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.

Nature Coast Collections, Inc v. Consortium Service Management Group

February 23, 2009

NATURE COAST COLLECTIONS, INC, PLAINTIFF,
v.
CONSORTIUM SERVICE MANAGEMENT GROUP, INC., ET AL., DEFENDANT.



The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Currently pending before the Court are two motions filed by Defendants Consortium Service Management Group, Inc. ("CSMG"), Gordon W. Allison ("Allison"), vice-president of CSMG, and Donald S. Robbins ("Robbins"), president and chairman of CSMG (collectively, "Defendants"). The first motion [96] seeks summary judgment against Plaintiff, Nature Coast Collections, Inc. ("Nature Coast"); the second motion [129] asks the Court to strike the affidavit of Simon Shaw submitted by Plaintiff along with its initial response to Defendants'motion for summary judgment. For the reasons set forth below, Defendants' motion for summary judgment [96] is denied and Defendants'motion to strike the Shaw affidavit [129] is granted.

I. Background

In ruling on a motion for summary judgment, the Court takes the relevant facts from the parties' respective Local Rule 56.1 ("L.R. 56.1") statements. The Court resolves all genuine factual ambiguities in Plaintiff's favor (see Foley v. City of Lafayette, Ind., 359 F.3d 925, 928 (7th Cir. 2004)), and takes no position on whose version of disputed factual matters is correct.*fn1 Although the parties' Local Rule 56.1 statements reflect a great deal of disputed matters, most of those disputed matters have no bearing on the legal issues that the Court must consider in ruling on Defendants'motion for summary judgment. Thus, the facts that are relevant to the motion before the Court are largely undisputed.*fn2

Defendants operate as a technology company engaged in owning, developing, patenting, managing, licensing, and marketing technologies developed in Ukraine and other Eastern European countries. (Def. SOF ¶ 5.) In early 2001, Defendants sought financing for a carbon dioxide separator at a landfill in Texas for the purpose of commercially exploiting the methane gas produced by the landfill. (Id. at ¶ 10.) CSMG engaged Global Services Group LLC ("Global") to assist in securing the necessary funding for the project. (Id. at ¶ 11.)

Pursuant to Global's instructions, the four Notes that are the subject of this lawsuit were executed by Robbins, on behalf of CSMG, in favor of Stonegate Management, Ltd. ("Stonegate"), a Costa Rican trust company owned, managed, and operated by Simon Shaw ("Shaw"). (Def. SOF ¶¶ 13-28.) The first promissory note was made in May 2001 in connection with a $115,000 wire transfer received by CSMG. (Def. SOF ¶ 13.) CSMG made and delivered to Global a promissory note in favor of "Stonegate Management Ltd." in such amount, payable, with interest, on May 20, 2002. (Id.) The second promissory note was made in July 2001 in connection with a $362,000 wire transfer received by CSMG. (Def. SOF ¶ 14.) CSMG made and delivered to Global a promissory note in favor of "Stonegate Management Ltd." in such amount, payable, with interest, on July 2, 2002. (Id.) The third promissory note was made in August 2001 in connection with a $53,000 wire transfer received by CSMG. (Def. SOF ¶ 16.) CSMG made and delivered to Global a promissory note in favor of "Stonegate Management Ltd." in such amount, payable, with interest, on August 20, 2002. (Id.) The fourth promissory note was made in connection to a $100,000 bridge loan that Global had arranged and CSMG had received in January 2000 from an entity known as "Olympus CR." (Def. SOF ¶ 28.) On or about January 1, 2002, CSMG executed a promissory note in favor of "Stonegate Ltd."*fn3 in the principal amount of $100,000, payable with interest on September 30, 2002. (Id.) Each of the four Notes contains a choice-of-law provision which states: "this note shall take effect as a sealed instrument and shall be construed, governed and enforced in accordance with the laws of the state first appearing at the head of the note." The state first appearing at the head of all four Notes at issue is Texas.

There is no dispute that Defendants executed and issued the four Notes and delivered them to Global -- the entity that brought Defendants and Stonegate together in connection with the financing of Defendants'business venture. (Def. SOF ¶¶ 13-28.) It also is undisputed that the Notes are negotiable instruments governed by UCC Article 3. See Tex. Bus. & Com. Ann. § 3.104(a).

On August 29, 2005, Shaw, acting on behalf of Stonegate, authored a document purporting to assign to Nature Coast "any and all rights of any kind it has relative to [Defendants] in connection with the four (4) loans in the original principal amounts of: May 20, 2002/$115,000, July 2, 2002/$362,000, August 20, 2002/$53,000, and September 30, 2002/$100,000" in consideration of $10. (Compl., Ex. A.) On June 30, 2006 Nature Coast initiated an action [42-2] to enforce the four Notes. Nature Coast does not have possession of all of the Notes*fn4 ; it contends that the missing Notes were lost, stolen or destroyed while in the possession of the original owners'agent. In their motion for summary judgment, Defendants contend that: (i) Nature Coast is not entitled to enforce the Notes against CSMG under the applicable provisions of the Uniform Commercial Code ("UCC"); (ii) the assignment of "rights" from Stonegate to Nature Coast is a sham and invalid; (iii) Nature Coast does not have the right to enforce the Notes against the Defendants; and (iv) that Nature Coast cannot recover on the Notes under the equitable theory of promissory estoppel.

II. Analysis

A. Summary Judgment Standard

Summary judgment is proper where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In determining whether there is a genuine issue of fact, the Court "must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Foley v. City of Lafayette, Ind., 359 F.3d 925, 928 (7th Cir. 2004). To avoid summary judgment, the opposing party must go beyond the pleadings and "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (internal quotation marks and citation omitted). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is proper against "a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."Id. at 322. The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "The mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson, 477 U.S. at 252.

B. UCC Arguments

Defendants seek summary judgment on Counts I, III, V, and VII of Nature Coast' s complaint on the ground that Nature Coast cannot satisfy the requirements for enforcement of the Notes under the relevant provisions of the UCC. Primarily, they allege that Plaintiff is not a ...


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.