826 F.2d 1577 (7th Cir. 1987), 86-1918, Marine Bank, Nat. Ass'n v. Meat Counter, Inc.

Docket Nº:86-1918.
Citation:826 F.2d 1577
Party Name:MARINE BANK, NATIONAL ASSOCIATION, Plaintiff-Appellant, v. The MEAT COUNTER, INC., and Patrick Falcone, Defendants, Joseph Falcone, Defendant-Appellee.
Case Date:August 26, 1987
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 1577

826 F.2d 1577 (7th Cir. 1987)



The MEAT COUNTER, INC., and Patrick Falcone, Defendants,

Joseph Falcone, Defendant-Appellee.

No. 86-1918.

United States Court of Appeals, Seventh Circuit

August 26, 1987

Argued Jan. 15, 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

Page 1578

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.


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

Page 1579

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...

To continue reading