Ascentium Capital LLC v. Adams Tank & Lift Inc.
| Decision Date | 15 September 2017 |
| Docket Number | CASE NO.: 1:15-CV-123 (LJA) |
| Parties | ASCENTIUM CAPITAL LLC, Plaintiff, v. ADAMS TANK & LIFT INC, et al., Defendants. |
| Court | U.S. District Court — Middle District of Georgia |
Before the Court are Plaintiff Ascentium's Motion for Partial Summary Judgment (Plaintiff's Motion), Doc. 66, and Defendants Adams Tank & Lift Inc. and Andrew J. Adams' Motion for Summary Judgment (Defendants' Motion), Doc. 69. Plaintiff has also moved to dismiss Defendant Ataollah Masoodzadehgan as a party. Doc. 72. For the reasons stated below, Plaintiff's Motion for partial summary judgment, Doc. 66, is GRANTED in part and DENIED in part, and Defendants' Motion for summary judgment, Doc. 69, is GRANTED in part and DENIED in part. Plaintiff's Motion to dismiss a party, Doc. 72, is GRANTED.
Plaintiff Ascentium Capital, LLC (Ascentium) initiated this action on July 24, 2015. Doc. 1. On September 14, 2016, with leave from the Court, Plaintiff filed an Amended Complaint, which is now the operative Complaint as to Defendants Phoenix Petroleum, LLC (Phoenix), Adams Tank & Lift, Inc. (AT&L), Andrew J. Adams (Adams), Great American Travel Center, LLC (American), and Ataollah Masoodzadehgan (A.M.). Doc. 55. Plaintiff's Complaint as amended asserts nine causes of action: (1) three claims of breach of contract against Defendants Phoenix, American, Falcon Entity, LLC (Falcon), and A.M.; (2) money had and received against AT&L (3) conversion against Phoenix and AT&L (4) unjust enrichment against AT&L (5) breach of contract against AT&L (6) fraud against Phoenix, A.M., AT&L, and Adams; and (7) attorney's fees against all Defendants.
Plaintiff Ascentium is a lending company. See Doc. 66-2 ¶ 5. Phoenix is the owner and operator of several gas stations. See Doc. 66-2 ¶ 3. American and Falcon are LLCs owned by A.M. Docs. 66-2 ¶¶ 22-23; 55 ¶ 11. A.M. is the principle member and operator of Phoenix, American, and Falcon. American, Falcon, and A.M. were guarantors on loans between Phoenix and Plaintiff. Docs. 66-2 ¶¶ 22-23; 55 ¶ 11. AT&L operates a business that sells, installs, and services fuel and service station-related equipment in Georgia to operators such as Phoenix. Doc. 66-2 ¶ 1. Adams is the President of AT&L and communicated directly with Plaintiff during the course of AT&L's business dealings with Plaintiff and Phoenix. Doc. 66-2 ¶ 2. AT&L and Adams had an ongoing business relationship with both Phoenix, as a supplier of equipment, and Plaintiff, as a vendor with whom Plaintiff had a preferred status as a lender. See Doc. 66-2.
On December 15, 2016, Plaintiff and Defendants AT&L and Adams moved for partial summary judgment and summary judgment respectively.1 Docs. 66 & 69. Plaintiff seeks summary judgment (1) on claims I, II, and III against Phoenix, American, and Falcon and (2) on claims IV, V, and VI against AT&L. Doc. 66-1 at 22. Defendants AT&L and Adams seek summary judgment against Plaintiff as to claims IV, V, VI, VII, VIII, and IX. Doc. 69-1 at 29. Plaintiff and Defendants AT&L and Adams filed timely responses and replies to the respective Motions. Docs. 78, 81, 84, 85. Defendants Phoenix, American, andFalcon neither responded to Plaintiff's Motion nor joined Defendants AT&L and Adams' Motion. See Docket.
This case revolves around a deal to equip two gas stations in Cairo and Jackson, Georgia. Phoenix and its managing member, A.M., owned the gas stations and ostensibly wanted to purchase equipment for the stations from AT&L, an equipment vendor. Phoenix and A.M. needed financing for the deal and sought it from Plaintiff, AT&L's preferred lender, advising Plaintiff that the loans were for the purchase of equipment and promising Plaintiff a security interest in the equipment. Plaintiff provided the loans, but much of the equipment was never purchased. Instead, after AT&L received the money, Phoenix and A.M. asked AT&L to refund the loan proceeds to Phoenix. Although AT&L knew that the loan had been made for the express purpose of funding the equipment purchase, it nevertheless directed a large portion of the loan funds to Phoenix. Due in large part to its own sloppy procedures and failure to conduct due diligence, Plaintiff did not discover that it had been duped and had no security to protect its interests for two years. The details of this scheme are as set forth below.
In October 2012, AT&L prepared a proposal at Phoenix's request to provide fuel dispensers, related hardware and equipment, a POS system, an interior cooler, and canopies for Phoenix's location in Cairo, Georgia (the Cairo Project). Doc. 69-2 ¶ 13. The parties sought funding from Plaintiff, and on September 27, 2012, Len Baccaro, Plaintiff's Senior Vice President of Sales, sent Adams an email requesting information on the Phoenix transactions. Doc. 69-3 at 153. On November 14, 2012, Adams responded to Baccaro's email detailing $521,908.17 worth of equipment and services for the Cairo Project proposal and for equipment for another project that had been delayed, a 2011 project in Jackson, Georgia. Docs. 69-3 at 152; 69-2 ¶ 16. In January 2011, AT&L entered into a contract withPhoenix to supply and install equipment at Phoenix's location in Jackson, Georgia for $340,939.00 (the Jackson Project). Doc. 69-2 ¶ 7. In the Spring of 2011, AT&L while installing certain equipment, stopped work because of building and sewer issues with Butts County, Georgia, leaving a $22,454.20 balance on the work done for Phoenix. Doc. 69-2 ¶¶ 8-10. According to AT&L, the remaining equipment and services were to be paid for at a later date once they were delivered and installed by AT&L. Doc. 69-2 ¶ 11.
On November 26, 2012, AT&L sent Phoenix an unsigned proposal for the Cairo site totaling $143,058.00 plus tax for fuel dispensers, related hardware and equipment, and a POS system. Docs. 69-2 ¶ 17, 19; 81-1 ¶ 17, 19. AT&L sent the Cairo proposal to Plaintiff on December 5, 2012. Docs. 69-2 ¶ 19; 81-1 ¶ 19. On or around December 11, 2012, upon receipt of the Cairo proposal from AT&L, Plaintiff emailed Adams stating: "So far [A.M. and Phoenix] have been approved for 250k without using any financials." Doc. 69-2 ¶¶ 20, 21. On January 10, 2013, Baccaro emailed Adams indicating he "had a nice chat" with A.M. of Phoenix, and that "he should be calling [AT&L] about the invoices" for the Cairo site. Doc. 69-2 ¶ 23. Adams then included a cooler and canopies in the invoice Plaintiff was requesting in relation to the $250,000.00 Plaintiff agreed to loan Phoenix. Doc. 69-2 ¶ 25. Thus, on January 18, 2013, Adams sent a single invoice to Phoenix and Plaintiff totaling $249,995.00 for fuel dispensers, related equipment and hardware, a POS System, canopies, and a cooler for the Cairo site. Doc. 69-2 ¶ 27.
On January 21, 2013, Plaintiff instructed Adams, via email, to split the invoice into two invoices—one for $150,000.00, and one for $100,000.00, which in total would equal the $250,000.00 of financing Baccaro had stated Phoenix had previously been approved for by Plaintiff. Docs. 66-2 ¶ 8; 78-2 ¶ 8. Thereafter, AT&L forwarded invoice number 2640474 for $150,000.00 and invoice number 2640475 for $100,000.00 to Plaintiff. Doc. 69-2 ¶ 29.
Plaintiff agreed to finance Phoenix's purchase of the Cairo equipment by advancing 100% of the purchase price of the equipment to AT&L on Phoenix's behalf. Doc. 66-2 ¶¶ 5, 6. Phoenix and Plaintiff entered into two written agreements, each labeled "EQUIPMENT FINANCE AGREEMENT," as part of Plaintiff's financing of Phoenix's purchase of the Cairo equipment—agreement numbers 2116122 and 2118557 (the Cairo Agreements). Docs.66-2 ¶ 9; 55-1 at 2-5; 1-1 at 2-5. The Agreements had repayment terms of sixty (60) payments of $3,069.00 and $2,046.00 respectively. See Docs. 68; 55-1 at 2-5; 1-1 at 2-5. Subsequent to the signing of the Cairo Agreements, the invoices from AT&L were stamped by Plaintiff, labeled "Schedule A," and attached to the Cairo Agreements; and the agreement numbers were written on the invoices.3 Doc. 69-2 ¶ 30.
Falcon and American each executed two guaranties in Plaintiff's favor on the Cairo Agreements. Docs. 66-2 ¶ 22, 23; 55-2 at 2-5; 1-2 at 2-5; 55-3 at 2-5; 1-3 at 2-5. The guaranties, attached to the Complaint and Plaintiff's Motion, stated that the guarantors:
[H]ereby unconditionally guarantee and promise on demand (i) to pay [Plaintiff] . . . sums required to be paid under the terms of (A) the . . . equipment finance agreement . . . whose Agreement number is referenced above, . . . entered between [Plaintiff] and Phoenix Petroleum, LLC, . . . and (B) any document relating to such Agreement . . . in the amounts, at the times and in the manner set forth in such Agreement or Other Documents.
Docs. 66-2 ¶ 23; 55-3 at 2-5; 1-3 at 2-5.
On January 25, 2013, and January 28, 2013, Plaintiff wired two payments to AT&L totaling $225,000.00—90% of the purchase price of the Cairo equipment. Docs. 66-2 ¶ 13; 69-2 ¶ 32. Phoenix then requested that AT&L refund Phoenix $100,000.00 of the wired funds since AT&L was not supplying Phoenix with the canopies or the cooler. Doc. 69-2 ¶ 37. Without notifying Plaintiff, AT&L sent $100,000.00 of the loan funds to Phoenix. Docs. 69-2 ¶ 39; 66-2 ¶ 17; 78-2 ¶ 17. AT&L retained the remaining money necessary to pay for equipment and services AT&L provided at the Cairo site under the November 2012 contract proposal with Phoenix. Docs. 66-2 ¶ 16; 78-2 ¶ 16.
Plaintiff did not learn of the cancellation of the Cairo orders or the diversion of funds to Phoenix until more than two years later. Doc. 66-2 ¶¶ 19, 20. On or around March 29, 2013, after receiving an email from Adams that inquired about further funding from Plaintiff and indicated that the dispensers were at the Cairo site, Plaintiff, unaware of the diversion of previously provided funds and cancelled purchases, wired $25,000.00 to AT&L—the last 10% of the purchase price of the Cairo equipment. Docs. 66-2 ¶ 15; ...
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