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Firstmerit Bank, N.A., A Nationally Chartered Bank, As Successor In v. Mervyn Dukatt and Carolyn Dukatt

September 26, 2012

FIRSTMERIT BANK, N.A., A NATIONALLY CHARTERED BANK, AS SUCCESSOR IN INTEREST TO MIDWEST BANK AND TRUST, AN ILLINOIS BANKING CORPORATION, PLAINTIFF,
v.
MERVYN DUKATT AND CAROLYN DUKATT, DEFENDANTS.



The opinion of the court was delivered by: Hon. Marvin E. Aspen

MEMORANDUM OPINION AND ORDER

MARVIN E. ASPEN, District Judge:

Plaintiff FirstMerit Bank, N.A. ("FirstMerit") brings this action to enforce a Guarantee signed by Defendants Mervyn and Carolyn Dukatt. The action is before us on diversity jurisdiction. FirstMerit filed a motion summary judgment on July 5, 2012. For the reasons set forth below, we grant the motion.

BACKGROUND*fn1

In August 2006, Defendants, acting through their investment vehicle Tierra Buena Investments, LLC, received a loan for $753,525 from Midwest Bank and Trust Co. ("Midwest Bank"). (Pl. 56.1 Stat. ¶ 8.) In exchange for the loan, Tierra Buena executed and delivered a promissory note ("Note") to the order of Midwest Bank. (Pl. 56.1 Stat. ¶ 9.) Pursuant to the Note, Tierra Buena promised to pay Midwest Bank $753,525, together with interest payable at the rates and in the manner provided in the Note. (Id. ¶ 10.) To secure the Note, Defendants executed and delivered a Continuing Guarantee, stating that each Defendant "unconditionally guarantee[s] and promise[s] to pay . . . any and all indebtedness and other obligations of Tierra Buena" under the Note; the Continuing Guarantee incorporated the Note, Loan Agreements and all other related documents. (Id. ¶¶ 11--12; Decl.of Maxwell at Ex. 4 ¶ 1.) The Note provided for a default interest rate of 11.25% and a late charge fee of five percent of the unpaid sum to be added when any regularly scheduled payment was not paid within ten days of its due date. (Id. ¶ 19--20.) The Continuing Guarantee also provided that Defendants would pay Lender, defined as Midwest Bank, reasonable attorney fees and all other costs incurred enforcing and collecting the obligations. (Pl. 56.1 Stat. ¶ 13; Decl. of Maxwell, Ex. 4 ¶ 15.)

The Illinois Department of Financial and Professional Regulations closed Midwest Bank on May 14, 2010 and appointed the Federal Deposit Insurance Corporation ("FDIC") as Receiver. (Decl. of Maxwell ¶ 4.) In a transaction with the FDIC, FirstMerit purchased and became the owner of substantially all of the loans and other assets of Midwest Bank, including the Note and related documents that are the subject of this litigation. (Id. ¶¶ 5--6.) Accordingly, FirstMerit is the successor by assignment to the rights and obligations under the Continuing Guarantee. (Pl. 56.1 Stat. ¶ 2.)

When the Note matured in 2011, Tierra Buena failed to pay the outstanding principal, interest, and other charges due; such action constituted an Event of Default. (Pl. 56.1 Stat. ¶¶ 16--17.) Pursuant to the terms of the Note, the Event of Default gave Lender the right to declare the Note fully due and payable and to proceed to enforce its rights. (Id. ¶ 18.) FirstMerit thereafter made a demand upon Tierra Buena for full and immediate payment, a copy of which was sent to Defendants. (Id. ¶¶ 21--22.)

Defendants have failed to pay all of the outstanding principal and interest owed. (Id. ¶¶ 23--24.) FirstMerit asserts that as of June 21, 2012, $742,099 is due and owing-consisting of principal balance, interest through June 21, 2012, and late charges-plus additional costs and fees. (Id. ¶ 25.) FirstMerit further claims that interest is accruing at the rate of $205.29 per diem. (Id.)

Defendant filed a Local Rule 56.1 Statement (mislabeled a 56.2 Statement, Dkt. No. 26) asserting only four facts: (1) Mervyn Dukatt is a defendant and filed a proper Declaration; (2) Duckatt's Declaration outlines charges made by Midwest Bank for which FirstMerit seeks recovery; (3) the amount disputed is $2,995.63; and (4) Maxwell's Declaration, relied on by FirstMerit, does not authenticate purported business records, and therefore his testimony based on the records are inadmissible. (Def. 56.1 Stat. ¶¶ 1--4.)

STANDARD OF REVIEW

Summary judgment is proper only when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine issue for trial exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986). This standard places the initial burden on the moving party to identify those portions of the record that "it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986) (internal quotations omitted). Once the moving party meets this burden of production, the nonmoving party "must go beyond the pleadings" and identify portions of the record demonstrating that a material fact is genuinely disputed. Id.; Fed. R. Civ. P. 56(c). In deciding whether summary judgment is appropriate, we must accept the nonmoving party's evidence as true, and draw all reasonable inferences in that party's favor. See id., 477 U.S. at 255, 106 S. Ct. at 2513.

ANALYSIS

To forestall summary judgment, Defendants make two arguments. First, Defendants assert that there is a question of fact about $2,995.63 worth of fees. Second, Defendants argue that FirstMerit has failed to authenticate business records on which ...


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