Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

NATIONAL ACCEPTANCE CO. OF AMERICA v. WECHSLER

April 9, 1980

NATIONAL ACCEPTANCE COMPANY OF AMERICA, A DELAWARE CORPORATION, PLAINTIFF,
v.
JAMES M. WECHSLER, DEFENDANT AND THIRD-PARTY PLAINTIFF, V. WINDSOR-DETROIT BARGE LINE, LTD., A CANADIAN CORPORATION, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Aspen, District Judge:

MEMORANDUM OPINION AND ORDER

The case now is before the Court on NAC's motion for summary judgment. NAC submits that there is no dispute as to the following facts: (1) that defendant Wechsler signed the individual guaranties in question; (2) that NAC made loans to Detroit Harbor in the amount of $800,000; and (3) that Detroit Harbor has defaulted on the loan payments. Based on these facts, NAC argues that Wechsler as a matter of law is liable under the guaranties for the amount due. The defendant has failed to introduce any persuasive evidence in rebuttal of these factual assertions. Rather, defendant resists the motion for summary judgment on the grounds that the numerous affirmative defenses and counterclaims he raises — thirteen in all — involve unresolved issues of fact that render summary adjudication of this action inappropriate.

The Seventh Circuit has observed that "[w]ith the ever increasing burden upon the judiciary, persuasive reasons exist for the utilization of summary judgment procedure whenever appropriate." Kirk v. Home Indemnity Co., 431 F.2d 554, 560 (7th Cir. 1970). The benefit of this procedure is that it permits the court to avoid a useless trial when there are no factual disputes remaining in a case. Nonetheless, it is not within the province of the Court to resolve issues of disputed material fact in a trial by affidavit. Moutoux v. Gulling Auto Electric, Inc., 295 F.2d 573, 576 (7th Cir. 1961). "[T]he party moving for summary judgment has the burden of clearly establishing the non-existence of any genuine issue of fact that is material to a judgment in [its] favor." Cedillo v. International Association of Bridge & Structural Iron Workers, Local Union No. 1, 603 F.2d 7, 10 (7th Cir. 1979). Any doubts must be resolved against the moving party. Moutoux, 295 F.2d at 576. It is in light of these principles that the Court will address the issues raised by defendant's affirmative defenses and counterclaims.

I. PROCEDURAL AFFIRMATIVE DEFENSES

In affirmative defenses I through VI, defendant claims that the complaint fails to state a claim upon which relief may be granted; that the Court lacks personal jurisdiction of Wechsler and subject matter jurisdiction of this action; that service of process was insufficient; that venue is improper in the Northern District of Illinois; and that the action must be dismissed for failure to join a number of necessary parties pursuant to Fed.R.Civ.P. 19(a). For the reasons that follow, the Court finds all these claims to be without merit.

Defendant's argument that the complaint fails to state a claim is based on a misreading of the complaint. Defendant suggests that the complaint fails to allege that Detroit Harbor has defaulted on payment of the amount due to NAC under the loan agreements or the amount of the indebtedness; yet that information is set forth clearly in the complaint. See Count I, ¶¶ 5, 9, 11; Count II, ¶¶ 8, 10, 12. Accordingly, the Court finds that the complaint adequately sets forth "a short and plain statement of the claim" as required by Fed.R.Civ.P. 8(a). Conley v. Gibson, 355 U.S. 41, 47-48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957); Austin v. House of Vision, 385 F.2d 171 (7th Cir. 1967).*fn1

Defendant's positions with respect to personal jurisdiction and service of process are interrelated; he asserts that the Court lacks personal jurisdiction over him because the service of process was insufficient. Under the guaranty contracts, Wechsler designated as his agent for service of process, H. G. Kanes, the past president of NAC. Pursuant to these contracts, it was agreed that Kanes would forward process to Wechsler within five days of service. By these contracts, Wechsler also agreed to submit to personal jurisdiction in the Northern District of Illinois.

  Wechsler, however, now argues that Kanes' affiliation with
NAC creates a conflict of interest which invalidates Kanes'
appointment as his agent for process. This contention,
however, was considered and rejected in National Equipment
Rental Ltd. v. Szukhent, 375 U.S. 311, 317-318, 84 S.Ct. 411,
415, 11 L.Ed.2d 354 (1964):

   . . [S]uch a contention ignores the narrowly
  limited nature of the agency here involved.
  Florence Weinberg was appointed the respondents'
  agent for the single purpose of receiving service
  of process. An agent with authority so limited
  can in no meaningful sense be deemed to have an
  interest antagonistic to the respondents, since
  both the petitioner and the respondents had an
  equal interest in assuring that, in the event of
  litigation, the latter be given that adequate and
  timely notice which is a prerequisite to a valid
  judgment.

See also National Acceptance Company of America v. Darby K. Coal Company, Inc., Civil Case No. 76 C 1857, Unpublished Op. at 2 (N.D.Ill., December 23, 1976). Defendant further alleges that Kanes failed to forward the process to Wechsler within the agreed five-day period. If this were the case, then the service of process would be invalid. Szukhent, 375 U.S. at 318, 84 S.Ct. at 415. NAC, however, has supplied an affidavit by Kanes attesting to the fact that he received service on June 14, 1978, and forwarded the process to the defendant on June 19, 1978. In addition, NAC has submitted a true and correct copy of a certified mail receipt indicating that service was forwarded on June 19, 1978. In the face of this evidence, defendant's unsupported allegations are insufficient to raise a factual issue concerning the validity of process or of personal jurisdiction.

With respect to joinder under Rule 19(a), defendant asserts that because Detroit Harbor is "jointly and severally liable" for the amount due NAC, it is an indispensable party to this action. Defendant also lists as necessary parties several other entities who are parties in related actions pending in the Eastern District of Michigan. The Court, however, has grave doubts that these parties are indispensable for the purposes of Rule 19(a). See Dunlop v. Beloit College, 411 F. Supp. 398, 403 (W.D.Wis. 1976). Moreover, the Court finds that the defendant has waived any right to raise this issue. Despite the importance of Rule 19 joinder, there is no bar to waiver of that right by a party. See State Farm Mutual Auto Insurance Co. v. Mid-Continent Casualty Co., 518 F.2d 292 (10th Cir. 1975); Process Control v. Tullahoma Hot Mix Paving Co., 79 F.R.D. 223 (E.D.Tenn. 1977).*fn2 These guaranty contracts expressly provide that NAC is not required to "prosecute collection or seek to enforce or resort to any remedies against Debtor or any other party liable to Lender on account of Debtor's Liabilities or any guaranty thereof." This contractual provision would be rendered a nullity were the Court to require NAC to join a myriad of other parties in this proceeding. Indeed, the very purpose of a guaranty agreement — to provide NAC with a simple means of compelling payment of a debt due — would be eviscerated by requiring such joinder. On the basis of a similar provision, the court in National Acceptance Company of America v. Demes, 446 F. Supp. 388, 389 (N.D.Ill. 1977), reached the same conclusion.

Defendant's attacks on subject matter jurisdiction and venue are derivative of his theory with respect to joinder. He argues that since joinder of an essential party — the State of Michigan — is impossible, the Court is without subject matter jurisdiction. In addition, he suggests that joinder of all the essential parties in this action would create jurisdiction under federal substantive law, thereby rendering venue improper in this district. Compare 28 U.S.C. § 1391(a) (venue in diversity cases) with 28 U.S.C. § 1391(b) (venue in cases arising under federal law). Inasmuch as the Court rejects defendant's argument with respect to joinder, it rejects the subject matter jurisdiction and venue arguments as well.*fn3

Accordingly, the plaintiff's motion for summary judgment is granted as to defendant's ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.