Opinion
Civil Action No. 99-1564 Section "B"(3)
June 9, 2000
ORDER AND REASONS
This matter came before the Court for oral argument on April 26, 2000 in consideration of Plaintiff Bombardier Capital, Inc.'s Motion for Partial Summary Judgment (Rec. Doc. No. 27). The following counsel were present at the hearing: Leaun O. Moses representing the plaintiff. There was no appearance by counsel for the defendants. After considering the pleadings, the law, and the argument of counsel, the Court finds that the motion should be granted.
BACKGROUND.
This is a breach of contract case. Plaintiff Bombardier and Defendant Hammond Boating, Inc. (HBI) are parties to an Inventory Security Agreement and Power of Attorney Contract dated May 10, 1994, as well as a First Amendment to that Contract dated April 25, 1994 and a Louisiana Addendum dated February 29, 1996. Bombardier loaned money to HBI to finance the acquisition of inventory for HBI's business located at 14311 Club Deluxe Road in Hammond, Louisiana. HCI ordered and Bombardier paid for inventory from Sun Belt Marine, Inc., Bayliner Marine Corp., Maxum, and Wahoo!Boats over a four year period from 1996 through 1999 Bombardier sent HBI a monthly schedule at the end of each month showing (1) each item of inventory on which it advanced funds, (2) the model and serial number of each item of inventory, (3) the inventory number for each advance. (iv) the date of each invoice, and (v) the amount of each advance. Under the contract, HBI was to sell the inventory and repay Bombardier immediately when each item was sold.
Douglas Glascock and Judi Glascock executed an unconditional guaranty dated May 10, 1994, in which each agreed to be jointly, severally, and solidarily obligated for any indebtedness of HBI to Bombardier. On August 13, 1990, Bombardier filed a UCC-1 Filing Statement in the Parish of East Baton Rouge under file number 17-1063038, which covered all inventory the purchase of which was financed or floorplanned by Bombardier.
Movant's (Bombardier Capital, Inc.) Contentions:
Bombardier claims that HBI breached the terms of the contract. The contract provided that Bombardier would advance money to HBI and that HBI would repay the money:
At the Dealer's request, BCI, at its option, will advance funds for the acquisition of the Dealer's Inventory ("Inventory"), or for such other purpose satisfactory to BCI, secured, in whole or in part, by a security interest in the Collateral described in Paragraph 4 below. In each case, BCI will send Dealer a schedule or schedules as described in Paragraph 3 below. If Dealer does not agree with the schedule(s), it must immediately notify BCI in writing of its objections. Dealer's failure to notify BCI within (7) days shall constitute an acceptance of the schedule(s).
The payment agreement was as follows:
Dealer shall repay BCI in accordance with either or a combination of the following Plans, which shall be chosen at the sole discretion of BCI
a) Pay As Sold Plan: BCI shall deliver to Dealer a schedule or schedules listing each item of Inventory on which BCI has advanced funds and the amount of the advance. Immediately upon the sale of each item of Inventory, Dealer will pay to BCI the total amount due on that item. Dealer will pay to BCI the total amount due on unsold Inventory within the period established from time to time by BCI or upon demand by BCI, whichever first occurs and will pay such curtailments as BCI may require.
b) Scheduled Payment Plan: BCI shall deliver to Dealer a schedule or schedules listing the repayment terms for the Inventory on which it has advanced funds and the amount of the advance. Dealer will thereafter pay to BCI the payment due, when due or upon demand by BCI, whichever comes first, as shown on the schedule(s) BCI supplies Dealer.
If HBI breached or failed to observe any of its obligations, covenants or undertakings, HBI would be deemed to have defaulted on the loan. Upon default, BCI could demand immediate payment of all obligations under the agreement.
Bombardier contends that HBI breached the contract in two ways. First, HBI sold a number of items and converted the proceeds of the sales for its own account instead of holding the money in trust for Bombardier or immediately paying Bombardier Second, HBI invoiced Bombardier for $23,781.25 worth of inventory that was being housed in Jennings, Louisiana at Jennings Boating Center, instead of being housed in HBI's place of business The contract provides that HBI was to "keep all of the collateral only at its place(s) of business," which is 14311 Club Deluxe Road, Hammond, Louisiana. Because HBI defaulted on the loan, Bombardier claims that HBI owes it the total principle sum plus interest, attorneys' fees, and costs. Bombardier notes that HBI has not and cannot contradict the statements in the affidavits which establish the amounts owed to Bombardier. HBI's answer offers only a general denial to Bombardier's claims. The defense of payment must be plead as an affirmative defense and proven by the party pleading the defense. This has not happened in this case.
Bombardier also contends that the other defendants are jointly, severally, and solidarily liable with HBI because they executed unconditional guaranties. J. Glas Ltd. executed an unconditional guaranty on September 6, 1996, and Douglas and Judi Glas executed an unconditional guaranty on May 10, 1994. In their answer, they offer nothing more than a general denial of Bombardier's allegations. Bombardier argues that a general denial is insufficient to constitute a denial of the defendants' signatures that appear on the guaranties. The insufficiency of the denials and the lack of genuine issues of material fact make this matter appropriate for summary judgment.
Finally, Bombardier claims that it is entitled to recognition and enforcement of its purchase money security interest in HBI's inventory. It claims that a creditor who holds a purchase money security interest enjoys a "superiority" status pursuant to La.R.S. § 10.9-312(3) and Nat'l Bank of Boston v. Beckwith Machinery Co., 650 So.2d 1148, 1157 (La. 1995). Louisiana Revised Statute Section 10:9-107 defines a "purchase money security interest."
A security interest is a "purchase money security interest" to the extent that it is (a) taken or retained by the seller of the collateral to secure all or part of its price; or (b) taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of such collateral if such value is in fact so used.
Bombardier cites La.R.S. §§ 10:9-302, 9:401 and 9:402 when contending that a purchase money security interest is perfected by filing a UCC-1 financing statement with the clerk of court of any parish. Bombardier claims that it filed the UCC-1 financing statement on August 13, 1990. It made advances to HBI after that filing in order to finance HBI's acquisition of boats, engines, and other inventory for HIB's business location at 14311 Club Deluxe Road. Because the UCC-1 statement was filed in 1990, Bombardier's purchase money security interest in this inventory was perfected at the time each of the advances was made.
Defendants' Contentions:
The defendants respond that the motion is premature. They claim that because of direct payments made by the defendants as well as other offsets and compromises due to the transfer of inventory back to Bombardier or other suppliers, the original indebtedness of $512,724.00, plus interest, has been reduced. The defendants point out that the plaintiff now only claims that $122,000.00 is due and payable. The defendants argue that the parties have an understanding and compromise. They also challenge the amounts due and owing. The defendants contend that the matter should be set for trial so that all credits and compromises can be presented.
Plaintiff's Reply:
The plaintiff replies that the defendants do not contest any of the material facts alleged in Susie McFaul's affidavit or the Motion for Partial Summary Judgment It cites several cases that the respondent must show the existence of a genuine issue of material fact to preclude the movant's right to receive summary judgment. Citing Nugent v. Hartford Accident Indemnity Co., 467 So.2d 623, 627 (La.App. 3d 1985), Bombardier also notes that Louisiana law requires that an agreement of transaction or compromise be in writing. The defendants have not alleged or presented a written compromise agreement Thus, Bombardier claims that the opposition is without merit
Later, Bombardier filed a supplemental memorandum in support of the motion for partial summary judgment in which Bombardier acknowledges that it received payments totaling $16,572.00 from three of HBI's guarantors, J. Glas, Ltd., Douglas Wayne Glascock, and Judi Glascock after the oral arguments in April, 2000. Accordingly, Bombardier indicates that it no longer seeks summary judgment against J. Glas, Ltd., Douglas Wayne Glascock, and Judi Glascock. Further, Bombardier received $23,781.25 from Jennings Boating Center (a third party) for inventory improperly stored on its premises by HBI. Accordingly, Bombardier no longer seeks to enforce its purchase money security interest regarding that inventory. However, HBI remains indebted to Bombardier for a total of $81,775.72, plus $41,368.44 in interest accrued as of May 30, 2000, plus interest which continues to accrue and reasonable attorneys' fees and costs. Further, Bombardier still claims it is entitled to judgment as a matter of law recognizing, maintaining and enforcing Bombardier's purchase money security interest in all of the inventory listed on Exhibit D to the affidavit of Susie McFaul and also recognizing that the purchase money security interest has priority over any conflicting security interest in the same inventory.
LAW AND ANALYSIS.
Summary judgment is proper if the pleadings, depositions, interrogatory answers and admissions, together with any affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct 2548, 2554-55 (1986). A genuine issue exists if the evidence would allow a reasonable jury to return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986). Although the Court must consider the evidence with all reasonable inferences in the light most favorable to the non-moving party, the nonmovant must produce specific facts to demonstrate that a genuine issue exists for trial. Webb v. Cardiothoracic Surgery Associates of North Texas, 139 F.3d 532, 536 (5th Cir. 1998). The nonmovant must go beyond the pleadings and use affidavits, depositions. interrogatory responses, admissions, or other evidence to establish a genuine issue. Id.
Accordingly, conclusory rebuttals of the pleadings are insufficient to avoid summary judgment. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Michaels v. Avitech, Inc., 202 F.3d 746, 754-55 (5th Cir. 2000) (inferences were insufficient to avoid summary judgment); Wilson Industries, Inc. v. Aviva America, Inc., 185 F.3d 492, 494 (5th Cir. 1999) (explaining that the nonmovant cannot satisfy his summary judgment burden with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence); Krim v. Banc Texas Group, Inc., 989 F.2d 1435, 1449 (5th Cir. 1993) (summary judgment is appropriate if "nonmoving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation").
Here, the defendants have failed to offer anything more than conclusory inferences to oppose the summary judgment. The affidavit of Ron Gautreau (the financial affairs manager for HBI as well as Douglas and Judi Glascock) is conclusory and fails to demonstrate the existence of a genuine issue of material fact. Gautreau notes that the indebtedness has been reduced significantly, he claims that the amount owed is in dispute, but he does not say to what extent the figure differs from the amount that the defendants believe they owe Further, Gautreau claims that there is a compromise agreement, and the defendants even asserted "compromise" as an affirmative defense in their answer, but no one attaches a copy or specifies the terms. The Court finds, therefore, that the defendants have failed to satisfy their summary judgment burden. Thus, the Court finds that there are no issues in dispute concerning the alleged breach of contract and that the plaintiff is entitled to summary judgment as a matter of law. Accordingly,
IT IS ORDERED that Plaintiff Bombardier Capital, Inc.'s Motion for Partial Summary Judgment (Rec Doc No 27) hereby is GRANTED as to Defendant Hammond Boating, Inc. Defendant Hammond Boating, Inc. owes Plaintiff Bombardier Capital, Inc $81,775 72, plus accrued interest as of May 30, 2000 in the amount of $41,368.44, plus interest which continues to accrue. Further, this Court recognizes and enforces Plaintiff Bombardier Capital, Inc.'s purchase money security interest, which takes priority over any conflicting security interest in the same inventory, in the following inventory:
MODEL SERIAL NUMBER (1) TEXB255800 00440
(2) TEZB308500 015523
(3) 2503FM A04FMG
(4) 2802FH A04FHLL
(5) 2I00RL A25RLD
(6) 200HP No Serial Number Given
(7) 1820RA 6288