United States District Court, E.D. Tennessee, Greeneville
Clifton L. Corker Magistrate Judge
R. MCDONOUGH UNITED STATES DISTRICT JUDGE
the Court is Plaintiff BMO Harris Bank, N.A.'s
(“BMO”) motion for summary judgment. (Doc. 18.)
For the reasons stated hereafter, BMO's motion will be
facts in this case are largely undisputed. BMO is a national
banking association and is successor-in-interest to loan
agreements entered into between non-parties and Defendant
Custom Diesel Express, Inc. (“Custom Diesel”).
(Doc. 1, at 1, 4; Doc. 20-1, at 1-2.) In total, Custom Diesel
entered into four loan agreements to finance its purchase of
certain equipment, including tractors and trailers. (Doc. 1,
at 1, 4; Doc. 20-1, at 1-2.) Defendant John Griffiths
guaranteed each of the loan agreements. (Doc. 1, at 4; Doc.
20-1, at 2.) Additionally, as part of the loan agreements,
Custom Diesel granted the non-parties a security interest in
the equipment purchased with funds obtained through the loan
agreements. (Doc. 1, at 4; Doc. 20-1, at 2.) Effective
December 1, 2015, the non-parties assigned their rights,
titles, and interests to their accounts with Custom Diesel,
including the loan agreements, Griffiths's guarantees,
and its security interests in the equipment, to BMO. (Doc. 1,
at 4; Doc. 20-1, at 2.)
Diesel failed to make payments due under the terms of one of
the loan agreements on August 1, 2015, and on the remainder
of the loan agreements on September 1, 2015, thereby
rendering them in default. (Doc. 1, at 5; Doc. 20-1, at 2.)
Custom Diesel has also failed to make any subsequent payment
due. (Doc. 1, at 5; Doc. 20-1, at 2.) As a result of Custom
Diesel's default, and pursuant to the terms of the loan
agreements, BMO accelerated the entire amounts due under the
loan agreements, making the balances owed on the loan
agreements immediately due and payable. (Doc. 1, at 5; Doc.
20-1, at 2.) Custom Diesel has subsequently failed to pay
balances owed under the loan agreements. (Doc. 1, at 6; Doc.
20-1, at 2.) Custom Diesel and Griffiths do not dispute that
they have breached the terms of the loan and guarantee
agreements. (See Doc. 20-1, at 1-4.)
on its security interests in the equipment, BMO recovered
possession of the equipment and proceeded to sell some, but
not all, of it. (Doc. 19-1, at 6; Doc. 20-1, at 2.)
Specifically, as of the date BMO filed its motion for summary
judgment, it had not sold the equipment purchased in
connection with the fourth loan agreement. As of February 1,
2017, BMO asserts that, after applying the net proceeds from
the sales of the repossessed equipment, $291, 369.45 remains
owed by Custom Diesel and Griffiths. (Doc. 19-1, at 7-8.) BMO
asserts that this amount reflects the remaining unpaid
principal plus accrued interest as of February 1, 2017, late
fees, and costs of recovery and the sale of the equipment,
which BMO is entitled to under the terms of the loan
agreements. (Id.) This amount, however, does not
include attorneys' fees and costs, to which BMO is also
entitled under the terms of the loan agreements.
Custom Diesel and Griffiths do not dispute that they have
breached the loan agreements, they dispute BMO's
calculation of the amount owed as a result of their breaches.
Specifically, Custom Diesel and Griffiths assert that BMO
failed to sell the equipment covered by the first, second,
and third loan agreements in a commercially reasonable
manner. (Doc. 20-2, at 1-2.) In a declaration, Griffiths
avers that: (1) he is familiar with the values of the
equipment covered by the loan agreements based on his
experience in the trucking industry; and (2) the equipment
sold in connection with the first, second, and third loan
agreements was “worth as much or more that the amounts
due and owing under each respective [loan agreement] at the
time they were sold.” (Id.) Griffiths further
avers that the equipment covered by the fourth loan
agreement, which BMO has not yet sold, “is worth
approximately the same amount that is due and owing under the
[fourth] loan agreement.” (Id. at 2.)
response to Griffiths's averments, BMO has submitted
evidence regarding its sale of the repossessed equipment
covered by the first, second, and third loan agreements.
Specifically, in a declaration, Micki Koepke, a litigation
specialist for BMO, details its process for repossessing,
repairing, advertising, and reselling the collateral that
secured the first, second, and third loan agreements,
including that BMO: (1) notified Custom Diesel and Griffiths
of its sale of the collateral; (2) afforded Custom Diesel and
Griffiths the opportunity to redeem the collateral prior to
sale; (3) evaluated each of the units of collateral
independently to determine the best method to mitigate its
damages; (4) sold the collateral by unit, rather than in
bulk, to maximize resale value; (5) advertised nationally, in
print, digital, and other media for several months; (6)
invested resources to repair certain collateral; (7)
negotiated private sales for certain collateral; and (8)
offered certain collateral for public auction by a well
established industrial engineer that routinely buys and sells
commercial vehicles through multiple selling platforms. (Doc.
22-1, at 9-12.) As it relates to the equipment repossessed in
connection with the fourth loan agreement, Koepke avers that
that BMO is currently advertising and seeking to sell the
equipment, but it has not yet received a reasonable offer.
(Id. at 11-12.) In the event BMO receives net
proceeds from selling or otherwise disposing of the equipment
covered by the fourth loan agreement, it will credit the
amount of the net proceeds to any judgment amount entered
against Custom Diesel and Griffiths. (Id. at 11-12.)
initiated the present action on March 25, 2016. (Doc. 1.) In
its verified complaint, it asserts claims against Custom
Diesel and Griffiths for, among other things, breach of
contract. (Id.) BMO now moves for summary judgment
on its claims against Custom Diesel and Griffiths. (Doc. 18.)
STANDARD OF LAW
judgment is proper when “the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The Court views the evidence in the light most
favorable to the nonmoving party and makes all reasonable
inferences in favor of the nonmoving party. Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986); Nat'l Satellite Sports, Inc. v.
Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001).
moving party bears the burden of demonstrating that there is
no genuine dispute as to any material fact. Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986); Leary v.
Daeschner, 349 F.3d 888, 897 (6th Cir. 2003). The moving
party may meet this burden either by affirmatively producing
evidence establishing that there is no genuine issue of
material fact or by pointing out the absence of support in
the record for the nonmoving party's case. Celotex
Corp., 477 U.S. at 325. Once the movant has discharged
this burden, the nonmoving party can no longer rest upon the
allegations in the pleadings; rather, it must point to
specific facts supported by evidence in the record
demonstrating that there is a genuine issue for trial.
Chao v. Hall Holding Co., Inc., 285 F.3d 415, 424
(6th Cir. 2002).
summary judgment, the Court may not weigh the evidence; its
role is limited to determining whether the record contains
sufficient evidence from which a jury could reasonably find
for the non-movant. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248-49 (1986). A mere scintilla of evidence is
not enough; the Court must determine whether a fair-minded
jury could return a verdict in favor of the non-movant based
on the record. Id. at 251-52; Lansing Dairy,