Berkshire Bank v. Twin Tiers Aviation, Inc.

527 F.Supp.3d 101

BERKSHIRE BANK, Plaintiff,

v.TWIN TIERS AVIATION, INC., Nathan J. Cook and Nicole Allen Cook, Defendants.

CIVIL ACTION NO. 19-40057-TSH

United States District Court, D. Massachusetts.

Filed March 22, 2021

Robert B. Gibbons, Mirick, O'Connell, DeMallie & Lougee, Worcester, MA, for Plaintiff.

Edward Y. Crossmore, Pro Hac Vice, The Crossmore Law Office, Ithaca, NY, Kevin C. Cain, Sulloway & Hollis P.L.L.C, Canton, MA, for Defendants.

MEMORANDUM OF DECISOIN AND ORDER

HILLMAN, D.J.,

Background

Berkshire Bank ("Berkshire," or "Plaintiff") brings an action against Twin Tiers Aviation, Inc. ("Twin Tiers"), for failure to pay amount due and owing under a loan agreement and note, and against Nathan J. Cook ("Nathan") and Nicole Allen Cook ("Nicole" and together with Nathan) for breach of their personal guaranties. More specifically, in 2013 Twin Tiers entered into a Business Loan Agreement with Berkshire and signed a promissory note in the amount of $153,550.00. The loan was guaranteed by Nathan and allegedly, by Nicole. Beginning in August 2018, Twin Tiers failed to make the required monthly payments due on the loan and it is currently past due for all subsequent payments. Despite demand by Berkshire, Twin Tiers, Nathan and Nicole have failed to make payment on their outstanding loan obligations.

This Memorandum of Decision and Order addresses Plaintiff Berkshire Bank's Motion for Summary Judgment (Docket No. 30) pursuant to which Berkshire request judgment against Twin Tiers, Nathan and Nicole, jointly and severally, in the amount of its damages together with attorneys’ fees and costs. More specifically, Berkshire requests Summary Judgment on Counts I and II of the Complaint on the grounds that no genuine disputes of material fact exist in regard to Twin Tiers’ breach of its payment obligations under the Promissory Note. Berkshire also requests Summary Judgment on Counts III and IV of the Complaint on the grounds that no genuine disputes of material fact exist in regard to Nathan and Nicole's breach of their payment obligations under their personal guaranties. For the reasons set forth below, the motion is granted , in part, and denied , in part.

Standard of Review

Summary Judgment is appropriate if, "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

"[G]enuine issues of fact are those that a factfinder could resolve in favor of the nonmovant, while material facts are those whose ‘existence or nonexistence has the potential to change the outcome of the suit.’ " Green Mountain Realty Corp. v. Leonard , 750 F.3d 30, 38 (1st Cir. 2014) (citation to quoted case omitted)).

The moving party bears the burden of establishing that there are no genuine disputes of material fact. Wade v. Touchdown Realty Group, LLC , 386 F.Supp.3d 56, 62 (D. Mass. 2019). When considering a motion for summary judgment, "the Court must view the entire record in the light most favorable to the nonmoving party and draw all reasonable inferences in its favor." Id. (citing Farmers Ins. Exch. v. RNK, Inc. , 632 F.3d 777, 779-80 (1st Cir. 2011) ). "Once the movant has averred that there is an absence of evidence to support the non-moving party's case, the burden shifts to the non-movant to establish the existence of at least one fact in issue that is both genuine and material." Levine-Diaz v. Humana Health Care , 990 F. Supp. 2d 133, 139 (D.P.R. 2014). "[T]o withstand a properly supported motion for summary judgment, the opposing party must present ‘enough competent evidence’ to enable a factfinder to decide in its favor on the disputed claims." Carroll v. Xerox Corp. , 294 F.3d 231, 237 (1st Cir. 2002). " ‘The test is whether, as to each essential element, there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.’ " " Sensing v. Outback Steakhouse of Florida, LLC , 575 F.3d 145, 153 (1st Cir. 2009) (quoting DeNovellis v. Shalala , 124 F.3d 298, 306 (1st Cir. 1997) ).

Facts

On August 14, 2013, Twin Tiers entered into a Business Loan Agreement ("BLA") with Berkshire¹ and executed a promissory note in favor of Berkshire in the original principal amount of $153,550.00 (the "Note"). The Note was to be satisfied in one hundred forty-three (143) equal monthly installments of $1,425.79 beginning on September 14, 2013, with a final payment due on August 14, 2025. On that same date, Twin Tiers signed an aircraft security agreement (the "Security Agreement") granting Berkshire a security interest in a 1980 Cessna 340A airplane, Serial Number 340A0976, FAA Registration Number of N425RG (the "Collateral"). Berkshire duly perfected its security interest in the Collateral by recording with the Federal Aviation Administration. Also on August 14, 2013, Nathan signed a guaranty, absolutely and unconditionally guaranteeing all obligations of Twin Tiers to Berkshire under the Note (the "Nathan Guaranty"). Berkshire alleges that Nicole also signed a guaranty, absolutely and unconditionally guaranteeing all obligations of Twin Tiers to Berkshire under the Note (the "Nicole Guaranty;" collectively with the "Nathan Guaranty," the "Personal Guaranties").

Beginning with the August 2018 payment, Twin Tiers failed to make the required monthly payments due under the Note and is currently past due for all subsequent payments. Twin Tiers’ failure to make the required payments constituted a default under the loan documents thereby entitling Berkshire to accelerate the full outstanding balance due. By letter dated January 18, 2019, Berkshire provided notice to Nathan and Nicole of their payment default under the Note and Personal Guaranties, and Berkshire's acceleration of the full outstanding balance due thereunder. The letter also stated the total due under the loan documents, exclusive of legal fees and other costs of collection. Despite demand, Nathan and Nicole failed to pay the outstanding balance due under the Note and Personal Guaranties.

On May 15, 2020, Twin Tiers sold the Collateral for $65,000.00. The entire proceeds were remitted to Berkshire who terminated its security interest in the Collateral by filing a release with the Federal Aviation Administration. After application of the $65,000.00 sale proceeds, the outstanding balance due to Berkshire under the Note and Personal Guaranties as of June 10, 2020 is $47,245.02, plus subsequently accruing interest, late charges, costs and attorneys’ fees.

Discussion

Berkshire's Motion for Summary Judgment Against Twin Tiers

Berkshire moved for Summary Judgment on...