Month: May 2012

Bank Obtains Judgment Enforcing Personal Guarantee of Equipment Lease


WELLS FARGO PRACTICE FINANCE v. Norfleet, Dist. Court, ND Illinois 2012 – Google Scholar.

 

WFPF asserts that Irsenia Norfleet is liable for Norfleet DDS PC’s obligations under the Master Agreement and Lease Schedule. The secured guaranty agreement, like the other agreements at issue, is governed by California law. (See Marsh Aff. Ex. E.) Irsenia Norfleet does not contest that the secured guaranty is a valid agreement. By its terms, it establishes her liability for Norfleet DDS PC’s obligations under the Lease Schedule and Master Agreement. See Cal. Civ. Code §§ 2807, 2787; River Bank Am. v. Diller, 45 Cal. Rptr. 2d 790, 797 (Cal. Ct. App. 1995) (“[G]uaranty contracts are construed according to the same rules as those used for other contracts, with a view to ascertaining the intent of the parties.”). Irsenia Norfleet does not contest that she has failed to pay the amounts owed by Norfleet DDS PC. Therefore Irsenia Norfleet, like Norfleet DDS PC, is in default under the Master Agreement.See Cent. Bldg., LLC v. Cooper, 26 Cal. Rptr. 3d 212, 216 (Cal. Ct. App. 2005) (“When a guaranty agreement incorporates another contract, the two documents are read together and construed fairly and reasonably as a whole according to the intention of the parties.” (citations and quotations omitted)). WFPF’s motion for summary judgment as to Count II will be granted.

Because Norfleet DDS PC and Irsenia Norfleet are in default under the Master Agreement, WFPF is entitled to payment of the full amount owed under the Lease Schedule, including service fees and interest and attorney’s fees and costs. (See Marsh Aff. Ex. A ¶¶ 16-18.)”

Comment: think long and hard before personally guaranteeing a business obligation or someone else’s student loans.  Such guarantees are enforceable.

 

Edward X. Clinton, Jr.

Seventh Circuit Sanctions Lawyer For Frivolously Filing A Lawsuit


Copeland v. TOMS FOODS, INC., Court of Appeals, 7th Circuit 2012 – Google Scholar.

The Seventh Circuit has affirmed an award of sanctions in the context of an arbitration award.

The underlying dispute was a contract dispute between two parties concerning a contract to distribute products.

First, litigation was filed in state court.  The state court decided to refer that dispute to arbitration, pursuant to the parties’ agreement.  Second, the lawyer filed another lawsuit challenging the arbitration in federal court.  That lawsuit was dismissed.  The lawyer then refiled the same federal case two more times as the court explains:

Meanwhile, shortly before the state court ordered arbitration, Ducey had filed a complaint in federal court raising the same claims as in the state litigation. The district court dismissed the complaint for inadequate pleading of facts supporting diversity jurisdiction. Soon after that dismissal the state court issued its arbitration ruling, but instead of submitting the matter for arbitration or following through with the state-court appeal, Ducey refiled his federal complaint. Again the district court dismissed the complaint for inadequate pleading of diversity jurisdiction. Then in May 2004—almost two years after Copeland’s appeal from the order compelling arbitration had been dismissed—Ducey tried again in federal court. His complaint in this third federal action mirrors his state suit and the previous federal complaints.”

The Seventh Circuit affirmed the $3,000 sanctions award against the lawyer as follows: “The district judge in this case complied with these requirements. He identified which filing (the complaint) was potentially sanctionable, laid out the provisions of Rule 11 that he believed Ducey had violated, and gave Ducey almost three weeks to respond. The show-cause order also noted that the federal complaint was a carbon copy of the state-court filing, which Ducey knew had been referred to arbitration. This was more than enough to put Ducey on notice of the need to explain his rationale and legal justification for filing the complaint.”

Edward X. Clinton, Jr.