Greensill Capital (UK) Limited v. Tempus Intermediate Holdings, LLC et al
Filing
61
OPINION AND ORDER granting 50 Motion for Summary Judgment. Plaintiff is awarded $10,951,897.10. Accordingly, the Judgment is ENTERED in favor of Greensill against Defendants Tempus, Terry, and Gulbin, jointly and severally, in the amount of $10,951,897.10. Signed by Magistrate Judge Lawrence R. Leonard on 9/17/18. Copies distributed as directed. (bpet, )
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Newport News Division
GREENSILL CAPITAL (UK)
LIMITED,
Plaintiff,
Case No. 4:l 7-cv-127
v.
TEMPUS INTERMEDIATE
HOLDINGS, LLC, et al.,
Defendants.
OPINION AND ORDER
This matter is before the Court on Plaintiffs Motion for Summary Judgment as to Counts
I, II, and III of its four count Complaint. ECF No. 50. Previously, the Court granted Plaintiffs
Motion for Partial Judgment on the Pleadings, entering a declaratory judgment on Count IV.
ECF No. 37.
Plaintiff Greensill Capital (UK) Limited ("Greensill") filed its Motion for
Summary Judgement, ECF No. 50, and accompanying memorandum, ECF No. 51, on August 6,
2018.
Defendants Tempus Intermediate Holdings, LLC ("Tempus") and B. Scott Terry
("Terry") timely filed ajoint response on August 20, 2018. ECF No. 56. Defendant Jack Gulbin
("Gulbin") also filed a response on August 20, 2018. ECF No. 57. Plaintiff filed a timely reply
on August 24, 2018. ECF No. 59. The parties having fully consented to jurisdiction before the
undersigned, ECF No. 32, and the Motion is ripe for decision. The undersigned makes this
ruling without a hearing pursuant to Federal Rule of Civil Procedure 78(b) and Eastern District
of Virginia Local Civil Rule 7(J). For the following reasons, Plaintiff's Motion for Summary
Judgment, ECF No. 50, is GRANTED.
I. FACTUAL BACKGROUND
The Court's factual findings are based on Greensill's Statement of Undisputed Facts,
EOF No. 51, none of which the Defendants disputed in their responses to Greensill's dispositive
motion, EOF Nos. 56 & 57. This case arises out of a contractual dispute between foreign
Plaintiff Greensill and domestic Defendants Tempus, Jack Gulbin, and B. Scott Terry
(collectively "Defendants"). Plaintiff Greensill is a financial institution incorporated in England
and Wales and maintains its registered office in London, England. Defendant Tempus is a
corporate entity, incorporated in the State of Delaware with its principal place of business in
Williamsburg, Virginia and is in the business of leasing and selling airplanes. Defendant Gulbin
is an individual, shareholder, and principal of Tempus who resides in Colorado. Defendant
Terry is an individual, shareholder, and principal ofTempus who resides in South Carolina.
In October 2014 the parties entered into a Customer Agreement whereby the parties
contracted for Plaintiff to pay certain invoices incurred by Defendants in the operation of their
business, v^th the understanding that Defendants would repay Plaintiff in accordance with the
terms of the Customer Agreement. In October 2015 Gulbin and Terry executed a Guaranty
Agreement whereby they agreed that if Tempus defaulted on any payment obligation under the
Customer Agreement, all liabilities would be due and owing by Gulbin and Terry. After failing
to make payments as required under the Customer Agreement, in April 2016, Greensill, Gulbin,
and Terry executed a Forbearance Agreement, whereby Greensill agreed to forbear legal action
against Defendants in exchange for Defendants' agreement to repay monies owed pursuant to a
specific pajmient schedule. The Forbearance Agreement also included a provision that precluded
Defendants from pledging or transferring assets of Tempus prior to payment of all monies owed
without the permission ofPlaintiff.
IL STANDARD OF REVIEW
Summary judgment imder Federal Rule of Civil Procedure 56 is appropriate when the
Court, viewing the record as a whole and in the light most favorable to the nonmoving party,
finds there is no genuine issue of material fact in dispute and that the moving party is entitled to
judgment as a matter of law. Anderson v. Liberty Lobby, Inc., All U.S. 242, 248-50 (1986). A
court should grant summary judgment ifthe nonmoving party, after adequate time for discovery,
has failed to establish the existence of an essential element of that party's case, on which that
party will bear the burden of proof at trial. Celotex Corp. v. Catrett, All U.S. 317, 323(1986).
To defeat a motion for summary judgment, the nonmoving party must go beyond the
facts alleged in the pleadings and instead rely upon affidavits, depositions, or other evidence to
show a genuine issue for trial. See id. at 324. Conclusory statements, without specific
evidentiary support, are insufficient. Causey v. Balog, 162 F.3d 795, 802 (4th Cir. 1998).
Rather, "there must be evidence on which the jury could reasonably find for the [party]."
Anderson, All U.S. at 252. A party opposing summary judgment must present more than "a
scintilla of evidence." Id. at 251.
IV. DISCUSSION
Plaintiff moves for Summary Judgment as there is no genuine dispute of material fact that
Defendants owe a principal balance of $9,658,224.34, plus interest and attorney's fees, pursuant
to the various agreements between Greensill and Defendants.' ECF No. 50 at 1. Plaintiff
originally filed a four count Complaint in this Court based on diversity jurisdiction. ECF No. 1?
Count I alleges Breach of Contract against Defendant Tempus only, for breaching the Customer
'In its Reply Brief, Plaintiff provides it no longer seeks attorney's fees. ECF No. 59 at 2.
^ In an Opinion and Order dated April 24, 2018, ECF No. 37, the Court granted Greensill's Motion for Partial
Judgment on the Pleadings, ECF No. 25, as to Count IV of its Complaint. Plaintiff now moves for summary
judgment on the remaining three counts.
Agreement by failing to make payments as they came due on four accounts receivable Tempus
had submitted for payment. Id. at
55-63. Count II alleges Breach of Contract against
Defendants Gulbin and Terry for breaching the Guaranty Agreement by defaulting on the
payment obligations. Id. at
64-71. Count III alleges breach of contract against Defendants
Gulbin and Terry for breaching the Forbearance Agreement by failing to pay the entire
outstanding balance owed according to a payment schedule. Id. at
72-77.
A. Count 1: Breach of Contract Against Tempus for Breach of the Customer
Agreement
Plaintiff contends it is entitled to summary judgment on Count I based on Tempus'
undisputed breach of its payment obligation under the Customer Agreement. ECF No. 51 at 8.
It is undisputed that Greensill and Tempus entered into a Customer Agreement on October 16,
2014, which is governed by the laws of England and Wales. ECF No. 51 at 2, 3,
1, 4. "In
determining issues of foreign law, the court may consider any relevant material or source,
including testimony, whether or not submitted by a party or admissible under the Federal Rules
of Evidence. The court's determination must be treated as a ruling on a question of law." Fed.
R. Civ. P. 44.1.
Plaintiff relies on the Expert Report of Adam Tolley QC, a barrister in independent
practice and Qualified Coimsel in England and Wales, which outlines the applicable law and
concludes the Customer Agreement is supported by consideration and constitutes a binding
agreement under the laws of England and Wales. Id, attach. 8,
12-14. Pursuant to the
Customer Agreement, for services rendered, Tempus acted to have Brgimid Limited ("Bramid"),
its supplier, create four accounts receivable and submitted payment assurance upload files
("PAUFs")for each account, which created a binding obligation for Tempus to pay the certified
amount of each account receivable by the maturity date. Id. at 3,4,
2, 3, 10, 11. The certified
amount of all four accounts is $10,289,309.29. Id. at 4, H 13. Each account receivable was
transferred to Greensill and Bramid, but Tempus failed to pay the amount due to Greensill by the
applicable maturity date. Id. at 5,
12-13,15.
Plaintiff contends this constitutes a breach of the Customer Agreement and argues this
Court should grant summary judgment to Greensill on Count I of the Complaint. Id. at 9.
Tempus does not contest the facts put forth by Greensill nor does it contest Greensill's legal
conclusion that Tempus is liable for breach of the Customer Agreement. ECF No. 56 at 1-3.
With respect to Count I, the Court finds there is no genuine dispute of material fact and Greensill
is entitled to judgment as a matter of law. See Anderson, All U.S. at 248. Because the
undisputed facts demonstrate that Tempus has entered into a binding Customer Agreement,
which is valid under English and Welsh law, and subsequently breached that Agreement, the
Court GRANTS Plaintiffs Motion for Summary Judgment on Count I.
B. Count II: Breach of Contract Against Gulbin and Terry for Breach of the
Guaranty Agreement
Plaintiff contends it is entitled to summary judgment on Count II based on Gulbin and
Terry's failure to pay Greensill the amounts require by the Guaranty Agreement. ECF No. 51 at
9. It is undisputed that Gulbin and Terry signed the Guaranty Agreement on October 15, 2015,
which is governed by New York law. Id. at 3, 4,
5, 9. Under the Guaranty Agreement,
Gulbin and Terry personally guaranteed the payment of monies owed by Tempus to Greensill in
the event Tempus defaulted under the Customer Agreement. Id. at 4,5,
7,11. In addition, the
Guaranty Agreement provided Gulbin and Terry would pay for all expenses, including attomey's
fees, incurred by Greensill for enforcement of the Guaranty Agreement. Id. at 4, t 8. Tempus
defaulted on the Customer Agreement and Greensill sought payment from Terry and Gulbin for
the principal amount owed by Tempus, plus interest, but neither Terry nor Gulbin paid Greensill
under the Guaranty Agreement. Id. at 5,6, UK 15, 19-21,
Plaintiff claims this constitutes a breach of the Guaranty Agreement and argues this Court
should grant summary judgment to Greensill on Count II of the Complaint. Id. at 10. Under
New York law, "a guaranty is a promise to fulfill the obligations of another party."
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A., "Rabobank Intl," N.Y. Branch v.
Navarro, et al,25 N.Y.3d 485,492,36 N.E.3d 80,85 (2015). "New York law has explicitly and
consistently upheld personal guaranties ~ particularly, absolute and unconditional guaranties of
payment — that help to persuade a party to enter into a contract with a company for which the
guarantor works, the required consideration being implicitly the same consideration as underlies
the contract as a whole." AXA Inv. Managers UK Ltd. v. Endeavors Capital Mgmt. LLC,890 F.
Supp. 2d 373, 386 (S.D.N.Y. 2012) (finding on summary judgment plaintiff failed to show a
genuine issue of material fact regarding consideration ofa guaranty agreement).
Neither Gulbin nor Terry contest the facts put forth by Greensill nor do they contest
Greensilfs legal conclusion that each is bound to and liable for breach of the Guaranty
Agreement. ECF Nos. 56-57 at 1-3. Gulbin and Terry's only argument is that Greensill has
failed to meet the Fourth Circuit requirement for pleading and proving attorney's fees and
requests the Court deny Greensill attorney's fees. Id. at 1.^ Because Greensill has put forth no
evidence of the reasonableness for the rate claimed, the number of hours spent by its attorney, or
addressed the Johnson factors, Terry and Gulbin argue Greensill is not entitled to attorney's fees.
ECF Nos. 56-57 at 3. In response, Greensill explains that, in the interested ofjudicial economy,
it is willing to waive its right to attorney's fees under the Guaranty Agreement. ECF No. 59 at 2.
As Greensill no longer seeks an award of attorney's fees, Gulbin and Terry's argument is moot.
'
Notably, the Response Briefs filed by Gulbin and Terry are identical, although were filed separately.
6
With respect to Count II, the Court finds there is no genuine dispute of material fact and
Greensili is entitled to judgment as a matter of law. See Anderson,477 U.S. at 248. Because the
undisputed facts demonstrate that Gulbin and Terry entered into a binding Guaranty Agreement,
which appears valid under New York law, and subsequently breached that Agreement, the Court
GRANTS Plaintiffs Motion for Summary Judgment on Count II.
C. Count III: Breach of Contract Against Gulbin and Terry for Breach of the
Forbearance Agreement
Plaintiff contends it is entitled to summary judgment on Count III based on Gulbin and
Terry's failure to pay Greensili the amounts required by the Forbearance Agreement. ECF No.
51 at 9. It is undisputed that Gulbin and Terry signed the Forbearance Agreement on March 31,
2016, which is governed by New York law. Id. at 5, 6,
16, 18. Under the Forbearance
Agreement, Greensili agreed to abstain from legal action in exchange for Gulbin and Terry's
agreement to repay to Greensili on a payment schedule for the principal balance of
$10,289307.29, plus interest, that was originally owed by Tempus under the Customer
Agreement and by Gulbin and Terry under the Guaranty Agreement. Id. at 5, ^ 16. The
Forbearance Agreement also provided that any failure to pay a scheduled payment would incur a
daily interest charge at the rate of 15% per annum, would constitute a breach of the Forbearance
Agreement, and would make due immediately the full sum owed. Id. at 6, H 17. Greensili was
paid $631,082.95, but Gulbin and Terry ultimately failed to make payments consistent with
Forbearance Agreement schedule. Id. at 6,^ 20.
Plaintiff claims this constitutes a breach of the Forbearance Agreement and argues this
Court should grant summary judgment to Greensili on Count 111 of the Complaint. Id. at 11.
Neither Gulbin nor Terry contest the facts put forth by Greensili nor do they contest Greensill's
legal conclusion that each is bound to and liable for breach of the Forbearance Agreement. ECF
Nos. 56-57 at 1-3. With respect to Count III, the Court finds there is no genuine dispute of
material fact and Greensill is entitled to judgment as a matter of law. See Anderson, All U.S. at
248. Because the undisputed facts demonstrate that Gulbin and Terry entered into a binding
Forbearance Agreement, which appears valid under New York law, and subsequently breached
that Agreement,the Court GRANTS Plaintiffs Motion for Summary Judgment on Count III.
Greensill has opted to forgo its right to attorney's fees under the Guaranty Agreement and
seeks accrued interest to be calculated at 6% per year."^ ECF No. 59 at 2. Using the 6% rate.
Plaintiff has properly calculated the applicable interest to total $1,293,672.76. Plaintiff is
entitled to the current principal balance of $9,658,224.34^ plus $1,293,672.76 in interest. Thus,
Plaintiff shall be awarded a total of$10,951,897.10.
V. CONCLUSION
Accordingly, Plaintiffs Motion for Summary Judgment as to Counts I, II, and III of Its
Complaint, ECF No. 50, is GRANTED,and Plaintiff is awarded $10,951,897.10. Accordingly,
the Judgment is ENTERED in favor of Greensill against Defendants Tempus, Terry, and
Gulbin, jointly and severally, in the amount of $10,951,897.10. Should Defendants wish to
appeal, they must file a Notice of Appeal with the Clerk of this Court within thirty (30) days of
the date ofthis Order. See Fed. R. App. P. 3, 4.
The Clerk is DIRECTED to forward a copy of this Order to all counsel of record, and to
Defendant Terry at 406 A N. Main St., Greer, South Carolina 29650, and to Defendant Tempus
at 471 McLaws Circle, Suite A, Williamsburg, Virginia 23185.
^ The Customer Agreement with Tempus provides a default interest rate of 10% per year and the Forbearance
Agreement provides a default interest rate of 15% per year. ECF No. 51, attach. 1.
^ This number is reached by subtracting the $631,082.95 paid to Greensill under the Forbearance Agreement from
the original principal amount of$10,289,307.29.
8
It is so ORDERED.
Lawrence R. Leonard
United States Magistrate Judge
Newport News, Virginia
September 17,2018
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