Leaf Funding, Inc. v. Brogan Pharmaceuticals, Inc., 2:08-CV-345-PRC.

CourtUnited States District Courts. 7th Circuit. United States District Court of Northern District of Indiana
Citation642 F.Supp.2d 844
Docket NumberNo. 2:08-CV-345-PRC.,2:08-CV-345-PRC.
PartiesLEAF FUNDING, INC., Plaintiff, v. BROGAN PHARMACEUTICALS, INC. and Brett Dines, Defendants.
Decision Date27 July 2009

Christine M. McLaughlin, Victoria L. Nilles, Thompson Hine LLP, Dayton, OH, for Plaintiff.

Brian L. Goins, Hinshaw & Culbertson LLP, Schererville, IN, for Defendants.


PAUL R. CHERRY, United States Magistrate Judge.

This matter is before the Court on Plaintiff LEAF Funding, Inc.'s Motion for Summary Judgment [DE 17], filed by Plaintiff LEAF Funding, Inc. ("LEAF") on April 17, 2009. For the reasons set forth in this Order, the Court grants LEAF's Motion for Summary Judgment on liability and damages but orders further briefing on the calculation of damages owed to LEAF jointly and severally by Defendants.


On December 1, 2008, LEAF filed its Complaint against Brogan Pharmaceuticals, Inc. ("Brogan") and Brett Dines ("Dines") (collectively "Defendants"), alleging that Brogan defaulted on an Equipment Lease Agreement ("Agreement" or "Lease Agreement") for certain medical equipment ("Equipment"), for which Dines had personally guaranteed payment. In the First Claim for Relief for Breach of the Lease Agreement, LEAF alleges that Brogan is in default on the Lease Agreement because it failed to make payments under the Agreement and that, as a result, Brogan owes LEAF the sum of $87,681.24, plus interest at the rate of 15% per annum, late fees, reasonable collection costs, and attorney's fees. In the Second Claim for Relief for Breach of the Lease Agreement, LEAF alleges that, under a Guaranty executed by Dines to secure payment of Brogan's indebtedness under the Lease Agreement, Dines owes LEAF the sum of $87,681.24, plus interest at the rate of 15% per annum, late fees, reasonable collection costs, and attorney's fees. Finally, in the Third Claim for Relief for Replevin, LEAF alleges its immediate right to possession of the Equipment and seeks an Order of Possession with respect to the Equipment.

On January 23, 2009, Defendants filed an Answer and affirmative defenses, including that LEAF's Complaint is time-barred, that LEAF failed to take reasonable steps to mitigate its damages, and that LEAF has waived the personal guaranty of Dines by virtue of its alleged impairment of the value of the Equipment.

On April 17, 2009, LEAF filed the instant Motion for Summary Judgment and a Memorandum in Support, seeking summary judgment on the First and Second Claims for Relief in its Complaint and requesting that the Third Claim for Relief be dismissed without prejudice. Defendants filed a Response on May 18, 2009, and LEAF filed a Reply on June 2, 2009.

The parties filed forms of consent to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).


The Federal Rules of Civil Procedure mandate that motions for summary judgment be granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Rule 56(c) further requires the entry of summary judgment, after adequate time for discovery, against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "[S]ummary judgment is appropriate-in fact, is mandated-where there are no disputed issues of material fact and the movant must prevail as a matter of law. In other words, the record must reveal that no reasonable jury could find for the non-moving party." Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir.1994) (citations and quotation marks omitted).

A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The moving party may discharge its "initial responsibility" by simply "'showing'-that is, pointing out to the district court-that there is an absence of evidence to support the non-moving party's case." Id. at 325, 106 S.Ct. 2548. When the non-moving party would have the burden of proof at trial, the moving party is not required to support its motion with affidavits or other similar materials negating the opponent's claim. See id. at 323, 325, 106 S.Ct. 2548; Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n. 3 (7th Cir.1994); Fitzpatrick v. Catholic Bishop of Chi., 916 F.2d 1254, 1256 (7th Cir.1990). However, the moving party, if it chooses, may support its motion for summary judgment with affidavits or other materials and thereby shift to the non-moving party the burden of showing that an issue of material fact exists. See Kaszuk v. Bakery & Confectionery Union & Indus. Int'l Pension Fund, 791 F.2d 548, 558 (7th Cir. 1986); Bowers v. DeVito, 686 F.2d 616, 617 (7th Cir.1982).

Once a properly supported motion for summary judgment is made, the non-moving party cannot resist the motion and withstand summary judgment by merely resting on its pleadings. See Fed.R.Civ.P. 56(e)(2); Donovan v. City of Milwaukee, 17 F.3d 944, 947 (7th Cir.1994). Rule 56(e) establishes that the opposing party's "response must-by affidavits or as otherwise provided in this rule-set out specific facts showing a genuine issue for trial." Fed. R.Civ.P. 56(e)(2); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, to demonstrate a genuine issue of fact, the non-moving party must do more than raise some metaphysical doubt as to the material facts; the non-moving party must come forward with specific facts showing that there is a genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

In viewing the facts presented on a motion for summary judgment, a court must construe all facts in a light most favorable to the non-moving party and draw all legitimate inferences in favor of that party. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505; NLFC, Inc. v. Devcom Mid-Am., Inc., 45 F.3d 231, 234 (7th Cir.1995); Doe v. R.R. Donnelley & Sons Co., 42 F.3d 439, 443 (7th Cir.1994). A court's role is not to evaluate the weight of the evidence, to judge the credibility of witnesses, or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact. See Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505; Doe, 42 F.3d at 443.


On or about December 20, 2007, Brogan, as lessee, and Direct Capital Corporation ("Direct"), as lessor, executed the Lease Agreement. Under this Agreement, Brogan agreed to make a monthly "Rental Payment Amount" of $1,719.24 for a "Rental Term" of sixty months (for a total of $103,154.40) in exchange for the lease of the Equipment.

The "Default and Remedies" provision of the Agreement provides: "If (a) Lessee fails to make any payment required pursuant to this Lease when due, ... or (e) Lessee attempts or actually repudiates or revokes this agreement or any other agreement with Lessor or its assignees, then Lessee will be in default." Pl. Mot., Exh. 1-A, ¶ 22. The section further establishes that, in the event of a default,

Lessor, with or without notice to Lessee, shall have the right to exercise any one or more of the following remedies, concurrently or separately, and without any election of remedies being deemed to have been made. Lessor may ... (c) sue for and recover from Lessee any and all amounts due under this Lease including the Stipulated Lease Value of this Lease, ... (e) require the Lessee to assemble and make the Equipment available to the Lessor at a location determined by the Lessor, ... (h) refer this Lease to an attorney for collection; or (i) pursue any other remedy available to the Lessor under any agreement or applicable law. Lessee agrees to pay all costs of collection including, but not limited to, costs of repossession, attorney's costs including attorney's fees, actual court costs, and any other expenses associated with the collection efforts.... Lessor may use any of the remedies available under Article 2A of the Uniform Commercial Code as enacted in the State of New Hampshire or any other law.

Id. (emphasis added).

The calculation for determining the "Stipulated Lease Value" referred to in subpart (c) is set forth under "Loss and Damage" and provides:

Stipulated Lease Value equals the sum of: 1) all amounts due by Lessee to Lessor under this Lease up to the date of the loss or termination including, but not limited to, all Rental Payment Amounts, all taxes, all service charges and interest on delinquent payments and any cost of collections owed pursuant to sections 22 and 23, 2) the accelerated balance of the total amounts due for the remaining term of this Lease discounted monthly to present value at a discount rate of 4% per annum from the date each such installment is due to the date of loss or termination, 3) all other amounts due by Lessee to Lessor including interest and service charges through the date of full payment to the Lessor of all Lessee obligations and 4) the Lessor's estimate as of the time this Lease was entered into of Lessor's residual interest in the Equipment discounted to present value at a discount rate of 4% per annum to the date of...

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