Blair-Naughton, L.L.C. v. Diner Concepts, Inc.
| Decision Date | 17 July 2008 |
| Docket Number | No. 06-1183-JTM.,06-1183-JTM. |
| Citation | 568 F.Supp.2d 1249 |
| Parties | BLAIR-NAUGHTON, L.L.C., d/b/a Goodland Steakhouse Diner, Plaintiff, v. DINER CONCEPTS, INC., and Dinermite Diners, Inc., Georgia Corporations, David H. Bernstein, and Diane Bernstein, Defendants. |
| Court | U.S. District Court — District of Kansas |
Ken M. Peterson, Morris, Laing, Evans, Brock & Kennedy, Chtd., Wichita, KS, Michael J. Day, Kite & Day, St. Francis, KS, for Plaintiff.
Laurence A. Taylor, Colby, KS, M. Duane Coyle, Paul J. Skolaut, Hinkle Elkouri Law Firm L.L.C., Wichita, KS, Villard Bastien, Law Offices of Villard Bastien LLC, Decatur, GA, for Defendants.
This matter is before the court on the defendant Diane Bernstein's Motion to Dismiss (Dkt. No. 150). Because both defendant and plaintiff Blair-Naughton both rely heavily on evidentiary matters outside the pleadings, the court will resolve the motion as one for summary judgment.
Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the court must examine all evidence in a light most favorable to the opposing party. McKenzie v. Mercy Hospital, 854 F.2d 365, 367 (10th Cir.1988). The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir.1985). The moving party need not disprove plaintiffs claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir. 1987).
In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather, the nonmoving party must come forward with specific facts showing the presence of a genuine issue of material fact for trial and significant probative evidence supporting the allegation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505 91 L.Ed.2d 202 (1986). Once the moving party has carried its burden under Rule 56(c), the party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. "In the language of the Rule, the nonmoving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed. R.Civ.P. 56(e)) (emphasis in Matsushita). One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and the rule should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Plaintiff, Blair-Naughton, L.L.C. Blair-Naughton, is, and at all times relevant has been, a Kansas limited liability company headquartered in Goodland, Kansas (the founding members were Thomas W. Blair and Brian W. Naughton).
Defendant Diner Concepts, Inc., is, and at all times relevant has been, a Georgia corporation headquartered in Atlanta, Georgia. Defendant Dinermite Diners, Inc. Dinermite is, and at all times relevant has been, a Georgia corporation headquartered in Atlanta, Georgia. David Bernstein is, and at all times relevant has been, a director, the President and CEO of Diner Concepts and Dinermite, and is, and at all times relevant has been, a resident of Marietta, Georgia. Diane Bernstein is, and at all times relevant has been, a director, the Secretary and/or Secretary-Treasurer and/or the CFO of Diner Concepts and Dinermite, and is, and at all times relevant has been, a resident of Marietta, Georgia.
On March 23, 2005, Blair-Naughton and Diner Concepts entered into a Sales Contract, under which Diner Concepts agreed to sell to Blair-Naughton a "modular" diner structure. The diner would be constructed by a manufacturer "designated" by Diner Concepts. The purchase price for the diner, including an installed kitchen equipment package, "delivery charges" and the cost of "placement of [the] unit onto Purchaser's footings/foundation at their own prepared site/location," was $537,500.00. (Def. Exh. 8, at BN00087).
The purchase price was to be paid in five installments: $25,000.00 upon execution of the Sales Contract; $163,175.00 within ten days of "receipt of Approval Plans" for the diner; $134,350.00 within ten days of the point in time "25% of construction" of the diner was completed by the manufacturer; $134,350.00 within ten days of the point in time "50% of construction" of the diner was completed; and, a final payment of $80,625.00 within ten days of "completion of factory construction prior to shipment to Purchaser's site."
Blair-Naughton made the first payment under the Sales Contract, in the amount of $25,000.00, by means of a cashier's check in the same amount, dated March 21, 2005, made payable to Diner Concepts, drawn on a bank account maintained by Blair-Naughton with the First National Bank of Goodland, Kansas. This cashier's check was deposited into a bank account maintained by Diner Concepts with Bank of America in Atlanta, Georgia, on March 23, 2005. Blair-Naughton made the second payment on June 24, 2005, by another cashier's check. Although made payable to Dinermite, the check was deposited into a bank account maintained by Diner Concepts with Bank of America in Atlanta, on June 27, 2005. It made the third and fourth payments on November 16, 2005, paying one combined lump sum of $268,700.00 by a wire transfer from the First National Bank of Goodland to Dinermite's account in Atlanta. By a similar wire transfer, Blair-Naughton made the fifth and final payment of $80,625.00 on January 4, 2006.
Except for the period at or around the time of its formation, Diner Concepts kept no minutes of meetings of shareholders, officers or directors. Diner Concepts did not file separate tax returns for the years 2002 or thereafter; it filed returns in combination with Dinermite. In its correspondence, frequently it did not use any distinctive Diner Concepts letterhead. Its financial records for the period beginning January 1, 2002 are limited to the records from two Atlanta Bank of America accounts. Diane Bernstein testified that her husband operated Diner Concepts out of the offices of Dinermite, that she was not aware of any assets owned by Diner Concepts, and not aware of any employees of Diner Concepts.
The diner sold to Blair-Naughton was the only diner ever sold by Diner Concepts.
Blair-Naughton alleges that, without its knowledge, David Bernstein arranged for Wilkins Builders to construct a different, inferior diner to that which it had agreed to.
On August 10, 2005, Dinermite, acting through David Bernstein, entered into a written agreement with Wilkins Mobile Builders, Inc. of Double Springs, Alabama, to manufacture the diner structure, for a purchase price of $232,410.00. The Wilkins Contract provided that the purchase price was to be paid by Dinermite to Wilkins Builders by means of an initial payment of 25%, with the balance to be paid upon completion of construction. Dinermite made the initial 25% payment, in the amount of $58,102.00, by means of a check dated August 9, 2005.
On September 21, 2005, Dinermite entered into a contract with Ballentine Equipment Co., Inc. of Greenville, South Carolina, for the kitchen equipment package for the Blair-Naughton diner. The Ballentine Contract provided that the purchase price of $110,199.04 (which included delivery and installation) was to be paid by Dinermite by means of an initial payment of 25% of the purchase price upon execution of the Ballentine Contract, with the balance to be paid upon installation of the kitchen equipment package. Dinermite made the initial 25% payment ($27,549.76), by means of a check dated September 21, 2005.
Diner Concepts made the second and final payment due to Wilkins Builders by means of a cashier's check in the amount of $157,307.50 drawn on its Atlanta account. The difference between the total amounts in the contract ($232,410) and the amount actually paid to Wilkins Builders ($215,409.50) is explained by the fact the Wilkins Contract provided for a future "credit" to Dinermite relative to the actual cost of exterior stainless steel materials, which credit was estimated at approximately $17,000.00 at the time the Wilkins Contract was entered into on August 10, 2005, and which credit was actually granted in the exact amount of $17.000.00 (as Metalworks, another company, provided and installed the stainless steel, as noted below), leaving a final balance of $157,308.00 owed to Wilkins Builders. For whatever reason, the final payment ($157,307.50) to Wilkins Builders by Diner Concepts was $0.50 short.
The completed diner structure modules manufactured by Wilkins Builders were delivered to Blair-Naughton's site in Goodland, on or about January 20, 2006. Bennett Truck Transport, L.L.C. of McDonough, Georgia, hauled these modules to Goodland. Bennett's adjusted charge for hauling the modules from Double Springs, Alabama, to Goodland, was $8,156.00 paid by means of a check dated February 10, 2006.
Dinermite made the second and final payment due to Ballentine Equipment, for the kitchen equipment package, in the amount of $82,649.28, by means of a cashier's check dated March 17, 2006.
EZ Erectors was paid $5,240.00 for assembling and erecting the diner modules by cashier's check in that amount dated January 20, 2006. An additional $4,500.00 was paid to EZ Erectors by check dated February 8, 2006. This was a payment for EZ Erectors' crew's "down time" before the diner structure...
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