Marine Bank, Nat. Ass'n v. Meat Counter, Inc., 86-1918

• Decision Date: 26 August 1987
• Docket Number: No. 86-1918,86-1918
• Citation: 826 F.2d 1577
• Parties: MARINE BANK, NATIONAL ASSOCIATION, Plaintiff-Appellant, v. The MEAT COUNTER, INC., and Patrick Falcone, Defendants, Joseph Falcone, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1577

826 F.2d 1577

8 Fed.R.Serv.3d 1053

MARINE BANK, NATIONAL ASSOCIATION, Plaintiff-Appellant, v. The MEAT COUNTER, INC., and Patrick Falcone, Defendants, Joseph Falcone, Defendant-Appellee.

No. 86-1918.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 15, 1987.

Decided Aug. 26, 1987.

R.S. Maione, Chicago, Ill., for defendants and defendant-appellee.

Paul V. Esposito, Lewis, Overbeck & Furman, Chicago, Ill., for plaintiff-appellant.

Before WOOD and FLAUM, Circuit Judges, and GRANT, Senior District Judge. ^*

GRANT, Senior District Judge.

This appeal contests the district court's grant of summary judgment in a diversity suit brought by the appellant, Marine Bank, to recover sums allegedly due under an equipment lease. Because we conclude that genuine issues of material fact remain, we reverse the judgment of the district court and remand the case for further proceedings.

I

Joseph Falcone has been a butcher since 1938, and since 1956, the principal shareholder of International Meat Co., a closely-held meat cutting business he established with associates. Joseph Falcone cuts meat, while Al LaValle, the company President, conducts business matters such as financing and leasing. The elder Falcone had employed his son, Patrick Falcone, as a meat cutter for 18 years when, in 1982, Patrick informed his father that he desired his own business. In early 1983, after he had invested some money in the venture, Patrick asked his father to "sign for" his lease of refrigeration and other equipment. In their meeting with Jim Roemer, an agent of Marinebanc Leasing Company ("MBL") (Marine Bank is the assignee of MBL's rights under the lease), Joseph Falcone expressed that he did not want to be responsible for a default. The Falcones claim that Roemer replied, "I'll assure you you're not going to be responsible for anything. In case Pat can't make it, we'll just take the fixtures back." Without reading the documents, Joseph signed the guaranty, and Patrick acquired the equipment necessary to establish his new business, The Meat Counter, Inc.

The guaranty covers:

the prompt and unconditional payment of any and every obligation or liability of Obligor [Meat Counter] to MBL, its successors or assigns, whether or not represented by leases, conditional sales contracts, notes, dealer agreements or other writings, whether now existing or hereafter incurred, whether originally contracted with MBL or with another and assigned or transferred to MBL or otherwise acquired by MBL, whether contracted by Obligor alone or jointly with others, and whether absolute or contingent, secured or unsecured, matured or unmatured, including but not limited to any and all sums, late charges, disbursements, legal fees, and any deficiency upon enforcement of collateral deposited or otherwise, if any, in connection with all such obligations.

* * *

* * *

This guarantee shall be construed as an absolute and unconditional guarantee of payment, without regard to the validity, regularity, or enforceability of any obligation or purported obligation of Obligor. MBL [the Bank] shall have its remedy under this Guarantee without being obliged to resort first to any security or to any other remedy or remedies to enforce payment or collection of the obligations hereby guaranteed, and may pursue all or any of its remedies at one or at different times.

Patrick defaulted, and Marine Bank pressed Joseph for payment. Joseph refused to pay, and Marine Bank sought relief in the form of a two-count complaint. Count 1 sought sums due from Meat Counter under the equipment lease, and Count 2 sought recovery from Patrick and Joseph Falcone under personal guaranties signed by each. Meat Counter and Patrick Falcone filed for bankruptcy, and thus, were dismissed pending resolution of those proceedings. Joseph Falcone remained to defend this suit, which seeks $51,576.36, plus interest, attorneys' fees and expenses.

Falcone conceded that he executed a personal guaranty, and that demand was made upon him for payment, yet, he denied he owes anything under the guaranty. Falcone argued that he was induced to sign the guaranty by a misrepresentation which led him to believe that if Meat Counter defaulted on the lease, he would not be personally liable and MBL would merely sell the equipment to recover all sums due.

Marine Bank moved for summary judgment as to liability and Falcone filed a cross-motion for summary judgment. On March 10, 1986, the district court granted Falcone's motion for summary judgment and denied Marine Bank's motion, 635 F.Supp. 1029. The court ruled there could be no question that Roemer misrepresented the facts regarding the guaranty, that the misrepresentation was material, and that it induced Falcone to sign in justifiable reliance on the statement. The court concluded that Falcone had persuasively stated an affirmative defense and, therefore, no genuine issue of material fact remained for trial.

Four days later, on March 14, 1986, Marine Bank filed a motion under Fed.R.Civ.P. 59(e) requesting the court to "reconsider and vacate" the judgment. Marine Bank included in its motion the deposition and affidavit of Roemer which, in substance, denies ever making the representation as alleged by Falcone. ¹ Marine Bank argued that Rule 59(e) permits the court to amend or alter the judgment in light of this "newly discovered evidence." Falcone argued that the Roemer affidavit did not amount to newly discovered evidence because it had been available all along. (Judge Aspen agreed.) In fact, the affidavit was negligently left out of the summary judgment briefs by counsel for Marine Bank. Consequently, in its Rule 59(e) motion to reconsider the judgment, Marine Bank was compelled to request relief in the language of Fed.R.Civ.P. 60(b)(1) ("excusable" neglect), and Fed.R.Civ.P. 60(b)(6) ("other reason justifying relief"). But the court decided that none of the avenues of relief was available, and therefore, on April 30, 1986, it denied the motion.

On May 30, 1986, Marine Bank appealed from the summary judgment order of March 10, 1986. Although the appeal was filed more than 30 days after the date of entry of the judgment, see Fed.R.App.P. 4(a)(1), and though we are committed to exercising vigilance in strictly enforcing the 30-day filing rule, see, e.g., Reinsurance Company of America, Inc. v. Administratia Asigurarilor de Stat, 808 F.2d 1249 (7th Cir.1987), Marine Bank has brought a timely appeal according to the rationale of our decision in Charles v. Daley, 799 F.2d 343 (7th Cir.1986). A motion brought under Rule 59 suspends the finality of a judgment until the motion is decided; the clock stands at 30 days until then. Fed.R.App.P. 4(a)(4). Despite Falcone's assertion that Marine Bank's motion was not brought under Rule 59--because it actually sought relief from attorney neglect--Charles v. Daley adopted for this Circuit the rule that, where there is a dispute about the form of a motion, "all substantive motions served within 10 days of the entry of a judgment will be treated as based on Rule 59, and therefore as tolling the time for appeal." 799 F.2d at 347. Marine Bank brought its motion only four days after the court entered summary judgment, and it was a "substantive" motion, requesting the court to reconsider its judgment in light of an affidavit directed at the heart of the case. The motion therefore tolled the time in which Marine Bank had to appeal. Because the appeal was filed within 30 days of the court's denial of the motion to reconsider, we deny Falcone's motion to dismiss the notice of appeal as untimely filed.

II

The district court properly granted summary judgment to Falcone if there was no genuine issue as to any material fact and Falcone was entitled to judgment "as a matter of law." Fed.R.Civ.P. 56(c). In ruling on a summary judgment motion, the district court may not weigh the evidence and resolve issues of fact; disputed facts must be left for resolution in a trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Moreover, all reasonable inferences from the evidence must be drawn in favor of the non-movant. DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir.1987); Bartman v. Allis-Chalmers Corp., 799 F.2d 311, 312 (7th Cir.1986) cert. denied, --- U.S. ----, 107 S.Ct. 1304, 94 L.Ed.2d 160 (1987).

Wisconsin law governs the contract in this case, and Wisconsin applies the position taken in the Restatement (Second) of Contracts in determining whether a misrepresentation theory of defense voids a contract. See First National Bank and Trust Co. v. Notte, 97 Wis.2d 207, 293 N.W.2d 530, 538 (1980). Falcone seeks rescission as relief from his obligations under the guaranty. Under the applicable law: "If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient." Rest. (Second) of Contracts Sec. 164(1). The district court found that there was a material misrepresentation. Therefore, we focus on the alleged material misrepresentation, rather than on questions of fraudulent misrepresentation.

A misrepresentation is an assertion that does not accord with facts as they exist ... [and] is material if it is likely to induce a reasonable person to manifest his assent, or if the maker knows that it is likely that the recipient will be induced to manifest his assent by the misrepresentation.

Notte, 293 N.W.2d at 538. One cannot quarrel with the fact that a "misrepresentation" occurred, at least for purposes of deciding the summary judgment motions. Falcone claimed Roemer said that the contract would not extend beyond the equipment, although the contract plainly stated otherwise. Marine Bank failed to dispute in a timely manner whether the statement occurred; Roemer's denial was not yet available to the court. Thus,...