IBERIABANK v. Brucker

IBERIABANK, Plaintiff.

v. EDWARD E. BRUCKER; WFFU FUNDING, INC.; RUTH BRUCKER, individuallyand as Executor of the Estate of Alan Brucker; EMAP PARTNERS, LLC;BRUCKER FAMILY PARTNERSHIP; ISADORE AND MAE BRUCKER FAMILY PARTNERSHIP;MAE BRUCKER; MICHAEL BRUCKER; ISIDOR BRUCKER; and ART HORIZONS, INC.,f/k/a FPE ACQUISITION COMPANY; Defendants.

2:12-cv-02349-JPM-tmp

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

SO ORDERED: May 1, 2013

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Before the Court is Plaintiff's Motion for Summary Judgment, filed December 31, 2012. (ECF No. 45.) On March 1, 2013, Defendants¹ filed a Response offering no opposition to — but not consenting to — Plaintiff's Motion for Summary Judgment. (ECF No. 67.)

For the following reasons, Plaintiff's Motion for Summary Judgment is GRANTED.

I. Background

This case concerns a breach-of-contract claim arising from Defendants' failure to repay indebtedness on multiple loans issued by Plaintiff IBERIABANK ("Iberia" or "Plaintiff").² (See Pl.'s Compl., ECF No. 1, at 1-2.)

The following facts are undisputed.³ On February 23, 2009, Plaintiff and Defendants entered into a Loan Agreement (Pl.'s Ex. 1, ECF No. 46-1), for which Defendants executed two promissory notes payable to Plaintiff in the amount of $5,702,636.00 ("$5.7MM Note"), and in the amount of $700,000.00 ("$700K Note") (collectively "February Loan Documents"). (Pl.'s Statement Undisputed Material Facts ("Pl.'s Stmt."), ECF No. 45-2, ¶¶ 15-17.) The principal amounts of the notes were due in full on February 22, 2010. (Pl.'s Exs. 2-3, ECF Nos. 46-2 to - 3.)

On July 30, 2010, Plaintiff and Defendants entered into another Loan Agreement (Pl.'s Ex. 6, ECF Nos. 46-19 to -21), for which Defendants executed a promissory note payable to Plaintiff for $1,000,000.00 ("$1MM Note") (collectively "July Loan Documents"). (Pl.'s Stmt., ECF No. 45-2, ¶¶ 22-23.) ThePrincipal amount of the $1MM Note was due in full on May 30, 2011. (Pl.'s Ex. 7, ECF No. 46-22.)

On July 30, 2010, Defendants entered into a modification agreement to modify the February Loan Documents and July Loan Documents. (Pl.'s Stmt., ECF No. 45-2, ¶ 25.) This modification agreement extended the maturity date of both the $5.7MM Note and $700K Note from February 22, 2010, to February 21, 2011. (Pl.'s Ex. 9, ECF No. 46-26.)

On October 27, 2010, Defendants executed a promissory note payable to Plaintiff for $500,000.00 ("$500K Note"). (Pl.'s Stmt., ECF No.45-2, ¶ 26.) The principal amount of the $500K Note was due in full on February 24, 2011. (Pl.'s Ex. 10, ECF No. 46-27.) Further, on October 27, 2010, Plaintiff and Defendants entered into a second modification agreement to modify the February Loan Documents and the July Loan Documents. (Pl.'s Stmt., ECF No. 45-2, ¶ 27; Pl.'s Ex. 11, ECF No. 46-28.)

On February 23, 2011, Plaintiff and Defendants entered into two Forbearance/Extension/Modification ("FEM") Loan Agreements extending the maturity date of the $5.7MM Note and $700K Note to April 21, 2011. (Pl.'s Stmt., ECF No. 45-2, ¶¶ 28-29; Pl.'s Exs. 12-13, ECF Nos. 46-29 to -30.) On that same date, Plaintiff and Defendants entered into another FEM Loan Agreement extending the maturity date of the $500K Note to April 24, 2011.(Pl.'s Stmt., ECF No. 45-2, ¶ 30; Pl.'s Ex. 14, ECF No. 46-31.)⁴

On June 15, 2011, Plaintiff and Defendants entered into a third agreement to modify the February Loan Documents and July Loan Documents. (Pl.'s Stmt., ECF No. 45-2, ¶ 32.) This third modification agreement extended the maturity dates of the $5.7MM Note, $700K Note, $1MM Note, and $500K Note to July 31, 2011. (Pl.'s Ex. 16, ECF No. 46-34, at 3.)

On September 1, 2011, Plaintiff and Defendants entered into a fourth FEM Loan Agreement, extending the maturity dates of the $1MM Note, the $5.7MM Note, the $700K Note, and the $500K Note to September 15, 2011. (Pl.'s Stmt., ECF No. 45-2, ¶¶ 33-36; Pl.'s Exs. 17-20, ECF Nos. 46-35 to -38.) Defendants failed to pay the outstanding obligations under the various loan agreements and notes on or before September 15, 2011. (Pl.'s Stmt., ECF No. 45-2, ¶ 37.) On January 19, 2012, Plaintiff sent letters to Defendants demanding payment for the outstanding obligations. (Id.)

Subsequently, on March 5, 2012, Plaintiff and Defendants entered into a fifth FEM Loan Agreement extending the maturity dates of Defendants' outstanding obligations to March 31, 2012.⁵ (Id. ¶ 38; Pl.'s Ex. 21, ECF Nos. 46-39 to -40.) Defendants failed to pay the outstanding indebtedness due under the various loan agreements, notes, and modification agreements on or before March 31, 2012. (Pl.'s Stmt., ECF No. 45-2, ¶¶ 39-40.) As of the filing of the instant Motion, the $5.7MM Note, $1MM Note, and $500K Note remained unpaid. (See Id. ¶ 41.)

Plaintiff asserts that Defendants' failure to pay this outstanding indebtedness amounts to a breach of contract for which Plaintiff is entitled to damages. (ECF No. 45-1 at 3-4.) Plaintiff further asserts that there is no genuine dispute as to any material fact related to its claim for breach of contract and Plaintiff is, therefore, entitled to judgment as a matter of law. (Id. at 2-3.)

II. Standard of Review

Under Federal Rule of Civil Procedure 56(a), summary judgment is proper if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Chapman v. UAW Local 1005, 670 F.3d 677, 680 (6th Cir. 2012). "A fact is 'material' for purposes of summary judgment if proof of that fact would establish or refute an essential element of the cause of action or defense." Bruederle v. Louisville Metro Gov't, 687 F.3d 771, 776 (6th Cir. 2012). "A dispute over material facts is genuine if the evidence is such that areasonable jury could return a verdict for the nonmoving party." Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986)) (internal quotation marks omitted).

"The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact." Mosholder v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2012) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The movant must support an assertion that a fact is not genuinely disputed by citing to "the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A).

In Defendants' Response to Plaintiff's Motion for Summary Judgment, Defendants did not respond to Plaintiff's Statement of Undisputed Facts. (See ECF No. 67.) Under Federal Rule of Civil Procedure 56(e), a court may "consider [a] fact undisputed for purposes of [summary judgment]" if the non-moving party "fails to properly address [the moving] party's assertion of fact as required by Rule 56(c)." Fed. R. Civ. P. 56(e), (e)(2). Further, pursuant to Local Rule 56.1, "[f]ailure to respond to a moving party's statement of material facts . . . shall indicate that the asserted facts are not disputed for purposes of summary judgment." LR 56.1(d). Therefore, the Court accepts Plaintiff's facts as "undisputed for purposes of" Plaintiff'sMotion for Summary Judgment to the extent they are properly supported under Federal Rule 56(c). See Fed. R. Civ. P. 56 (c),(e)(2); LR 56.1(d); see also Iqbal v Pinnacle Airlines, Inc., 802 F. Supp. 2d 909, 914-15 (W.D. Tenn. 2011).

When the non-moving party fails to respond to a motion for summary judgment, the district court "is required, at a minimum, to examine the movant's motion for summary judgment to ensure that he has discharged [his] burden." Delphi Auto. Sys., LLC v. United Plastics, Inc., 418 F. App'x 374, 381 (6th Cir. 2011) (quoting Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir. 1991)) (internal quotation marks omitted). Furthermore "[i]n considering a motion for summary judgment, [a court] must draw all reasonable inferences in favor of the nonmoving party." Phelps v. State Farm Mut. Auto. Ins. Co., 680 F.3d 725, 730 (6th Cir. 2012) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). "The central issue is 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Id. (quoting Anderson, 477 U.S. at 251-52).

III. Analysis

A federal court sitting in diversity applies "state substantive law and federal procedural law." Degussa Admixtures, Inc. v. Burnett, 277 F. App'x 530, 532 (6th Cir.2008) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). Further, in diversity matters, a federal court must apply the choice-of-law rules of the forum state. Andersons, Inc. v. Consol, Inc., 348 F.3d 496, 501 (6th Cir. 2003) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). "Tennessee follows the rule of lex loci contractus, meaning that a contract is presumed to be governed by the law of the jurisdiction in which it was executed absent a contrary intent . . . ." Carbon Processing & Reclamation, LLC v. Valero Mktg. & Supply Co., 823 F. Supp. 2d 786, 801 (W.D. Tenn. 2011) (quoting Se. Texas Inns, Inc. v. Prime Hospitality Corp., 462 F.3d 666, 672 n.8 (6th Cir. 2006)) (internal quotation marks omitted). Tennessee courts will, however, "honor a choice of law clause if the state whose law is chosen bears a reasonable relation to the transaction . . . ." Bourland v. Heaton, No. W2011-01693-COA-R3-CV 2012 Tenn. App. LEXIS 226, at *8 (Tenn. Ct. App. 2012) (quoting Wright v. Rains, 106 S.W.3d 678, 681 (Tenn. Ct. App. 2003)) (internal quotation marks omitted).

There is no dispute that the Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1332 as the parties are diverse and the amount in controversy exceeds the sum of $75,000. In addition, there is no dispute that Tennessee law governs the various loan agreements,...