Opinion
Civil File No. 00-2467 (PAM/JGL).
April 13, 2001.
MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff Winthrop Resources Corporation's Motion for Summary Judgment. For the reasons that follow, the Court grants the Motion. BACKGROUND The facts of this case are undisputed. Plaintiff Winthrop Resources Corporation ("Winthrop") is a financial services company that specializes in leasing computer systems and other high-tech equipment. Defendant Transit Group, Inc. ("TGI") is a trucking business that uses satellite equipment to monitor the locations of trailers, tractors, and loads of customer goods. On October 26, 1999, the parties entered into a written Lease Agreement whereby Winthrop purchased satellite equipment, which Winthrop then leased to TGI.
The Lease Agreement specifies that payments for the equipment are due no later than the first day of each month during the term of the lease. (Gendler Aff. Ex. A ¶ 3.) The Agreement further provides that non-payment for a period of ten days constitutes default by TGI. (Id. ¶ 16(1).) Upon such default, Winthrop is, among other things, entitled to: (1) recover all accrued and unpaid rent; (2) recover all rents and other amounts as and when they become due; (3) accelerate and cause to become immediately due and payable all rents and other amounts due and/or likely to become due; (4) repossess the equipment and terminate the Lease; (5) cause to become immediately due and payable and to recover from TGI the Casualty Loss Value of the equipment; and/or (6) pursue any other remedy it may otherwise have at law, equity, or under any statute and recover damages and expenses incurred by reason of the default. (Id. ¶ 17.)
Since entering into the Lease Agreement, Winthrop has provided TGI with tens of thousands of dollars worth of satellite equipment. It is undisputed that TGI has defaulted on payments for much of the equipment. As a result, Winthrop now seeks to recover under the default provisions of the Lease Agreement. Winthrop also seeks attorneys' fees and costs pursuant to paragraph 18 of the Lease Agreement.
DISCUSSION
A. Standard
Summary judgment is proper if there are no disputed issues 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 (1986); Unigroup, Inc. v. O'Rourke Storage Transfer Co., 980 F.2d 1217, 1219-20 (8th Cir. 1992). The Court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). However, as the United States Supreme Court has stated, "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action." Celotex, 477 U.S. at 327 (quotation omitted).
The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enterprise Bank, 92 F.3d at 747. The nonmoving party must demonstrate the existence of specific facts in the record that create a genuine issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Krenik, 47 F.3d at 957.
B. Merits
Winthrop argues that it is entitled to summary judgment because TGI has admittedly defaulted on its obligations under the Lease Agreement. TGI does not contest that liability. Rather, TGI argues that the Lease Agreement's penalty provisions, under which Winthrop may repossess the equipment and recover the full accelerated amounts due for the duration of the lease, are unconscionable and therefore unenforceable.
As both parties correctly note, under Minnesota law, a contract will be deemed unconscionable, and therefore unenforceable, if it is "such as no man in his sense and not under delusion would make on the one hand, and as no honest and fair man would accept on the other." In re Hoffbeck, 415 N.W.2d 447, 449 (Minn.Ct.App. 1988). In this case, the Court cannot find the penalty provisions at issue unconscionable. First, TGI is a sophisticated corporate entity. If TGI did not wish to be bound by what it now contends are unconscionable terms of the Lease Agreement, it should have negotiated those terms out of the Agreement. The Court will not "rewrite the contract in order to save [TGI] from its own poor decision." LaSociete Generale Immobiliere v. Minneapolis Cmty. Dev., 44 F.3d 629, 637 (8th Cir. 1994).
Second, there is no evidence that TGI was "under delusion" at the time of entering into the Lease Agreement or that the Agreement was effected through fraud or duress. See Hoffbeck, 415 N.W.2d at 449. Finally, Minn. Stat. § 336.2A, subd. 1, expressly provides that as a remedy for default, a lessor may retain the goods and recover damages or rent and may "exercise any other rights or pursue any other remedies provided in the lease contract." The Court will not hold unconscionable remedies expressly authorized by the Minnesota legislature. Accordingly, Winthrop's Motion for Summary Judgment is granted.
CONCLUSION
For the foregoing reasons, and upon all of the files, records, and proceedings herein, the Court grants Winthrop's Motion for Summary Judgment. Accordingly, IT IS HEREBY ORDERED that Plaintiff Winthrop Resources Corporation's Motion for Summary Judgment (Clerk Doc. No. 5) is GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY.