Opinion
3:01-CV-0582-P
March 18, 2002
MEMORANDUM OPINION AND OkDER
Now before the Court are Plaintiff's Motion for Final Summary Judgment, filed December 10, 2001, Defendant's Response, and Plaintiff's Reply. Also before the Court is Plaintiff's Motion to Vacate Scheduling Order, filed March 13, 2002. After considering the parties' briefing and arguments, and the applicable law, the Court GRANTS Plaintiff's Motion for Summary Judgment and DENIES AS MOOT Plaintiff's Motion to Vacate Scheduling Order.
I. Background
Plaintiff first brought this breach of contract action on March 26, 2001. Plaintiff claims that Defendants breached a lease agreement, and seek damages for the breach of the agreement and attorney's fees.
On March 26, 1998, Defendant Artistic Plastics Fixtures, Inc. ("Artistic), as Lessee, and Balboa Capital Corporation ("BCC"), as Lessor, executed (1) Master Lease Agreement No. 01-05581-1 (the "Master Lease"), (2) Addendum "A" to Lease Agreement #01-05581-1 (the "Addendum"), and (3) Lease Schedule No. 01 (the "Lease Schedule") (collectively, the "Lease"). Pl.'s Compl., Exs. A, B. The Lease Schedule listed the specific equipment being leased. Pl.'s Compl, Ex. B. The Master Lease set out the terms of the lease agreement. Pl.'s Compi., Ex. A. The Addendum provided that upon completion of the Lessee's lease payments, "one final payment of one U.S. dollars [sic] ($1.00) shall become due, owing and payable by Artistic Plastics Fixtures, Inc. to Lessor for which title shall pass from lessor to lessee "as-is, where is" without any warranties express or implied, whatsoever." Pl.'s Compl., Ex. A.
On February 19, 1998, Defendant Donald W. Weatherby ("Weatherby") signed a Guaranty in favor of BCC, its successors and assigns, guaranteeing all obligations of Artistic under the Lease. Pl.'s Compl., Ex. C.
The Lease was subsequently assigned by BCC to Plaintiff European American Bank ("EAB") through a Sale and Assignment of Chattel Paper, dated March 25, 1998. The Agreement assigned to EAB "all of the Seller's right, title and interest in and to, but none of its obligations." Pl.'s App. at 89. EAB and BCC also executed a Notice of Assignment and Highlights of Contract on March 25, 1998. Pl.'s App. at 90.
The agreement leased certain equipment to Artistic, and Artistic was required to pay three (3) monthly payments of $50.00 each, then three (3) monthly payments of $1,000.00 each, followed by sixty (60) monthly payments of $3,607.83. Pl.'s App. at 83 (Lease Schedule). The first payment was due on April 1, 1998. Pl.'s App. at 76 (Conklin Aft ¶ 7).
Artistic did begin payments on the lease. Artistic made three (3) payments of $50.00 each, three (3) payments of $1,000.00 each, and twenty-four (24) payments of $3,607.83 each, plus a partial payment of $84.34. Pl.'s App. at 76 (Conklin Aff. ¶ 8). Plaintiff failed to make the payment due on October 28, 2000, and has failed to make any payment thereafter. Pl.'s App. at 76 (Conklin Aft ¶ 8). Weatherby has also refused to pay the amounts past due under the Guaranty. Pl.'s App. at 76 (Conklin Aff. ¶ 8).
$17,954.81 Four (4) accrued monthly payments of $3,607.83 each (payments due November 2000 through February 28, 2001), plus a partial payment of $3,523.49 (unpaid amount of payment due October 28, 2000) $103,884.05 Thirty-one (31) future monthly payments of $3,607.83, each discounted to present value at a discount factor of six percent (6%) $3,517.97 Accrued Late Charges totaling $125,356.83. Plaintiffs now move the Court to grant summary judgment on their claims and seek damages for the total amount due.II. Summary Judgment Standard
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). All evidence and the reasonable inferences to be drawn therefrom must be viewed in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the burden of informing the district court of the basis for its belief that there is an absence of a genuine issue for trial, and of identifying those portions of the record that demonstrate such an absence. Celotex, 477 U.S. at 323.
Once the moving party has made an initial showing, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The party defending against the motion for summary judgment cannot defeat the motion unless he provides specific facts that show the case presents a genuine issue of material fact, such that a reasonable jury might return a verdict in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Mere assertions of a factual dispute unsupported by probative evidence will not prevent summary judgment. Id. at 248-50; Abbot v. Equity Group, Inc., 2 F.3d 613, 619 (5th Cir. 1993). In other words, conclusory statements, speculation and unsubstantiated assertions will not suffice to defeat a motion for summary judgment. Douglass v. United Serv's. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir. 1996) (en banc). If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to is case, and on which he bears the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
Finally, the Court has no duty to search the record for triable issues. Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). "The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which the evidence supports his or her claim." Id. A party may not rely upon "unsubstantiated assertions" as competent summary judgment evidence. Id.
III. Discussion
Plaintiff argues that no issue of material fact remains as to of whether either Defendant breached the Lease agreement. Defendants provide two interrelated responses. First, Defendants argue that the lease was in fact a security interest, and second, that because it was a security interest and not a lease, the affirmative defense of usury shields them from liability.
Defendants attempted to add the affirmative defense of usury through a motion for leave to amend their Answer. The motion was considered, and by order of February 26, 2002, the Court denied Defendants' request for leave to amend. Therefore, the affirmative defense of usury is not before the Court at this time. Defendants do not provide any additional argument regarding the significance of the documents as a security interest and not a lease. Therefore, the Court considers Plaintiff's showing and considers the argument that Defendants breached the Lease and are liable for damages.
Plaintiff asserts that Defendants have breached the Lease. "Under Texas law, the elements of a breach of contract claim are: (1) the existence of a contract between plaintiff and defendant; (2) the creation of duties under the contract; (3) a breach of a duty by the defendant; and (4) damages sustained by the plaintiff as a result of the breach." Absolute Resource Corp. v. Hurst Trust, 76 F. Supp.2d 723, 733 (N.D. Tex. 1999) (Maloney, J.) Plaintiff has established these four elements and no material issue of fact remains.
Plaintiff has established the existence of the contract. Defendants do not dispute the existence of the contract, only the nature of the relationship created. The contract sets out the duties of the parties. Specifically, Defendant Artistic was bound by the Lease to pay certain monthly fees for the use of certain equipment. Defendant Weatherby was bound by the Guaranty to ensure such payment. Plaintiff has established breach. Plaintiff has, through affidavits, established the Defendants stopped paying their monthly payment. Finally, Plaintiff has established damages in the amount of $125,356.83 and has established the contract's remedy for a breach. Defendants do not dispute any of these elements. As noted above, their sole defense is that the affirmative defense of usury is available because the documents created a security interest rather than a lease. However, the terms of the contract have been breached, and the contract provides for the remedy that Plaintiff seeks. Therefore, the Court GRANTS Plaintiff's motion for summary judgment. Accordingly, Plaintiff's Motion to Vacate Scheduling Order is DENIED AS MOOT.
IV. Attorney's Fees
Plaintiff also seeks attorney's fees, pursuant to the remedies clause of the Master Lease. The contract specifically allows that "In the event of any legal action with respect to this Lease, the prevailing party in any such action shall be entitled to reasonable attorney fees including attorney fees incurred at the trial level, including action and bankruptcy court, on appeal or review or incurred without action, suits or proceedings, together with all costs and expenses incurred in pursuit thereof" Pl.'s App. at 81 (Master Lease ¶ 26).
Plaintiff prevails in this action as the Court finds it proper to grant summary judgment in their favor. Plaintiff has provided competent evidence indicating that Plaintiff has spent approximately $5,000.00 in attorney's fees and $500.00 in related expenses. Pl.'s App. at 92-93 (Clary Aff ¶ 5). Defendants do not dispute these amounts.
Therefore, the Court grants Plaintiff's request for attorney's fees. Defendants are hereby ordered to submit to Plaintiff $5,500 for Plaintiff's attorney's fees and expenses in litigating this action.