Textron Financial Corp. v. Lentine Marine Inc.

• Decision Date: 20 April 2009
• Docket Number: Case No. 08-14246-CIV.
• Citation: 630 F.Supp.2d 1352
• Parties: TEXTRON FINANCIAL CORPORATION, Plaintiff, v. LENTINE MARINE INC., Louis F. Lentine, and Julie A. Lentine, Defendants.
• Court: U.S. District Court — Southern District of Florida

630 F.Supp.2d 1352

TEXTRON FINANCIAL CORPORATION, Plaintiff, v. LENTINE MARINE INC., Louis F. Lentine, and Julie A. Lentine, Defendants.

Case No. 08-14246-CIV.

United States District Court, S.D. Florida.

April 20, 2009.

James Edwin Foster, Kelly Jean Howard Garcia, Akerman Senterfitt, Orlando, FL, for Plaintiff.

Marc Philip Barmat, Robert Cecil Furr, Furr & Cohen, Boca Raton, FL, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

K. MICHAEL MOORE, District Judge.

THIS CAUSE came before the Court upon Plaintiff's Motion for Partial Summary Judgment (dkt # 60).

UPON CONSIDERATION of the Motion, Defendants' Response, Plaintiffs' Reply, the pertinent portions of the record, and being otherwise fully advised in the premises, the Court enters the following Order.

I. BACKGROUND

This diversity case arises out of a contract dispute between Plaintiff Textron Financial Corp. ("Textron"), and Defendants Lentine Marine Inc. ("LMI"), Louis F. Lentine, and Julie A. Lentine (collectively, "the Lentines"). Textron is a Delaware commercial finance company. LMI is a Florida corporation in the business of selling boats, boat equipment, and related marine materials and services. Individual Defendants Louis Lentine and Julie Lentine are Florida citizens and the proprietors of LMI.

The Parties' business relationship began in September 2001, when Textron and LMI entered into a Credit and Security Agreement.¹ (Facts, dkt # 49, ¶ g n. 1). At that time, Louis Lentine also entered into a Personal Guaranty Agreement with Textron. (Facts, dkt # 49, ¶ i). On November 7, 2006, Textron and LMI entered into a new Credit and Security Agreement ("the Security Agreement"), which superseded the 2001 agreement. (Facts, dkt # 49, ¶ g n. 1). Under the Security Agreement, Textron agreed to finance LMI's acquisition of new inventory, with Textron taking a security interest in the inventory. (Facts, dkt # 49, ¶¶ h, 1). Textron perfected its security interest by filing the requisite UCC Financing Statement in 2001, and also filed a UCC Financing Continuation and a UCC Financing Amendment in 2006 with the Florida Secretary of State. (Compl. ¶ 51; Compl. Ex. E).

In November 2006 Julie Lentine also entered into a personal guaranty agreement with Textron (together with Louis Lentine's agreement, "the Guaranty Agreements"). (Facts, dkt # 49 ¶ j). Under the terms of the Guaranty Agreements, the Lentines each agreed to act as guarantors for LMI, and to be personally liable in the event that LMI defaulted on any of its obligations to Textron. (Louis Lentine Guaranty Agreement, dkt # 49-4 ¶ 1; Julie Lentine Guaranty Agreement, dkt # 49-5 ¶ 1).

On July 8, 2008, Textron filed a Verified Complaint (dkt # 1), alleging that LMI had defaulted under the terms of the Security Agreement, and that LMI had breached the agreement by continuing to sell items of inventory without making payments to Textron. Compl. ¶ 35. Textron accelerated the payment of all debt due under the Security Agreement, and alleged that the total amount due, including interest and costs, exceeded $6.5 million. Compl. ¶¶ 17, 18. Textron's Complaint sought (1) a preliminary injunction prohibiting LMI from selling inventory without remitting payment to Textron, (2) money damages for the sums owing under the Security Agreement, (3) repayment from the Lentines in their individual capacities as guarantors pursuant to the Guaranty Agreements, and (4) replevin of the LMI inventory in which Textron had perfected a security interest. On October 27, 2008, Defendants filed an Answer (dkt # 48) broadly denying Plaintiffs allegations.

Following further negotiations by the parties, on September 25, 2008, this Court, upon the consent of Plaintiff and Defendants, issued Writs of Replevin (dkt #'s 42, 43), pursuant to which LMI returned its inventory to Textron. On the same date, and also with the consent of the Parties, this Court entered a Temporary Restraining Order (dkt # 39) prohibiting LMI from selling or otherwise disposing of any of its inventory, and directing LMI to deliver to Textron any proceeds from past or future inventory sales. These consent orders effectively mooted Textron's preliminary injunction and replevin claims. Textron has since repossessed LMI's inventory, and has been able to recoup at least some of LMI's debt by reselling certain items of inventory back to their original manufacturers, and by selling others items through local marine dealers Treasure Coast Boat Center and Legendary Marine, Inc.

Plaintiff filed the instant Motion for Partial Summary Judgment (dkt # 60) on March 3, 2009, seeking the following from Defendants; (1) $843,266.81 for items of inventory sold without remitting payment to Plaintiff; (2) $25,489.50 for costs incurred to repossess LMI's inventory; (3) $916,201.44 for the deficiency between the full cost of the repossessed items and what Plaintiff was able to recover for them at resale; (4) $126,993.28 in unpaid interest, and (5) attorneys' fees and costs.

II. STANDARD OF REVIEW

The applicable standard for reviewing a summary judgment motion is unambiguously stated in Rule 56(c) of the Federal Rules of Civil Procedure:

The judgment sought should be rendered 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.

Summary judgment may be entered only where there is no genuine issue of material fact. Twiss v. Kury, 25 F.3d 1551, 1554 (11th Cir.1994). The moving party has the burden of meeting this exacting standard. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). An issue of fact is "material" if it is a legal element of the claim under the applicable substantive law which might affect the outcome of the case. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997). An issue of fact is "genuine" if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party. Id.

In applying this standard, the district court must view the evidence and all factual inferences therefrom in the light most favorable to the party opposing the motion. Id. However, the nonmoving party "may not rely merely on allegations or denials in its own pleading; rather, its response must—by affidavits or as otherwise provided in this rule—set out specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e)(2). "The mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmovant]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. ANALYSIS

A. Applicability of Florida Law

On a motion for summary judgment, the materiality of facts is determined with reference to the applicable substantive law. Allen, 121 F.3d at 646. The parties have not briefed the issue of what substantive law applies to this dispute, seemingly assuming that it is Florida law. In diversity suits the substantive law is generally the law of the forum state in which the district court sits. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The issue is not necessarily so simple here, however, because the Security Agreement and the Guaranty Agreements include choice of law provisions specifying that each contract is governed by the law of the State of Rhode Island. (Security Agreement, dkt # 49-3, ¶ 16; Louis Lentine Guaranty Agreement, dkt # 49-4, ¶ 6; Julie Lentine Guaranty Agreement, dkt # 49-5, ¶ 6). The Parties' filings do not refer to the Rhode Island choice of law provisions.

While it would have been preferable for the parties to brief this issue, or better still, to have expressly stipulated to the substantive law, the Court holds that because neither party disputes whether Florida law controls, and because both Parties' briefs rely exclusively upon Florida law, the choice of law issue has been waived. The Court will accordingly apply Florida law. See Topp, Inc. v. Uniden Am. Corp., 483 F.Supp.2d 1187, 1189 (S.D.Fla.2007) (concluding in contract dispute that, "`because the parties failed to consider the choice of law in this diversity case, we must presume that the substantive law of the forum (Florida) controls.'") (quoting Int'l Ins. Co. v. Johns, 874 F.2d 1447, 1458 n. 19 (11th Cir.1989)); see also Munnings v. FedEx Ground Package Sys., Inc., No. 6:07-cv-282-Orl-KRS, 2008 WL 1744779, at *3 n. 2 (M.D.Fla. April 11, 2008) (applying Florida law to contract claim where parties briefed Florida law exclusively without reference to Pennsylvania choice of law provision); Marine Envtl. Partners, Inc. v. Johnson, 863 So.2d 423, 426 (Fla. 4th Dist.Ct.App.2003) (same).

B. Plaintiff's Substantive Claims

As discussed above, Plaintiffs Complaint originally included five claims. Counts I and V, seeking a preliminary injunction and replevin, respectively, have been resolved through consent orders. Count II was styled as a breach of contract claim seeking recovery from LMI under the Security Agreement; Count III sought recovery from Louis Lentine under his personal guaranty agreement; Count IV,² sought recovery from Julie Lentine under her personal guaranty agreement.

Plaintiff seeks recovery for: (i) the amount allegedly owed by LMI for items of inventory sold without repaying Plaintiff; (ii) the amount of deficiency³ allegedly owed by LMI for items of repossessed inventory resold or to be resold; (iii) costs allegedly incurred by Plaintiff in the course of repossessing LMI's inventory, (iv) the amount of unpaid interest that LMI allegedly owes, and (v) attorneys' fees and costs. As discussed in further detail below, Defendants' Response contests only the issue of whether LMI owes Plaintiff a deficiency, without rebutting...