CIT v. LLC (2013)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT

INTRODUCTION

This case concerns the collection of a promissory note executed by the defendant International Wine Merchants, LLC d/b/a Julianne's Wine & Liquors (“Borrower”) and guaranteed by the defendants Beer Barn of Waterbury, LLC (“BBW”) and Nina S. Patel, individually (“Patel”) (BBW and Patel “Guarantors”).   It is undisputed that the Loan Documents (defined below) are in default and Plaintiff now requests that judgment enter against Borrower and Guarantors (said Borrower and Guarantors are sometimes hereinafter collectively referred to as “Defendants”) for all amounts due thereunder.

The following further facts as adopted from plaintiff's motion are also undisputed.   Borrower executed and delivered to Plaintiff, among other things, (I) a certain Note dated May 8, 2006 in the original principal amount of $420,000.00 (the “Note”), (ii) a certain Loan Agreement dated May 8, 2006 (the “Loan Agreement”), and (iii) a certain Security Agreement dated May 8, 2006 (the “Security Agreement”).   Pursuant to Connecticut Rules of Practice, 10–29, the plaintiff has incorporated the Note, Loan Agreement and Security Agreement.

By way of factual background, BBW executed and delivered to Plaintiff a certain unconditional guarantee dated May 8, 2006 (the “BBW Guaranty”) and Patel executed and delivered to Plaintiff an unconditional guarantee dated May 8, 2006 (the “Patel Guaranty”).   Plaintiff has also attached copies of these guaranties as Exhibits C & D to its Complaint and in support of this motion as Exhibits C & D. The subject guarantees provide that the Guarantors, among other things, each jointly and severally, unconditionally guaranteed payment to Plaintiff of all amounts due under the Note.¹

Plaintiff alleges that it is the current owner and holder of the Note, the Loan Agreement, the Security Agreement, the BBW Guaranty, the Patel Guaranty, the Financial Statement (as defined in the Complaint and attached as Exhibit F, in support of this motion), and any and all documents, agreements and/or instruments of any kind whatsoever executed and/or delivered in connection therewith (said Note, Loan Agreement, Security Agreement, BBW Guaranty, Patel Guaranty, Financing Statement and related documents, are hereinafter collectively referred to as the “Loan Documents”).   Plaintiff is the current owner and holder of the Loan Documents.   It is undisputed that Borrower failed to make certain monthly payments due under the Loan Documents and failed to make payment following the above noted demand of all amounts due under the Loan Documents by letter dated June 12, 2012.

Plaintiff has stated the basis for its claim in its Demand for Payment dated June 12, 2012.   This demand states that as of that date Borrower was in default in the amount of $33,095.02 due to its failure to remit payment since February 2012.   Based on the $33,095.02 arrearage, plaintiff exercised its right to demand payment in full of the outstanding principal, interest, late charges and miscellaneous charges as provided by the terms of the loan documents in the total amount of $232,916.38.   Following failure of defendants to make payment under the subject loan, plaintiff commenced this action by writ, summons and complaint on October 22, 2012.

In her answer, Defendant Patel denied all allegations of the complaint except identifying information regarding plaintiff and defendant Borrower.   Borrower and Patel did not plead any special defenses.

Plaintiff now claims it is entitled to summary judgment because no material issue of fact exists as to whether Defendants are in default under the respective Loan Documents and are jointly and severally liable to Plaintiff for all amounts due thereunder.   In support of the Motion for Summary Judgment, Plaintiff filed the affidavit February 5, 2013 of Mariesa Philbin, a Problem Loan Management Specialist of CIT Bank, as Servicer for Plaintiff (the “Affidavit”),² which supports the foregoing and all facts alleged in the Complaint.   As stated in the Affidavit, as of February 1, 2013, there is due and owing to Plaintiff from Defendants, jointly and severally, on account of the Loan Documents (exclusive of court costs and attorneys fees), the total aggregate amount of $242,865.38.

Without any specific reference, the memorandum in opposition to the motion for summary judgment asserts that there are substantive and credibility factual issues in the interpretation of the note and the personal guarantee by Nita Patel.   Defendant Patel claims that factual issues exist because 1) English is not her first language, 2) she understood that the plaintiff would liquidate Borrower's assets before proceeding on the guarantee and 3) she disputes the amount owed on the loan.   She does not, however, provide a factual basis for these claims and she has not cited any legal authority which would support them.   Notwithstanding the Defendant Patel insists that a factual hearing is required as to her understanding of the guarantees and the scope the parties intended them to have.   She also asserts that there are issues of proof as to the underlying debt which require a factual hearing.

II. APPLICABLE LAW

Summary judgment should be granted where there are no genuine issues of material fact.  Telesco v. Telesco, 187 Conn. 715, 718 (1982);  Hammil v. Smith, 25 Conn.Sup. 183, 185 (1964).   A genuine issue of material fact is one that would alter the outcome of a case.  Hammil, 25 Conn.Sup. at 185.   Summary judgment should be granted when “the documents submitted demonstrate that there is no genuine issue of material fact remaining between the parties and that the moving party is entitled to judgment as a matter of law.”   Daily et al. v. New Britain Machine Company, 200 Conn. 562, 568 (1986) (citing old Practice Book § 384).   See also, Yanow v. Teal Industries, Inc., 178 Conn. 262, 268 (1979).   Once the party moving for summary judgment has presented evidence in support of its motion, the opposing party must present evidence that demonstrates the existence of a disputed issue of fact.   See Daily, 200 Conn. at 568.

It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.  “Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § 380.”  [Citation omitted.]  “The movant has the burden of showing the non-existence of such issue but the evidence thus presented, if otherwise sufficient, is not rebutted by the bald statement that an issue of fact does exist.”

Id. (citing Kasowitz v. Mutual Construction Co., 154 Conn. 607, 613 (1967)).

Summary judgment is a particularly appropriate remedy in cases involving promissory notes where the terms of the note and related documents are clear and unambiguous, a default has unquestionably occurred and the amounts due have not been paid.   Indeed, “[a] promissory note is nothing more than a written contract for the payment of money, and, as such, contract law applies ․ In construing a contract, the controlling factor is normally the intent expressed in the contract, not the intent which the parties may have had or which the court believes they ought to have had ․ Where ․ there is clear and definitive contract language, the scope and meaning of that language is not a question of fact but a question of law ․” Fidelity Bank v. Krenisky, 72 Conn.App. 700, 706, cert. denied, 262 Conn. 915 (2002).   As written contracts, the Loan Documents and the Guaranties are agreements to pay a debt according to stated terms.

Plaintiff opposes the blanket denial, by Borrower and Patel.   Indeed, both admit execution of the subject loan documents.   The court agrees that under the facts of this case, it is authorized to look beyond the defendants' denials to the undisputed facts of this case for purposes of deciding the motion for summary judgment.

“Courts have an inherent power to disregard ․ pleadings which have been interposed for the purpose of thwarting the orderly progress of a case.”   Friedlander v. Friedlander, 191 Conn. 81, 91, 463 A.2d 587 (1983);  Burritt Mutual Savings of New Britain v. Tucker, supra, [183 Conn. 369, 439 A.2d 396 (1981) ] 373.

In this case, defendants have failed to submit any plausible defense to the underlying debt of Borrower or the guaranty by Patel who signed all loan documents either as Manager of Borrower or, individually, as guarantor.

Plaintiff has proven all of the essential elements of the debt and defendants' obligations as Borrower and Guarantor alleged in its Complaint.   The Affidavit establishes that Borrower failed to make the monthly payments due under or in connection with the Note, Loan Agreement and Security Agreement, that Defendants executed and delivered the respective BBW Guaranty and Patel Guaranty, that the Loan Documents are in default and provides detailed and accurate debt calculations through February 1, 2013.   The court agrees with the plaintiff that Connecticut law requires that Defendants be held to the terms of Loan Documents, including the obligations of the guarantors.   See American Express Centurion Bank v. Head, 115 Conn.App. 10, 16, 971 A.2d 90 (2009) [“The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages”].

The guarantees must be interpreted according to the language of the document.   There is no support for defendants' argument that “the scope of the guarantees is a matter and question of intent.   As noted above, this argument by defendants is contrary to applicable law.   Defendants further argue, “To make things more complicated, the personal guarantor is from India and not proficient in the English language.”   This statement, even taken as true, does not raise a material fact which would affect the outcome of the case.   General statements attempting to assert credibility are insufficient to raise an issue of fact.

In summary, the guarantor does not raise any bona fide defense to the debt or her obligation as guarantor.   Rather, she claims that she thought she was only responsible for any residual delinquency after liquidation of the collateral.   The right to possession of the personalty descriged in the law is one of the remedies available to the Lender upon default.   It is however, not the only remedy and nothing in the loan documents suggests that the lender must first satisfy any debt by taking possession of the property.

III. CONCLUSION

For all of the foregoing reasons, Plaintiff's Motion for Summary Judgment is granted as to liability on all counts of the complaint, and the amount due on the loan.   Plaintiff has alleged that it is entitled to submit a claim for attorneys fees.   Such a request must be submitted by separate motion, and affidavits in order to obtain an order from the court.

SOMMER, J.

FOOTNOTES

FN1. The Loan Documents reflect that Patel signed the Note and Loan Agreement as Borrower's Manager..  FN1. The Loan Documents reflect that Patel signed the Note and Loan Agreement as Borrower's Manager.

FN2. The copies of the Loan Documents attached to the Exhibits Certification are certified as being true and accurate copies in the Affidavit..  FN2. The copies of the Loan Documents attached to the Exhibits Certification are certified as being true and accurate copies in the Affidavit.

Sommer, Mary E., J.