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Automotive Finance Corp. and Manheim Automotive Financial Services v. Joliet Motors

January 6, 2011

AUTOMOTIVE FINANCE CORP. AND MANHEIM AUTOMOTIVE FINANCIAL SERVICES, INC., PLAINTIFFS,
v.
JOLIET MOTORS, INC. AND CINDY BOLIAUX, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court are Plaintiffs Automotive Finance Corp. (hereinafter, "Automotive") and Manheim Automotive Financial Services, Inc.'s (hereinafter, "Manheim") Motions for Summary Judgment to pierce Joliet Motors, Inc.'s (hereinafter, "JMI") corporate veil and find Defendant Cindy Boliaux (hereinafter, "Cindy") personally liable for judgments entered against JMI. For the reasons stated below, the Motions are granted.

I. BACKGROUND

Edward Boliaux ("Edward") operated and was a part owner of the car dealership EMC Automotive ("EMC") in Joliet, Illinois. He was married to Cindy, during which time Cindy owned 51 percent of EMC; she transferred her ownership in the dealership to him when they divorced in September 2005.

EMC had a financing agreement with Automotive, under which Automotive had a perfected security interest in EMC's vehicles, customer accounts, and other collateral. Automotive lent EMC money and extended it credit until July 28, 2008, when it learned that EMC had sold vehicles in which Automotive held a security interest without making the required payments, as well as not forwarded it agreed upon payments from retail installment contracts. Automotive filed an action against EMC and Edward in the Circuit Court of Will County in 2009. That court granted summary judgment in favor of Automotive against EMC and Edward, and entered a judgment in the amount of $647,486.98, plus $119,158.50 in attorneys' fees and $5,286.07 in costs.

Manheim provided EMC financing to purchase vehicles and sell them via installment contracts. Manheim had a perfected security interest in EMC's vehicles, customer contracts, and other collateral. After EMC defaulted on this financing, Manheim also brought an action against EMC and Edward in the Circuit Court of Will County. That court granted summary judgment in favor of Manheim against EMC and Edward, with a judgment in the amount of $410,019.88. Around September 2008, EMC ceased operations, and Joliet Motors and JM Motors signs were erected on its property. Cindy owns JMI, and serves as its sole officer, director, president, secretary, and treasurer.

Edward filed for Chapter 7 bankruptcy on April 10, 2009. On May 7, 2010, Automotive filed its Complaint with this Court against JMI and Cindy, seeking to find them liable for the Will County judgment. Shortly thereafter, Manheim filed a similar Complaint. The two cases were consolidated on October 8, 2010. On October 7, the Court entered a final judgment against Joliet Motors for Manheim's Will County judgment of $410,019.88, finding that JMI has successor liability as a mere continuation of EMC. On October 13, the Court entered a similar judgment that made JMI liable for Automotive's Will County judgment of $771,931.64.

Plaintiffs move for summary judgment against Cindy, asking the Court to pierce JMI's corporate veil and find Cindy individually liable for the Will County court judgments against EMC.

II. LEGAL STANDARD

Summary judgment is proper if "the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A fact is material if it could affect the suit's outcome under the governing law, and a dispute is genuine where the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

In ruling on summary judgment, the Court does not to weigh the evidence or determine the truth of the matter, but determines whether a genuine issue of material fact exists that warrants trial. See id. at 249. In making this determination, the Court must view all the evidence and draw any reasonable inferences therefrom in the light most favorable to the nonmoving party. See Miller v. Am. Family Mut. Ins. Co., 203 F.3d 997, 1003 (7th Cir. 2000). The moving party bears the burden of establishing the basis for its motion, together with evidence demonstrating the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met this burden, the nonmoving party may not rest on mere allegations, but must present specific facts showing that a genuine issue exists for trial. See Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir. 1984).

III. ANALYSIS

As an initial matter, Cindy has submitted a Motion for Leave to Supplement Responses to Plaintiffs' Motions for Summary Judgment. ECF No. 72. She submitted this Motion almost one month after she submitted her initial Response to Plaintiffs' Motions. ECF No. 61. Her initial Response failed to respond to either Plaintiff's Local Rule 56.1 Statement of Material Facts, and therefore they were deemed admitted. See N.D. Ill. R. 56.1(a)(3)(B). The attorney who submitted this Response subsequently withdrew (ECF No. 65), and Cindy filed a Motion to Substitute Attorney (ECF No. 70), which the Court granted.

Cindy claims that her prior counsel's failure to comply with Local Rule 56.1 unduly prejudiced her in this matter. Cindy, however, "must be held accountable for the acts and omissions of [her] attorneys." Pioneer Inv. Servs. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 396 (1993). A court can disregard late-filed motions and supporting materials. See Jovanovic v. In-Sink-Erator Div. of Emerson Elec. Co., 201 F.3d 894, 897 (7th Cir. 2000). Although under no obligation to grant Cindy's Motion, the Court reluctantly, and in consideration of Plaintiffs' objections stated in open court on December 15, 2010, grants Cindy's Motion for Leave to Supplement. Although not yet properly filed, the Court considers Cindy's new Response, Statement of Material Facts, and Response to Plaintiffs' Statements of Material Facts in ruling on summary judgment. ECF No. 72 Exs. 1, 2, 3. Plaintiffs, however, need not file a reply to the new materials (unless they elect ...


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