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BMO Harris Bank N.A. v. Mid-Ark Utilities & Rig Services, Inc.

United States District Court, E.D. Arkansas, Northern Division

September 3, 2019

BMO HARRIS BANK, N.A. PLAINTIFF
v.
MID-ARK UTILITIES & RIG SERVICES, INC., et al. DEFENDANTS

          ORDER

          Kristine G. Baker United States District Judge.

         Before the Court are plaintiff BMO Harris Bank, N.A.'s (“BHB”) motions for entry of default as to defendants Mike Penney and Mid-Ark Utilities & Rig Services Inc. (“Mid-Ark”) and a motion for summary judgment against separate defendant Lonnie Graham (Dkt. Nos. 20, 26, 27). For the reasons set forth below, the Court denies without prejudice the motion for default judgment against Mr. Penney, denies without prejudice the motion for default judgment against Mid-Ark, and grants the motion for summary judgment against Mr. Graham (Dkt. Nos. 20, 26, 27).

         I. Summary Judgment Motion

         Before the Court is BHB's motion for summary judgment as to separate defendant Mr. Graham (Dkt. No. 27). Mr. Graham has not responded, and the time to do so has passed.

         A. Findings of Fact

         The Court adopts the following findings of fact as set forth in BHB's statement of undisputed material facts attached to its motion for summary judgment against Mr. Graham (Dkt. No. 27-4). Mid-Ark entered into a Loan and Security Agreement (the “Agreement”) with BHB in the total amount of $312, 207.00 for the purchase of certain Equipment (the “Equipment”) (Id., ¶ 1). Pursuant to the Agreement, Mid-Ark agreed to make monthly payments for the purchase of the Equipment beginning on or about March 1, 2016, for a term of 60 months (Id., ¶ 2). Pursuant to the Agreement, Mid-Ark was obligated to pay a minimum monthly payment of $5, 203.45 (Id., ¶ 4). Pursuant to paragraph 5.1 of the Agreement, Mid-Ark would be in default if the “Debtor” fails to pay when due any amount owed by the “Debtor” to BHB under the Agreement (Dkt. No. 27-4, ¶ 5). Further, pursuant to paragraph 5.2 of the Agreement, upon default, BHB may “declare the indebtedness hereunder to be immediately due and payable.” (Id., ¶ 6). The Agreement was signed by Mr. Penney in his capacity as President of Mid-Ark (Dkt. No. 27-2, at 10).

         On or about December 29, 2015, Mr. Graham executed a Continuing Guaranty (the “Graham Guaranty”) (Dkt. No. 27-4, ¶ 7). Pursuant to the Graham Guaranty, Mr. Graham agreed to the prompt payment and performance of all obligations, liabilities, and undertakings of Mid-Ark to BHB (Id., ¶ 8). Mr. Graham entered into a valid written contract with BHB to induce BHB to extend credit to Mid-Ark, whereby he personally guaranteed Mid-Ark's prompt payment of all amounts owed to BHB, including all of Mid-Ark's then-existing and future obligations, debts, and liabilities to BHB (Dkt. No. 27-4, ¶ 9). By executing the Graham Guaranty, Mr. Graham guaranteed the repayment of all amounts due under the Agreement and expressly agreed, and is obligated, to pay BHB's reasonable attorney fees and cost of any action instituted upon Mid-Ark's default (Id., ¶ 10). The Guaranty states that it “is an absolute and unconditional guarantee of payment and not of collectability” (Dkt. No. 27-2, at 13).

         On or about December 1, 2017, Mid-Ark defaulted under the terms of the Agreement by failing to make the minimum monthly payment (Dkt. No. 27-4, ¶ 11). Mr. Graham defaulted on his contractual obligations by failing to pay said amount upon Mid-Ark's default (Id., ¶ 12). All the Equipment was surrendered to BHB and then sold in a commercially reasonable manner (Id., ¶ 13). As a result of Mr. Graham's default, BHB has sustained significant damages in the amount of $128, 623.33, plus BHB's attorneys' fees, legal expenses, and other costs (Id., ¶ 14).

         B. Legal Standard

         Under Federal Rule of Civil Procedure 56(c), summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, 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. Id. In such a situation, there can be “no genuine issue as to any material fact, ” since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. Id. at 323. The moving party is “entitled to a judgment as a matter of law” because the nonmoving party has failed to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof. Id.

         A party seeking summary judgment always bears the initial responsibility of informing this 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. Id. One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and it should be interpreted in a way that allows it to accomplish this purpose. Id. at 324.

         Federal Rule of Civil Procedure 56(e) allows for the possibility that a party may fail to respond to another party's assertion of fact, or, in this case, not respond to any of the assertions presented in the motion for summary judgment and accompanying filings. In this situation, the court may consider the facts undisputed or may “grant summary judgment if . . . the movant is entitled to it [.]” Fed.R.Civ.P. 56(e).

         The court must still determine whether summary judgment is appropriate, regardless of whether the adverse party failed to respond. See United States v. One Parcel of Real Property Located at 9638 Chicago Heights, St. Louis, Missouri, 27 F.3d 327, 329 n.1 (8th Cir. 1994).

         C. ...


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