Kraan Invs. (USA) v. Tarpenning
| Docket Number | 20-2538-DDC-TJJ |
| Decision Date | 06 December 2021 |
| Parties | KRAAN INVESTMENTS (USA) LLC and KRAAN MEMPHIS LLC, Plaintiffs, v. SEAN TARPENNING, Defendant. |
| Court | U.S. District Court — District of Kansas |
Plaintiffs Kraan Investments (USA) LLC (“Kraan USA”) and Kraan Memphis LLC (“Kraan Memphis”) filed this action against defendant Sean Tarpenning seeking to enforce the guaranty and indemnification provisions in their six loan agreements with U.S. Real Estate Equity Builders LLC (“USREEB”). Doc. 1 (Compl.). This matter comes before the court on defendant's Motion for Summary Judgment (Doc. 32). It seeks judgment against plaintiffs' claims on the theory that plaintiffs never made the requisite demand for USREEB to repay the loans; thus, defendant argues plaintiffs can't possibly recover from him on the guaranty provisions in the six loan agreements. See Doc. 32 at 2. Plaintiffs filed a response opposing the motion. (Doc. 38). And defendant filed a Reply (Doc. 41).
The court now is ready to rule and it denies defendant's motion. The court explains why, below. But first, the court addresses plaintiffs' Motion to Substitute (Doc. 42).
Before the court is plaintiffs' Motion to Substitute Exhibit 1 to Plaintiffs' Memorandum in Opposition to Defendant's Motion for Summary Judgment. Doc. 42. Plaintiffs inadvertently submitted an unsigned and undated version of the Third Declaration Under Penalty of Perjury of Jacob H. Kraan. Doc. 42 at 1; Doc. 38-2 (Third Kraan Decl.)
Defendant noted these shortcomings in his Reply. The Reply argues the court should not consider the unsigned and undated Declaration submitted by plaintiffs. Doc. 41 at 2. And, defendant argues, the court should not consider Exhibits O and P because those exhibits are attached to the unsigned and undated Declaration. Id. After defendant filed his Reply, plaintiffs filed the Motion to Substitute. Doc. 42. Defendant opposes this Motion to Substitute. Doc. 44.
The court finds the proposed substitution unnecessary. The court need not consider Mr. Kraan's Third Declaration, Exhibit O, or Exhibit P[1] to decide the current motion for summary judgment. Thus, the court denies the Motion to Substitute as a moot question and now turns to the merits of defendant's summary judgment motion.
Summary judgment is appropriate if the moving party demonstrates that there exists “no genuine dispute [about] any material fact” and that it “is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). When applying this standard, the court views the evidence and draws inferences in the light most favorable to the non-moving party. Nahno-Lopez v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010) (citing Oldenkamp v. United Am. Ins. Co., 619 F.3d 1243, 1245-46 (10th Cir. 2010)). A disputed “issue of fact is ‘genuine' ‘if the evidence is such that a reasonable jury could return a verdict for the non-moving party' on the issue.” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). And an “issue of fact is ‘material' ‘if under the substantive law it is essential to the proper disposition of the claim' or defense.” Id. (quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson, 477 U.S. at 248)).
The moving party bears “‘both the initial burden of production on a motion for summary judgment and the burden of establishing that summary judgment is appropriate as a matter of law.'” Kannady v. City of Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010) (quoting Trainor v. Apollo Metal Specialties, Inc., 318 F.3d 976, 979 (10th Cir. 2002)). To meet this burden, the moving party “‘need not negate the non-movant's claim, but need only point to an absence of evidence to support the non-movant's claim.'” Id. (quoting Sigmon v. CommunityCare HMO, Inc., 234 F.3d 1121, 1125 (10th Cir. 2000)).
If the moving party satisfies its initial burden, the non-moving party “‘may not rest on its pleadings, but must bring forward specific facts showing a genuine issue for trial [for] those dispositive matters for which it carries the burden of proof.'” Id. (quoting Jenkins v. Wood, 81 F.3d 988, 990 (10th Cir. 1996)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Anderson, 477 U.S. at 248-49. “To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein.” Adler, 144 F.3d at 671 (citing Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir.), cert. denied, 506 U.S. 1013 (1992)).
The facts recited below either are uncontroverted for purposes of defendant's summary judgment motion or, where genuinely controverted, are the facts viewed in the light most favorable to plaintiffs, the parties opposing summary judgment. Scott v. Harris, 550 U.S. 372, 378 (2007).
U.S. Real Estate Equity Builder LLC (“USREEB”) buys “distressed single family and multi-family residential and commercial properties, rehabs the properties, and then sells the properties.” Doc. 13-1 at 2 (Tarpenning Decl. ¶ 5). Kraan USA and Kraan Memphis made a total of six loans, described below, to USREEB with Sean Tarpenning as Guarantor in each.
Starting in June 2016, Kraan USA sold three properties in the Kansas City area to USREEB-listing Sean Tarpenning as “Guarantor”-for $45, 000 and accepted a $45, 000 promissory note in lieu of cash resulting in Kraan USA Loan 1A Doc. 8-1 at 2 (First Kraan Decl. ¶ 7); see also Doc. 8-2 (Decl. Ex. A) (Kraan USA Loan 1A). Kraan USA Loan 1A required interest payments of $1, 000 per month and had a repayment date-or date on which the loan would mature-of August 1, 2017. Doc. 8-2 at 1 (Decl. Ex. A) (Kraan USA Loan 1A ¶¶ 2.1, 3.1).
In August 2017, Kraan USA renewed the Kraan USA Loan 1A with USREEB and Mr. Tarpenning, resulting in Kraan USA Loan 1B Doc. 8-1 at 2-3 (First Kraan Decl. ¶ 9); see also Doc. 8-3 (Decl. Ex. B) (Kraan USA Loan 1B). The terms provide that Kraan USA would loan USREEB $45, 000 and USREEB would pay $1, 000 in interest on the first of the month. Doc. 8-3 (Decl. Ex. B) (Kraan USA Loan 1B). Unlike Kraan USA Loan 1A, Kraan USA Loan 1B does not have a specified future date for repayment. Compare Doc. 8-2 at 1 (Decl. Ex. A) (Kraan USA Loan 1A ¶ 3.1) (“The Company shall repay the Outstanding Principal in full on or before August 1st, 2017”), with Doc. 8-3 at 1 (Decl. Ex. B) (Kraan USA Loan 1B ¶ 3.1) (“The Company shall repay the Outstanding Principal in full upon 60 days of receiving written notice of the requirement to pay the Outstanding Principal”). Kraan USA Loan 1B requires that USREEB receives “written notice of the requirement to repay the Outstanding Principal” then it must repay the amount in full “upon 60 days[.]” Doc. 8-3 at 1. The Guarantor-Mr. Tarpenning-“unconditionally and irrevocably guarantee[d] the punctual performance of all of [USREEB]'s obligations under this document.” Id. at 2. Also, Loan 1B requires Mr. Tarpenning to “immediately upon demand pay [Kraan USA] any amount not paid when due by [USREEB] under this document.” Id. Mr. Tarpenning executed the agreement and a notary signed it. Id. at 5.
2. Kraan USA Loan 2
In August 2017, Kraan USA issued another loan to USREEB with Mr. Tarpenning as Guarantor-with the same terms as Kraan USA Loan 1B-for a principal amount of $45, 000 and $1, 000 per month interest payments. Doc. 8-1 at 3 (First Kraan Decl. ¶¶ 10-11); see also Doc. 8-4 (Decl. Ex. C) (Kraan USA Loan 2). The interest payments are due on the first day of the month. Id. at 1 (Kraan USA Loan 2 ¶ 2.1(a)). And, like Kraan USA Loan 1B, any outstanding principal is due “in full upon 60 days of receiving written notice of the requirement to repay[.]” Id. (Kraan USA Loan ¶ 3.1). Mr. Tarpenning executed the agreement and a notary signed it. Id. at 4-6.
3. Kraan USA Loan 3
On February 14, 2018, Kraan USA issued a third loan to USREEB for $50, 000 that accrued interest at a rate of 20% per year. Doc. 8-1 at 3-4 (First Kraan Decl. ¶ 15); see also Doc. 8-6 (Decl. Ex. E) (Kraan USA Loan 3). The loan agreement lists Sean Tarpenning as Guarantor and he executed the agreement with a notary witnessing his signature. Doc. 8-6 at 1, 6 (Decl. Ex. E) (Kraan USA Loan 3). The terms provide that USREEB must make interest payments on the last day of the month. Id. at 1. And, upon written demand sent to sean@usreeb.com, USREEB must pay the principal in full within 90 days. Id. at 2. The contract states, “[Sean Tarpenning] must immediately upon demand pay [Kraan USA] any amount not paid when due by [USREEB] under this document.” Id. Mr. Tarpenning executed the agreement and a notary signed it. Id. at 6.
4. Kraan USA Loan 4
On July 2, 2018, Kraan USA issued its last loan to USREEB, with Mr. Tarpenning as Guarantor, for a principal amount of $100, 000 and an interest rate of 20% per annum. Doc. 8-1 at 4 (First Kraan Decl. ¶ 17); see also Doc. 8-8 (Decl. Ex. G) (Kraan USA Loan 4). The terms require USREEB to pay the interest on the first day of each calendar month. Doc. 8-8 at 1 (Decl. Ex. G) (Kraan USA Loan 4). The agreement requires USREEB to “repay the Outstanding Principal in full upon 90 days of receiving written notice of the requirement to repay the Outstanding Principal.” Id. And, it provides, Mr. Tarpenning “must immediately upon demand pay [Kraan USA] any amount not paid when due by [USREEB] under this document.” Id. at 2. Mr. Tarpenning executed this agreement and a notary signed it. Id. at 5.
5. Kraan Memphis Loan 1
On February 14, 2018, Kraan Memphis agreed to lend “[USREEB]/Sean Tarpenning” a total of $170, 000 with an interest rate of 20% per...
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