest have performed any and all conditions and obligations required of
them under the Loan Documents.” (Doc. 8-1, SOF ¶ 25). Furthermore, “Defendants breached by
failing to make payments when due as required under the Agreements, thus causing damage to
BMO Harris, which is entitled to recover from Defendants.” (Doc. 22, Amend. Mem. at 8).
Consequently, all the requirements of a valid cause of action for breach of contract are met making
summary judgment appropriate as no genuine issues of material fact remain.
B.
Damages
The amount of damages due and owing in this case was originally disputed by the parties.
Plaintiff argued that summary judgment was appropriate as “Defendants cannot genuinely dispute
that Plaintiff has been damaged and under the Agreements is owed an amount not less than
$216,520.41, plus interest at the rate of $98.57 per diem from June 29, 2017, plus attorneys’ fees
and costs incurred by BMO Harris to recover from Defendants all such amounts owed.” (Doc. 8,
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Mot. for Sum. Judgment at 10). Defendants initially argued that there was an issue of material fact
regarding the amount of damages owed due to “Plaintiff’s repossession of one of the tractors.”
(Doc. 13, Mem. in Opp. at 1). Defendants later retracted the Memorandum in Opposition upon
discovering that they were mistaken about repossession of the tractor and stated that “once Plaintiff
repossesses all five trucks, it will determine the amount of alleged damages.” (Doc. 14, Mem. in
Supp. at 2). Now that Plaintiff has repossessed the trucks and sold the Collateral, there is no longer
a dispute regarding the amount of damages. “BMO Harris credited the account with the net sale
proceeds of the Collateral on May 2, 2018, and applied the proceeds first to outstanding costs of
collection, then to accrued and unpaid late fees, then to accrued and unpaid interest, and then to
principal.” (Doc. 22, Amend. Mem. at 6). “Calculated as of September 6, 2018, after crediting
Defendants with the net sale proceeds of the Collateral, the total amount due and owing under the
Agreements, not including attorneys’ fees, totals $165,327.14.” (Doc. 22, Amend. Mem. at 6–7).
“Interest continues to accrue on the amount of unpaid principal at the rate of $77.73 per diem.”
(Doc. 22, Amend. Mem. at 6). Therefore, there is no genuine issue of material regarding damages
as both parties are now in agreement on amount of damages following the sale of the Collateral.
C.
Attorneys’ Fees
Plaintiff argues that “under the Agreements, Defendants are obligated to the pay the
attorneys’ fees and costs incurred by BMO Harris in enforcing its rights thereunder.” (Doc. 22
Amend. Mem. at 7). However, Plaintiff provides no foundation for this argument nor is an amount
owed specified. Due to the lack of specificity, Plaintiff’s request to order payment of attorneys’
fees is denied.
IV.
CONCLUSION
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Based on the aforementioned discussion, the Court finds that no genuine issues of fact
remain and that Plaintiff BMO Harris Bank is entitled to judgment as a matter of law pursuant to
Rule 56 of the Federal Rules of Federal Procedure. Accordingly, the Court GRANTS Plaintiff’s
Motion for Summary Judgment (Doc. 8). Final judgment shall be entered in favor of Plaintiff in
the amount of $165,327.14 plus interest at the rate of $77.73 per diem.
The Clerk shall remove Documents 8, 13, 14, 15, and 22 from the Court’s pending motions
list and enter judgment in favor of the Plaintiff.
IT IS SO ORDERED.
/s/ George C. Smith__________________
GEORGE C. SMITH, JUDGE
UNITED STATES DISTRICT COURT
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