DE LAGE LANDEN FINANCIAL SERVICES, INC. v. REGAN TECHNOLOGIES CORPORATION

Filing 20

MEMORANDUM OPINION. SIGNED BY HONORABLE TIMOTHY J. SAVAGE ON 2/22/2017. 2/23/2017 ENTERED AND COPIES E-MAILED. (aeg)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
DE LAGE LANDEN FINANCIAL
SERVICES, INC.
v.
REGAN TECHNOLOGIES CORPORATION

:
:
:
:
:
:

CIVIL ACTION

NO. 16-4865

MEMORANDUM OPINION

Savage, J.

February 22, 2017

The facts in this collection case are undisputed. As alleged in the complaint and
admitted in the answer, plaintiff De Lage Landen Financial Services, Inc. financed
defendant Regan Technologies Corporation’s acquisition of technology equipment and
Regan has not made the payments required by the Loan & Security Agreement and the
accompanying Promissory Note since May 1, 2016. 1 Therefore, we shall grant De
Lage’s unopposed motion for summary judgment.
De Lage initiated this action on September 9, 2016. Seeking to buy itself time,
Regan unsuccessfully moved for a transfer of venue.

It did nothing since in this

litigation. It did not respond to De Lage’s summary judgment motion, nor dispute De
Lage’s Statement of Undisputed Facts.
Legal Standard
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and [that] the movant is entitled to judgment as a matter

1

Compl. (Doc. No. 1) ¶¶ 7–10, 15–18, at ECF 3–6; Compl. Ex. A (Doc. No. 1), De Lage Loan &
Security Agmt. (“Loan & Security Agmt.”), at ECF 7–11; Answer (Doc. No. 12) ¶ 18.

of law.” Fed. R. Civ. P. 56(a). Judgment will be entered against a party who fails to
sufficiently establish any element essential to that party’s case and who bears the
ultimate burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In examining the motion, we must draw all reasonable inferences in the nonmovant’s
favor. InterVest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 159–60 (3d Cir. 2003).
Regan has not responded to De Lage’s motion. Unlike the district court can with
other motions, we may not grant an uncontested summary judgment motion without an
independent determination that the movant is entitled to judgment under Rule 56. See
Fed. R. Civ. P. 56(e)(3) advisory committee’s note to 2010 amendment (recognizing
that “summary judgment cannot be granted by default even if there is a complete failure
to respond to the motion”); E.D. Pa. Local R. Civ. P. 7.1(c). The court must ensure that
“the motion and supporting materials . . . show that the movant is entitled to it.” Fed. R.
Civ. P. 56(e)(3). An unopposed motion for summary judgment may be granted only if
the moving party demonstrates that there is no genuine dispute of material fact and it is
entitled to judgment as a matter of law.
By failing to file a response within the specified time, “the nonmoving party
waives the right to respond to or to controvert the facts asserted in the summary
judgment motion.” Reynolds v. Rick’s Mushroom Serv., 246 F. Supp. 2d 449, 453 (E.D.
Pa. 2003) (quoting Reed v. Nellcor Puritan Bennett, 312 F.3d 1190, 1195 (10th Cir.
2002); and citing Anchorage Assocs. v. V.I. Bd. of Tax Review, 922 F.2d 168, 175–76
(3d Cir. 1990)). The scheduling order in this case clearly warned the parties that “[a]ll
material facts set forth in the Statement of Undisputed Facts served by the movant shall

2

be deemed undisputed unless specifically controverted by the opposing party.” 2 Thus,
our task is to determine whether, given these undisputed facts, De Lage is entitled to
judgment as a matter of law.
Analysis
There is no dispute that there was a contract and De Lage did not make the
payments required by the contract. The only remaining issue is the amount due under
the contract.
The Note obligated Regan to pay twenty-four equal, monthly payments of
$47,325.75. 3 Failure to make the monthly payment when due constitutes an event of
default as defined under the Loan Agreement. 4
Despite demand, Regan failed to make the payment due on May 1, 2016, and
has not made any payments since. De Lage declared the loan in default on September
1, 2016, and, as provided in the Agreement, it accelerated the amounts due. 5
As of September 1, 2016, the date De Lage declared the loan in default, Regan
had failed to make five monthly payments on the Note. These five past-due payments
amount to $236,628.75.

2

Scheduling Order (Doc. No. 14) ¶ 6(c).

3

Stmt. of Undisputed Facts (Doc. No. 19-2) (“SUF”) ¶ 6; Loan & Security Agmt. at ECF 8.

4

SUF ¶¶ 8–9; Loan & Security Agmt. § 15(i), at ECF 9 (“The occurrence of any one of the following
shall constitute an Event of Default hereunder: (i) Borrower fails to pay any periodic installment payment
or other amount due hereunder or under the Note on or before the tenth (10th) day following the date
when the same becomes due and payable.”).
5

SUF ¶ 12 (citing Loan & Security Agmt. § 16).

3

There were ten payments remaining on the Note from October 1, 2016, through
July 1, 2017. The total of the ten remaining payments is $473,257.50. 6 De Lage
discounted the ten remaining payments at a rate of three percent. 7 The discount on the
remaining payments reduces the total by $6,442.74, leaving an accelerated amount of
$466,814.76.
Regan incurred late charges of five percent of each of the defaulted payments
due March 1, 2016, through August 1, 2016, totaling six late charges and amounting to
$14,197.74. 8
De Lage seeks pre-judgment interest from the date of default through the date of
judgment, February 22, 2017. 9 Pre-judgment interest is a matter of right in breach of
contract cases. McDermott v. Party City Corp., 11 F. Supp. 2d 612, 632 (E.D. Pa.
1998) (citing Fernandez v. Levin, 548 A.2d 1191, 1193 (Pa. 1988); and Spang & Co. v.
USX Corp., 599 A.2d 978, 983 (Pa. Super. 1991)). The Agreement provides that De
Lage may recover pre-judgment interest at a rate of two percent per month on the
principal. 10

The principal, $717,641.25, is calculated as the sum of the past due

payments, the late charges and the remaining discounted payments. 11 Two percent of
the principal amounts to $14,352.83. Thus, pre-judgment interest is $14,352.83 per
month.
6

See Loan & Security Agmt. § 1.

7

Id. § 16(b)(ii).

8

Glick Aff. (Doc. No. 19-1) ¶ 14 n.2; Loan & Security Agmt. § 3.

9

See Loan & Security Agmt. § 16(d).

10

Id.

11

Id.

4

The period of time from default to the date of judgment is five months and twentytwo days. Because the two-percent interest rate is a monthly rate and the Note defines
year and month as “360-day year consisting of twelve 30-day months,” we calculate the
per-diem interest by dividing $14,352.83 by thirty days. 12 Twenty-two days of per-diem
interest is $10,525.41.

Thus, De Lage may recover pre-judgment interest at two

percent of the principal for five months and twenty-two days, totaling $82,289.56. Postjudgment interest will accrue pursuant to 28 U.S.C. § 1961. 13
The Loan and Security Agreement provides that De Lage shall have the right to
recover from Regan all expenses paid or incurred in connection with the enforcement of
its rights under the Agreement, including attorney fees and legal expenses. 14 Damages
for attorney fees and costs may be recovered where there is “a clear agreement by the
parties.” De Lage Landen Fin. Servs. v. Rozentsvit, 939 A.2d 915, 923 (Pa. Super.
2007) (citing Merlino v. Del. Cty., 728 A.2d 949, 951 (Pa. 1999)). The Agreement
provides De Lage has the right to recover attorney fees and legal expenses, amounting
to $19,452.49.

12

Id. at ECF 8 (Promissory Note).

13

Section 1961(a) provides that “[i]nterest shall be allowed on any money judgment in a civil case
recovered in a district court,” and that “such interest shall be calculated from the date of the entry of the
judgment.” 28 U.S.C. § 1961(a).
14

See Loan & Security Agmt. § 16; Glick Aff. Ex. 1.

5

The following chart summarizes the payments due.
Description of
Payment Due
Past due payment

Amount
$47,325.75

Number of
Payments Due
5

Total
$236,628.75

Remaining payment

$47,325.75

10

$473,257.50

Late charge

$2,366.29

6

$14,197.74

3% discount on
remaining payments
2% interest per
month on principal
Attorney fees and
costs
TOTAL

---

---

($6,442.74)

$14,352.83 per
month
$19.452.49

5 months, 22 days

$82,289.56

---

$19,452.49

---

---

$819,383.30

Conclusion
There is no factual dispute that Regan breached its duty to make payments
under the terms of the Agreement and Note, and owes De Lage $819,383.30 under
their terms. De Lage is entitled to judgment as a matter of law. Therefore, we shall
grant its motion for summary judgment.

6