1ST Source Bank v. Vill. of Stevensville, Cause No. 3:11–CV–205–TLS.

• Decision Date: 23 May 2013
• Docket Number: Cause No. 3:11–CV–205–TLS.
• Citation: 947 F.Supp.2d 934
• Parties: 1ST SOURCE BANK, Plaintiff, v. VILLAGE OF STEVENSVILLE, et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

947 F.Supp.2d 934

1ST SOURCE BANK, Plaintiff,

v.VILLAGE OF STEVENSVILLE, et al., Defendants.

Cause No. 3:11–CV–205–TLS.

United States District Court, Northern District of Indiana.

May 23, 2013.

John David Ladue, Paul E. Harold, Robert John Kuehn, III, Ladue Curran & Kuehn LLC, South Bend, IN, for Plaintiff.

Robert A. Callahan, Plunkett Cooney PC, Kalamazoo, MI, for Defendants.

OPINION AND ORDER

THERESA L. SPRINGMANN, District Judge.

This matter is before the Court on the Plaintiff's Motion for Summary Judgment On Its Breach–Of–Contract Claim [ECF No. 69] filed on May 9, 2012. The Defendants, the Village of Stevensville and the Village of Stevensville Downtown Development Authority, filed their Response in Opposition to Plaintiff's Motion for Summary Judgment [ECF No. 70] and their Cross–Motion for Summary Judgment [ECF No. 71] on June 5, 2012. The Defendants' Cross–Motion asserts that they are entitled to summary judgment on the Plaintiff's claims of (1) breach of contract and (2) unjust enrichment. Thereafter, the Plaintiff filed its Consolidated Summary–Judgment Reply and Response [ECF No. 76] and a Rule 56 Motion to Strike Inadmissible Evidence [ECF No. 77] on July 5, 2012. The Defendants filed their Response in Opposition to Plaintiff's Rule 56 Motion to Strike Inadmissible Evidence [ECF No. 80] and their Sur–Reply Brief in Opposition to Plaintiff's Motion for Summary Judgment and Reply Brief in Support of Motion for Summary Judgment [ECF No. 81–1] on July 20, 2012. On July 30, 2012, the Plaintiff filed its Reply in Support of Plaintiff's Rule 56 Motion to Strike Inadmissible Evidence [ECF No. 83]. The parties have fully briefed the relevant issues and the Court has reviewed their pleadings.

For the reasons that follow, the Court finds that the Defendants are obligated to repay the loan proceeds to the Plaintiff. Although the Court resolves the question of liability in favor of the Plaintiff, an evidentiary hearing and/or additional briefing will be necessary to determine damages.

BACKGROUND

This diversity action arises out of a series of loans made by the Plaintiff, 1st Source Bank, to the Village of Stevensville, Michigan (the Village) and the Village of Stevensville Downtown Development Authority (DDA) (collectively Stevensville). In 2010, the Village and the DDA defaulted on those loans. The Plaintiff, a bank organized and existing under the laws of Indiana and located in Indiana, brought the present suit to enforce its rights under the loan agreements.

LEGAL STANDARD

A court “shall grant summary judgment 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). Summary judgment is the moment in litigation where the non-moving party is required to marshal and present the court with evidence on which a reasonable jury could rely to find in her favor. Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir.2010). The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also N.D. Ind. L.R. 56–1(a) (stating that the movant must provide a “ ‘Statement of Material Facts' that identifies the facts that the moving party contends are not genuinely disputed”). In response, the nonmoving party cannot rest on bare pleadings alone but must use the evidentiary tools listed in Rule 56 to designate specific material facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548;Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir.2000); N.D. Ind. L.R. 56–1(b) (directing that a response in opposition to a motion for summary judgment must include “a section labeled ‘Statement of Genuine Disputes' that identifies the material facts that the party contends are genuinely disputed so as to make a trial necessary”).

The court's role in deciding a motion for summary judgment “is not to sift through the evidence, pondering the nuances and inconsistencies, and decide whom to believe. The court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial.” Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir.1994). A district court should deny a motion for summary judgment only when the non-moving party presents admissible evidence that creates a genuine issue of material fact. Luster v. Ill. Dep't of Corrs., 652 F.3d 726, 731 (7th Cir.2011) (citing United States v. 5443 Suffield Terrace, 607 F.3d 504, 510 (7th Cir.2010); Swearnigen–El v. Cook Cnty. Sheriff's Dep't, 602 F.3d 852, 859 (7th Cir.2010)). Material facts are those that are outcome determinative under the applicable law. Smith v. Severn, 129 F.3d 419, 427 (7th Cir.1997). “Irrelevant or unnecessary facts do not deter summary judgment, even when in dispute.” Harney v. Speedway SuperAmerica, LLC, 526 F.3d 1099, 1104 (7th Cir.2008). Additionally, a court is not “obliged to research and construct legal arguments for parties, especially when they are represented by counsel.” Nelson v. Napolitano, 657 F.3d 586, 590 (7th Cir.2011).

PLAINTIFF'S MOTION TO STRIKE

The Plaintiff requests that the Court strike: (1) the Defendants' Statement of Material Facts; (2) the Defendants' allegations that Defendant Gardner embezzled money from the Village; and (3) the legal-opinion letters submitted to the Court by the Defendants as designated evidence in support of their Motion for Summary Judgment. (Pl.'s Mot. to Strike 1, ECF No. 77.) In the Plaintiff's view, the Defendants' Statement of Material Facts and allegations concerning Defendant Gardner's embezzlement are unsupported by any facts in evidence. ( Id. 2–4.) The Plaintiff contends that the legal-opinion letters submitted by the Defendants are inadmissible hearsay. ( Id. 4–5.)

A. The Defendants' Statement of Material Facts

The Defendants' Brief in Opposition to the Plaintiff's Motion for Summary Judgment contains the following Statement of Material Facts:

1) That the Village and the DDA are municipal corporations pursuant to Michigan Law;

2) That as a municipal corporation, the Defendants were required to have authority to enter into a loan transaction with 1st Source Bank;

3) That 1st Source Bank did not exercise its own due diligence to independently ascertain whether the Village was authorized to enter into the loan transactions at issue in this lawsuit;

4) That the former Village Manager, Todd Gardner, embezzled funds received by loan from 1st Source, and is now in federal prison as a result of his conviction;

5) That neither the Village nor the DDA was not authorized, by law, to enter into the loan transaction with 1st Source;

6) That the loan contracts between 1st Source and the Village/DDA are void and 4 unenforceable as a matter of law, and can not (sic) be repaid.

(Defs.' Br. in Opp'n 2–3, ECF No. 70.) The Plaintiff maintains that this entire section should be stricken because the statements are legal conclusions rather than statements of fact. (Pl.'s Mot. to Strike 2–3.) In their Response, the Defendants assert that “[t]he issue in this case is primarily legal-whether the loans at issue were authorized pursuant to Michigan statute, and if not, pursuant to law whether the loans are void and unenforceable.” (Defs.' Br. in Opp'n to Pl.'s Mot. to Strike 1, ECF No. 80.) Continuing, the Defendants state that “[t]hose arguments, and the facts necessary to address those arguments, have been adequately and properly presented” by the Defendants. ( Id.) In its Reply, the Plaintiff emphasizes that the Defendants' Statement of Material Facts “contains nothing but legal arguments and conclusory allegations, neither of which are admissible to support or oppose a motion for summary judgment.” (Pl.'s Reply Br. Supporting Pl.'s Mot. to Strike 1, ECF No. 83.)

Under Local Rule 56–1, any party moving for summary judgment must submit a statement of material facts as to which that party contends there is no genuine issue. The purpose of Rule 56–1 statements is to identify the relevant evidence supporting the material facts, not to make factual or legal arguments. See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir.2006). In reviewing a party's statement of material facts, a court must “eliminate from consideration any argument, conclusions, and assertions that are unsupported by the documented evidence of record offered in support of the statement.” Phillips v. Quality Terminal Servs., LLC, 855 F.Supp.2d 764, 771 (N.D.Ill.2012). The Seventh Circuit has consistently held that district courts may mandate and enforce strict compliance with Local Rule 56–1. See Ammons v. Aramark Uniform Servs., Inc., 368 F.3d 809, 817 (7th Cir.2004); Metro. Life Ins. Co. v. Johnson, 297 F.3d 558, 562 (7th Cir.2002); Bordelon v. Chi. Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir.2000); Waldridge, 24 F.3d at 922.

The Court agrees with the Plaintiff that the Defendants' Statement of Material Facts contains many statements that are legal conclusions and not factual assertions. Consequently, the Court will disregardStatements Two, Three, Five, and Six for purposes of ruling on the parties' motions for summary judgment. These statements are legal arguments and “any statements or responses that contain legal conclusions or argument ... will not be considered by the Court in ruling on the summary judgment motions.” Phillips, 855 F.Supp.2d at 771–72.See also Malec v. Sanford, 191 F.R.D. 581, 583 (N.D.Ill.2000) (holding that where a party offers a legal conclusion in a statement of fact, the Court will not consider that statement). However, the Court will consider Statement One in ruling on the summary judgment motions, which provides that the Defendants are municipal corporations pursuant to Michigan law. This is a factual statement with ample evidentiary support in the record.

The...