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Quality Leasing Co. Inc. v. Shumate

United States District Court, N.D. Indiana, Hammond Division

July 10, 2019

QUALITY LEASING CO., INC., Plaintiff,
v.
FRANK THOMAS SHUMATE, JR. and MARK W. LOPEZ, Defendants.

          OPINION AND ORDER

          THERESA L. SPRINGMANN CHIEF JUDGE

         On May 24, 2018, Defendants Frank Thomas Shumate, Jr., and Mark W. Lopez filed a Motion to Dismiss for Lack of Jurisdiction [ECF No. 16], pursuant to Fed.R.Civ.P. 12(b)(1), asking the Court to abstain under the doctrine established in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). On July 5, 2018, after having been granted an extension, the Plaintiff filed a response [ECF No. 26]. On July 19, 2018, the Defendants filed a reply [ECF No. 30], and on August 17, 2018, after the Court granted approval, the Plaintiff filed a sur-reply [ECF No. 35]. The case was then reassigned from the docket of the late Judge Rudy Lozano [ECF No. 36].

         BACKGROUND

         In 2015, the Plaintiff entered into a Master Lease Agreement with Cinch Energy Services, LLC. The Master Lease Agreement arranged for the Plaintiff to acquire commercial equipment and lease it back to Cinch Energy. The Defendants each signed a contract guaranteeing Cinch Energy's obligations under the Master Lease Agreement (“Guaranty Contracts”). The Guaranty Contracts provide, in relevant part:

the undersigned (if more than one, then jointly and severally) as a direct and primary obligation, absolutely and unconditionally, guarantees to the Lessor . . . the prompt payment of all rent and other amounts to be paid by Lessee to Lessor under the Agreement(s) and the performance of all terms, conditions, covenants and obligations of each and every of the Agreement(s), irrespective of any invalidity or unenforceability thereof or the existence of security for the Agreement(s).
* * *
The obligations of each Guarantor hereunder shall in no way be affected or impaired by reason of the occurrence from time to time of any of the following with respect to the Master Lease, Supplement, or this Personal Guaranty (collectively, the “Instruments”) . . .
* * *
(iii) The supplementing, modification or amendment (whether material or otherwise) of any of the Instruments or any of the obligations of the Lessee or Guarantor as set forth in the Instruments;
* * *
(v) The voluntary or involuntary liquidation, dissolution, sale of all or substantially all of the property . . . or other similar application or proceeding affecting Lessee, Guarantor or any of their assets;
(vi) The sale, transfer or conveyance of the Equipment or any interest therein to any party, whether now or hereafter having or acquiring an interest in the Equipment;
(vii) The release of Lessee from the performance or observance of any of the agreements, covenants, terms or conditions contained in the Master Lease, Supplement, ...

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