United States District Court, S.D. Indiana, Indianapolis Division
ENTRY ON PLAINTIFF'S MOTION FOR SUMMARY
RICHARDX. YOUNG, JUDGE UNITED STATES DISTRICT COURT SOUTHERN
DISTRICT OF INDIANA
breach of contract case is both ordinary and unusual. Baker
& Simmons Logistics, LLC (“BSL”) entered into
several loan and security agreements covering business
equipment. Victor Leavell and Leadrain Moore executed
separate agreements guaranteeing BSL's performance.
However, that performance did not last very long: less than a
year after executing the agreements, BSL defaulted by failing
to make minimum monthly payments. BMO Harris Bank N.A.
(“BMO”) brought the present action against BSL,
Leavell, and Moore to recover its losses under the
agreements. Leavell and Moore appeared and filed an answer;
however, BSL did not. Accordingly, BMO obtained a default
judgment against BSL. BMO now moves for summary judgment
against Leavell and Moore based on the guaranty agreements.
So far-a typical breach of contract case.
the present motion is what makes this case unusual. Despite
filing an answer, Leavell and Moore did not file a response
to BMO's motion. Accordingly, the court is required to
accept as true the facts stated by BMO. But even accepting
BMO's facts as true, there are fatal inconsistencies or
gaps within BMO's evidence. This results in several
questions of fact, and so, in its present form, BMO's
motion for summary judgment must be DENIED.
judgment is appropriate where there is no genuine dispute as
to any material fact and the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a); Carmody
v. Bd. of Trustees of Univ. of Illinois, 893 F.3d 397,
401 (7th Cir. 2018). The evidence and any reasonable
inferences that may be drawn from it are construed in the
light most favorable to the non-moving party. Id.
When a party does not respond to a motion for summary
judgment, the opposing party's facts are accepted as
true. See S.D. Ind. L. R. 56-1(f)(1)(A) (“In
deciding a summary judgment motion, the court will assume
that the facts as claimed and supported by admissible
evidence by the movant are admitted without controversy
except to the extent that the non-movant specifically
controverts the facts . . . .”); see also Dade v.
Sherwin-Williams Co., 128 F.3d 1135, 1137 (7th Cir.
1997) (affirming district court's grant of summary
judgment where it accepted moving party's facts as true
when non-moving party failed to respond under local rule).
entered into five different loan and security agreements with
two different lenders. (See Filing No. 31-3,
Affidavit of Sheila Aschenbrenner at 2 ¶¶ 4, 5).
Three of the agreements were with General Electrical Capital
Corporation (“GE Capital”). (Id. at 16,
Ex. B; 22, Ex. C; 28, Ex. D). Two of the agreements were with
Transportation Truck and Trailer Solutions, LLC
(“TTTS”). (Id. at 34, Ex. E; 40, Ex. F).
Leavell and Moore each executed separate
agreements (collectively the “Guaranty
Agreements”) guaranteeing BSL's performance.
(Id. at 5 ¶¶ 15, 16). In all but one of
the Guaranty Agreements, the guarantor guarantees to GE
Capital that BSL will perform its obligations to GE
Capital. (See e.g. Ex. G).
November 3, 2016, BMO was assigned the rights of five BSL
accounts. (Id. at 10, Ex. A, Transfer
Acknowledgement). The Transfer Acknowledgement provides that
Transportation Truck assigns the rights of five BSL accounts
to BMO. (Id.). However, GE Capital is not a
signatory to the Transfer Acknowledgement. (See
breach of contract claim under Indiana law requires the
plaintiff to prove the existence of a contract, the
defendant's breach of that contract, and resulting
damages. Haegert v. Univ. of Evansville, 977 N.E.2d
924, 937 (Ind. 2012). Guaranties are conditional promises to
answer for the debt of another, and so, they are governed by
the same rules applicable to contracts. TW General
Contracting Servs. Inc. v. First Farmers Bank &
Trust, 904 N.E.2d 1285, 1288 (Ind.Ct.App. 2009)
theory of the case is simple: (1) BSL entered into loan
agreements with GE Capital and TTTS; (2) Leavell and Moore
guaranteed BSL's performance under those agreements; (3)
BSL defaulted on those agreements; (4) GE Capital and TTTS
assigned its rights to BMO; and, thus, (5) Leavell and Moore
are liable to BMO for BSL's default through the Guaranty
problem comes at step 4 of BMO's theory: there is no
evidence that GE Capital assigned its rights under
the agreements to BMO or to TTTS. There is also no evidence
of a relationship or affiliation between GE Capital and TTTS.
The only evidence of assignment is the Transfer
Acknowledgement, which is signed and executed by TTTS, not GE
Capital. While the Transfer Acknowledgement includes five
accounts and the account numbers correspond with the
underlying loan and security agreements, there is no evidence
that GE Capital, the lender on three of the loan and security
agreements, assigned its rights in those agreements to TTTS
or BMO. See e.g. BMO Harris Bank N.A. v. In & Out
Leasing, LLC, NO. 16-CV-02655, 2018 WL 525608, at *1 (D.
Colo. Jan. 24, 2018). Accordingly, at least on the record
presently before the court, there is a question of fact as to
whether BMO has rights in three of the loan and security
agreements issued by GE Capital.
issue is compounded when looking at the guaranties signed by
Leavell and Moore-the basis for the present motion. Three of
the guaranties only apply to GE Capital. The fourth guaranty
applies both to GE Capital and TTTS. Because there is no
evidence-either presented in an agreement, an affidavit, or
otherwise-that explains that GE Capital assigned its rights
to TTTS or BMO, there is a question of fact whether BMO can
assert the rights under the guaranties. Flaherty
& Collins, Inc. v. BBR-Vision I, L.P., 990 N.E.2d
958, 971 (Ind.Ct.App. 2013) (citation omitted)
(“Generally, only those who are parties to a contract,
or those in privity with a party, have the right to recover
under a contract.”).
motion for summary judgment also falters on another element:
damages. It is axiomatic that a plaintiff must prove damages
to a reasonable degree of certainty. Entm't USA, Inc.
v. Moorehead Commc'ns, Inc., 897 F.3d 786, 793 (7th
Cir. 2018) (noting ...