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Aviation Sales, LLC v. People Express Airlines, Inc.

United States District Court, Seventh Circuit

October 16, 2013

AVIATION SALES, LLC, Plaintiff,
v.
PEOPLE EXPRESS AIRLINES, INC., TEM ENTERPRISES d/b/a XTRA AIRWAYS, and MICHAEL MORISI Defendants.

AVIATION SALES, LLC, Daniel Lynch, One of Its Attorneys.

MOTION FOR ENTRY OF EX PARTE JUDGMENT BY CONFESSION

Aviation Sales, LLC ("Aviation Sales"), by its undersigned counsel, submits this Motion for Entry of an Ex Parte Judgment by Confession against defendants People Express Airlines, Inc. ("People Express") and TEM Enterprises d/b/a XTRA Airways ("TEM"), and states as follows:.

1. The above-captioned cause was filed on September 19, 2013 and is presently pending before this Court.

2. Plaintiff asserts in its Complaint (i) a claim against defendants People Express and TEM for breach of contract arising out of a promissory note executed by the defendant Morisi, as President and CEO of People Express and TEM, in favor of Plaintiff dated September 3, 2013 in the original principal amount of $171, 000.00 (the "Note") (a true and correct copy of the Note is attached hereto as Exhibit A, pp. 1-4) (Count I) and (ii) a claim against the defendant Michael Morisi for breach of contract arising out of a Commercial Guaranty executed by Morisi in favor of Plaintiff dated September 3, 2013 (the "Morisi Guaranty") (a true and correct coy of the Morisi Guaranty is attached as Exhibit A, pp. 5-12) (Count II).

3. 735 ILCS 5/2-1301(c) provides, in pertinent part:

(c)... any person for a debt bona fide due may confess judgment by himself or herself or attorney duly authorized, without process. The application to confess judgment shall be made in the county in which the note or obligation was executed... [a] judgment entered by any court in any county other than those specified herein has no force or validity, anything in the power to confess to the contrary notwithstanding.

735 ILCS 5/2-1301(c) (West 2009).

4. The Note expressly provides at page 3 thereof as follows:

Confession of Judgment. MAKERS HEREBY IRREVOCABLY AUTHORIZE AND EMPOWER ANY ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF RECORD AND TO CONFESS JUDGMENT AGAINST MAKERS FOR THE UNPAID AMOUNT OF THIS NOTE AS EVIDENCED BY AN AFFIDAVIT SIGNED BY AN OFFICER OF PAYEE SETTING FORTH THE AMOUNT THEN DUE, ATTORNEYS' FEES PLUS COSTS OF SUIT, AND TO RELEASE ALL ERRORS, AND WAIVE ALL RIGHTS OF APPEAL. IF A COPY OF THIS NOTE, VERIFIED BY AN AFFIDAVIT, SHALL HAVE BEEN FILED IN THE PROCEEDING, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. MAKERS WAIVE THE RIGHT TO ANY STAY OF EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OR HEREAFTER IN EFFECT. NO SINGLE EXERCISE OF THE FOREGOING WARRANT AND POWER TO CONFESS JUDGMENT WILL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID; BUT THE POWER WILL CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM TIME TO TIME AS PAYEE MAY ELECT UNTIL ALL AMOUNTS OWING ON THIS NOTE HAVE BEEN PAID IN FULL. MAKERS HEREBY WAIVE AND RELEASE ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH MAKERS MIGHT HAVE AGAINST ANY ATTORNEY ACTING UNDER THE TERMS OF AUTHORITY WHICH MAKERS HAVE GRANTED HEREIN ARISING OUT OF OR CONNECTED WITH THE CONFESSION OF JUDGMENT HEREUNDER.

Exhibit A, p. 2.

5. Plaintiff submits herewith as Exhibit B the Affidavit of Victoria Ricks, sole Member and Manager of Aviation Sales, verifying the Note and setting forth the amounts from People Express and TEM due under the Note.

6. Plaintiff also submits herewith as Exhibit C a Confession executed by Mónica M. Millán, a licensed Illinois attorney, on behalf of Defendants People Express and TEM confessing judgment against Defendants pursuant to the express provision of the Note.

7. Finally, Plaintiff submits herewith as Exhibit D the affidavit of Daniel Lynch setting forth the attorneys' fees and costs incurred in prosecuting this matter.

WHEREFORE, Plaintiff, Aviation Sales, respectfully requests that this Court, pursuant to the express confession of judgment provisions of the Note, along with the Confession submitted herewith, (a) enter judgment by confession in favor of Plaintiff and against the Defendants People Express and TEM on Count I of the Complaint and (b) grant such further and additional relief as this Court may deem just and proper.

Exhibit A

PROMISSORY NOTE

Promise to Pay. TEM Enterprises d/b/a XTRA Airways and People Express Airlines, Inc. ("Makers") hereby promise to pay to the order of Payee, at Payee's address set forth above or such other address as Payee may from time to time designate, the principal sum of One Hundred Seventy-One Thousand Dollars ($171, 000.00).

Payment. The Payee of this Promissory Note (the "Note"), in accordance with the provisions of the June 21, 2013 Preliminary Terms Agreement ("Terms Agreement") between TEM Enterprises and Payee, made an advance of $250, 000.00 (the "Initial Funding"). Payee acknowledges that Makers have repaid $100, 000.00 of the Initial Funding and a rent payment of $21, 000.00, in accordance with the provisions of the July 19, 2013 Letter Agreement ("Letter Agreement"). The amount outstanding on the Note shall bear interest thereon from the date hereof to and including the date this Note is paid in full, at the following fixed rate: from the date of this Note until the Maturity Date (as defined above), eighteen percent (18%) per annum. Interest shall be collected based upon a 360-day year multiplied by the actual number of days for which interest has accrued. Payments shall be made by Makers to Payee in accordance with the following:

(a) If Makers make a payment of $150, 000.00 on or before September 18, 2013, Payee shall deem the Note to be satisfied in full;
(b) If Makers fail to pay $150, 000.00 on or before September 18, 2013, Makers promise to pay to the order of Payee, a monthly rent payment of $21, 000.00, in accordance with the terms of the Letter Agreement, by no later than September 18, 2013;
(c) Makers expressly acknowledge that the payment of $21, 000.00 due on Wednesday, September 18, 2013 does not constitute interest on the Note, but rather rent due under the Letter Agreement; and

(d) In the event that the $21, 000.00 rent payment is timely made on September 18, 2013, Makers promise to pay the order of Payee, a repayment in the amount of $150, 000.00 by Thursday, October 3, 2013.

Collateral. This Note shall be collateralized by the personal guarantee of Michael Morisi (attached as Exhibit 1 to this Note). Upon the occurrence of an Event of Default (as defined in the Terms Agreement), both Payee and Makers shall have all the rights and remedies described in the Terms Agreement.

Prepayment. This Note may be paid in full or part by the Makers at any time prior to the Maturity Date without premium or penalty.

Attorneys' Fees; Expenses. Makers will pay and the Payee of this Note shall be awarded as a part of any judgment upon this Note all reasonable costs of collection paid or incurred by the Payee in enforcing this Note upon default, including but not limited to attorney fees and costs related to the preparation, prosecution and appeal of any enforcement action.

Jury Waiver. Makers and Payee hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Makers or Payee against the other.

Confidentiality. This Note and the terms, conditions and information contained herein are confidential and are between Maker and Payee only and will not be disclosed by a party to third parties except (a) with the written authority of the other party hereto, (b) so far as may be necessary for the proper performance of its obligations hereunder, (c) as required by law or as ordered by a court of competent jurisdiction or by the relevant governmental entity responsible for taxation or any other applicable regulatory authority, and (d) to such ...


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