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CITIBANK, N.A. v. BEARCAT TIRE

November 3, 1982

CITIBANK, N.A., PLAINTIFF,
v.
BEARCAT TIRE, A.G., ET AL., DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

In this diversity action Citibank, N.A. ("Citibank") has sued Bearcat Tire, A.G. ("Bearcat"), Jordan Fishman ("Fishman") and Louis Fishman & Co. ("Company"). Citibank alleges Bearcat defaulted on a promissory note (the "Note") (Count I), Fishman defaulted on a personal guaranty of the Note (Count II) and Bearcat transferred borrowed funds to Company in fraud of Bearcat's creditor Citibank (Count III). This Court's August 24, 1982 Order (the "Order") granted Citibank a judgment by confession against Bearcat. Bearcat has moved under Fed.R.Civ.P. ("Rule") 59(e) to "vacate, alter or amend" that judgment. Fishman has moved for dismissal under Rule 12(b)(6).*fn1 For the reasons stated in this memorandum opinion and order, both Bearcat's and Fishman's motions are denied.

Facts*fn2

In January 1982 Bearcat executed and delivered to Citibank the Note in the principal amount of $551,282, consolidating and renewing five previous demand notes (the "previous notes").*fn3 After making several payments of principal and interest on the Note, Bearcat tendered a payment by a check then returned for insufficient funds. Since May Bearcat has made no further payments on the Note despite Citibank's demand.

By an instrument (the "Guaranty") executed contemporaneously with the Note, Fishman personally guaranteed payment of the Note to Citibank. Fishman has failed to make any payments pursuant to the Guaranty despite Citibank's demand.*fn4

In accordance with the Note's confession of judgment clause, Citibank designated an attorney to appear for Bearcat before this Court. On Citibank's motion judgment was confessed via the Order in the sum of $462,884.17 (representing $416,281.99 in principal amount, $42,202.18 in interest, and $4,400 in attorneys' fees).

Bearcat's Rule 59(e) Motion

Adoption of Rule 59(e) confirmed this Court's inherent power to alter or amend its judgments. White v. New Hampshire Dep't of Employment Security, 455 U.S. 445, 449-51, 102 S.Ct. 1162, 1165-66, 71 L.Ed.2d 325 (1982).*fn5 Motions under Rule 59 are addressed to this Court's sound discretion. See 6A Moore, Federal Practice § 59.05[5], at 59-73 (1982). As with similar Rule 60(b) motions, a Rule 59(e) motion will be granted if the movant makes a "proper showing" of the grounds for relief. Cf. Smith v. Widman Trucking & Excavating, Inc., 627 F.2d 792, 795 (7th Cir. 1980) (discussing Rule 60(b)).

Though a Rule 59(e) motion apparently may raise any ground in its claim for relief, the motion itself should state its grounds with the particularity required by Rule 7(b)(1). Martinez v. Trainor, 556 F.2d 818, 819-20 (7th Cir. 1977).*fn6 Bearcat's motion is not as precise as Martinez may require, but in sum Bearcat claims:

1. It executed the Note under duress.

    2. Judgment was confessed by a member of the same law firm
  that prepared the Note and that represents Citibank in this
  action.

3. Citibank's judgment was excessive.

It would not be hyperbolic to term those "grounds" frivolous.

Citibank accompanied its Complaint with documentary evidence and its motion for judgment with affidavits. Bearcat has not contested the authenticity of Citibank's documents, and it has not tendered any factual showing of its own.*fn7

Bearcat's latter two arguments scarcely merit discussion. First, the Note (at 2) specifically allows Citibank to designate "any attorney" to confess judgment, and Illinois courts*fn8 have squarely held confession of judgment by an attorney of the same firm as plaintiff's counsel does not invalidate the judgment. Gecht v. Suson, 3 Ill. App.3d 183, 188, 278 N.E.2d 193, 196 (1st Dist. 1971). Second; Bearcat calculates the judgment "excess" by adding the judgment principal amount to Bearcat's admitted payments to Citibank, arriving at a sum greater than the Note's face amount. But Bearcat's payments had of course included both principal and interest, so they obviously did not reduce the Note's face amount ...


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