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CORPORATE RESOURCES v. SOUTHEAST SUBURBAN AMBULATO

September 26, 1991

CORPORATE RESOURCES, INC., a Michigan corporation, Plaintiff,
v.
SOUTHEAST SUBURBAN AMBULATORY SURGICAL CENTER, INC., an Illinois corporation, a/k/a LINCOLN MEDICAL CENTER, LTD., RICHARD EGWELE, M.D., SUSAN EGWELE, M.D., VISHNU MATHUR, M.D., JOSEPH KIBUYAGA, M.D., EVANS FIAKPUI, M.D., HEE HAN KIM, M.D., RITA OGANWU, M.D. and SANATH KUMAR, M.D., Defendants



The opinion of the court was delivered by: DUFF

 BRIAN BARNETT DUFF, UNITED STATES DISTRICT JUDGE

 Background

 Plaintiff Corporate Resources, Inc. ("C.R.I.") is a corporation incorporated in Michigan with its principal place of business in Michigan. It is in the business of providing financing for leased equipment.

 Defendant, Southeast Suburban Ambulatory Surgical Center ("Southeast") is a corporation incorporated in Illinois with its principal place of business in Illinois. It is in the business of providing medical care. The eight individual defendants are physicians who are citizens and residents of Illinois.

 Plaintiff alleges that each of the counts in its ten-count complaint arises under this court's diversity jurisdiction. 28 U.S.C. 1332(a). Defendants have moved this court to dismiss all ten counts arguing that for each count the amount in controversy fails to exceed $ 50,000, as is required for diversity jurisdiction.

 Facts

 Southeast signed a Master Lease Agreement with C.R.I. for the lease of certain medical and other equipment. The parties then entered into three separate Lease Orders pursuant to the Master Lease Agreement. Those Lease Orders were entered into between January 5 and May 25, 1989. Two of the three Lease Orders provided for monthly payments to be paid for an initial term of 45 months. The other provided for monthly payments to be paid for an initial term of 48 months. The eight physicians who are defendants in this action each made written personal guaranties to C.R.I. on behalf of Southeast. The eight guaranteed to C.R.I. "the prompt payment in full, when due, or accelerated following default, of every Lease Payment due under the Lease Agreement or any Lease Order" entered into by Southeast. C.R.I.'s complaint alleges that in November, 1990, Southeast ceased making its monthly payments to the plaintiff.

 In its suit, C.R.I. has brought two causes of action against Southeast. C.R.I. has sued under Count I, styled "Breach of Contract," for $ 243,429.69. It reached that figure first by alleging that Southeast's failure to make timely rental payments was a breach of the Lease Agreement and that the Lease Agreement includes a provision entitling C.R.I. to demand accelerated payment of all amounts due under the lease in case of default. Consequently, C.R.I. alleges that Southeast owes it a total of $ 174,398.80 in accelerated lease payments (even after crediting Southeast $ 10,000 for a payment Southeast made in May, 1990). C.R.I. then added to the $ 174,398.80 the equipment's fair market value which it estimated to be $ 56,982. C.R.I. further alleges that it is also owed late charges of $ 2,048.80 and attorney's fees of $ 10,000.

 Amount in Controversy Exceeds $ 50,000 in Count I

 Defendants have moved to dismiss all of the counts arguing that this court lacks jurisdiction because they claim that the amount in controversy does not exceed $ 50,000. They first argue that under Michigan law C.R.I. was not entitled to enforce the acceleration clause in the lease because it accepted a $ 10,000 payment in May, 1991 from Southeast. Relying on Theatre Equipment Acceptance Corp. v. Betman, 242 N.W. 903, 259 Mich. 245 (1932), Defendants argue that C.R.I. waived its right to exercise the acceleration option in case of default. Defendants then state that "the only recovery that could be had by C.R.I. is those back payments still owing on the date of filing." (Def. Br. at 8). They then urge this court to "take judicial notice that, according to Plaintiff's allegations, those sums do not exceed $ 50,000, and therefore, the instant case should be dismissed for want of jurisdiction." Id.

 This court need not address Defendants' fancy argument, however, because the $ 243,429.60 demanded by C.R.I. was not all for amounts owed as lease payments. C.R.I.'s complaint alleged that over $ 50,000 of the amount demanded was for the value of the equipment leased. Accordingly, ...


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