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Comerica Bank v. Esshaki

United States District Court, E.D. Michigan, Southern Division

September 7, 2017

COMERICA BANK, Plaintiff,
v.
JAMES ESSHAKI, individually and as Trustee of the JAMES ESSHAKI LIVING TRUST dated April 25, 1991, as amended and restated, PETER SHAMAN, an individual, and PETER SHAMAN, M.D. P.C., jointly and severally, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (DOC. 18)

          GEORGE CARAM STEEH, UNITED STATES DISTRICT JUDGE

         Plaintiff Comerica Bank (“Comerica”) brought this breach of contract action for failure to repay an Installment Note against defendants James Esshaki, James Esshaki Living Trust dated April 25, 1991 (“Trust”), Peter Shaman, and Peter Shaman, M.D. P.C. (“Shaman P.C.”) (collectively “defendants.”). Plaintiff alleges that defendants owe $344, 558.62 plus interest, late fees, costs and attorney fees. Defendants oppose the motion on the grounds that discovery has just begun. Upon review of the parties' written submissions, the court determines that no oral argument is necessary pursuant to Local Rule 7.1(f)(2). For the reasons set forth below, Comerica's motion shall be granted.

         II. Background

         Comerica loaned money to defendant Peter Shaman under the terms of an Installment Note, and the debt was guaranteed by Shaman, Shaman P.C., Esshaki, and the Trust (collectively “Guarantors”). In their Answer, defendants admit to same. Under the Note, Shaman agreed to pay Comerica $437, 382.91 payable in monthly installments of $2, 650.45 beginning on June 1, 2011, and continuing until the maturity date of September 15, 2011 when the entire unpaid balance of principal, interest and other sums was due and payable in full. According to the Complaint, defendants failed to pay the indebtedness on the Note when due. Under the terms of the Note, Comerica's record of outstanding debt is “conclusive evidence thereof” and the burden is on defendants to prove that the loan history suffers from “manifest error.” (Doc. 18, Ex. A at 1).

         In their Answer, defendants admit that the Note was not fully paid at maturity on September 15, 2011. (Doc. 11 at Para. 12). When defendants failed to repay the debt, the parties agreed to a new payment schedule in a Forbearance Agreement executed on June 19, 2012, which was extended three times, under which Comerica agreed to forbear from collection for a period of time. Under the original Forbearance Agreement, Comerica agreed to forbear from collection until September 15, 2012. The First Amended Forbearance Agreement extended Comerica's forbearance to January 15, 2013, the Second Amended Forbearance Agreement extended Comerica's forbearance to June 30, 2015, and the Third Amended Forbearance Agreement extended Comerica's forbearance to July 1, 2017. Comerica alleges that defendants stopped making payments in May, 2016. In their Answer, defendants admit that they did not make all the required payments under the Third Amended Forbearance Agreement. (Doc. 11 at Para. 17).

         As part of the Forbearance Agreement and in its subsequent amendments, defendants acknowledged that they were in default on the Note. (Doc. 18, Ex. E, F, G, H). Specifically, the Forbearance Agreement provides: “The Maturity Date of the Note is September 15, 2011, and the Note has not been paid. This is a default under the Note and Loan Documents. The full amount of the Note is and remains immediately payable in full.” (Doc. 18, Ex. E at 1). On January 15, 2016, as consideration for forbearance, each defendant explicitly “acknowledge[d] the Liabilities as set out in the [Note], . . .the existence of the default, and that the Liabilities are immediately due and payable.” (Doc. 18, Ex. H at 1).

         On January 31, 2017, Comerica notified defendants of their defaults under the Note, the Forbearance Agreement and subsequent amendments, terminating the term of forbearance and demanding full payment. In their Answer, defendants admit that they executed the Forbearance Agreement and its three subsequent extensions, and admit that they failed to make all the monthly payments. (Doc. 11 at Para. 13-17). Comerica filed this lawsuit on March 30, 2017. The discovery cut-off date is January 31, 2018. Comerica filed its motion for summary judgment on July 25, 2017. In support of its motion for summary judgment, Comerica relies on the affidavit of Sarah Miller, Vice President of the Special Assets Group for Comerica who avers that as of July 17, 2017, defendants owe the sum of $344, 558.62 in principal, plus accrued interest in the amount of $21, 325.93, plus $1, 779.09 in late fees, costs, and attorney fees.

         II. Standard of Law

         Federal Rule of Civil Procedure 56(c) empowers the court to render summary judgment "forthwith 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 judgment as a matter of law." See Redding v. St. Eward, 241 F.3d 530, 532 (6th Cir. 2001). The Supreme Court has affirmed the court's use of summary judgment as an integral part of the fair and efficient administration of justice. The procedure is not a disfavored procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Cox v. Kentucky Dep't of Transp., 53 F.3d 146, 149 (6th Cir. 1995).

         The standard for determining whether summary judgment is appropriate is "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Amway Distributors Benefits Ass'n v. Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The evidence and all reasonable inferences must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original); see also National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).

         If the movant establishes by use of the material specified in Rule 56(c) that th If the movant establishes by use of the material specified in Rule 56(c) that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing party must come forward with "specific facts showing that there is a genuine issue for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v. 988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in the non-movant's pleadings will not meet this burden, nor will a mere scintilla of evidence supporting the non-moving party. Anderson, 477 U.S. at 248, 252. Rather, there must be evidence on which a jury could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing Anderson, 477 U.S. at 252).

         III. Analysis

         A. Loan Documents Enforceable

         There is no genuine issue of material fact that the loan documents are enforceable. Under Michigan law, promissory notes and guarantees are “to be construed as ordinary contracts.” 31800 Wick Road Holdings, LLC v. Future Lodging-Airport, Inc., 848 F.Supp.2d 757, 763 (E.D. Mich. 2012) (citing Collateral Liquidation, Inc. v. Renshaw,301 Mich. 437, 443 (1942)). The guarantees are enforceable because a “promise to answer for the debt, default, or misdoings of another person” need only be a “memorandum of the agreement . . . in writing and signed with an authorized signature by the party to be charged with the agreement.” MCL Sec. 566.132(1)(b). Defendants have admitted to execution of the ...


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