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Sand Capital VI LLC v. Dickler

United States District Court, N.D. Illinois, Eastern Division

July 14, 2017

SAND CAPITAL VI LLC, Plaintiff,
v.
MARSHALL N. DICKLER and LARRY P. KANER, Defendants.

          MEMORANDUM OPINION AND ORDER

          MARY M. ROWLAND United States Magistrate Judge

         This case involves a claim for losses, damages, and costs, including attorneys' fees and post-petition interest, that Plaintiff claims it is due under indemnity and guaranty agreements that were given by Defendants as collateral support for debts owed by two LLCs that were ultimately owned by Defendants. The parties have consented to the jurisdiction of the United States Magistrate Judge, pursuant to 28 U.S.C. § 636(c), and have filed cross-motions for summary judgment. For the reasons set forth below, summary judgment is granted in Sand Capital's favor.

         I. UNDISPUTED MATERIAL FACTS

         In 2004, Dika-Homewood LLC and Dika-Matteson LLC (collectively, the Borrowers) entered into loans with Wachovia. (Pl's ¶¶ 7-8).[1] The Borrowers are owners of shopping centers located in Homewood and Matteson (the Properties), which are each managed by Dika-Management. (Def's ¶¶ 7, 8, 12, 13). Defendants are members of and managers of Dika-Management. (Id. ¶ 8). The loans were evidenced by notes and secured by mortgages encumbering the Properties. (Pl's ¶¶ 9, 12). The notes were further secured by Indemnity and Guarantee Agreements (the Agreements), [2] which were executed by Defendants. (Id. ¶¶ 10, 11, 13, 14). Thereafter, the loans, including the notes, mortgages and Agreements, were assigned from time to time, and in 2015, the loans were assigned to Plaintiff, which became the holder of the notes, mortgages, and Agreements. (Id. ¶¶ 15-18). Each of the Agreements provide that Defendants would be fully liable for the payment of: (a) any debt, obligation, or liability that the Borrowers were relieved of in the course of a bankruptcy case; (b) reasonable costs and expenses, including attorneys' fees, incurred by Plaintiff as a result of the Properties becoming assets in the Borrowers' voluntary bankruptcies; and (c) all costs and expenses, including attorneys' fees, incurred by Plaintiff in order to enforce the Agreements. (Id. ¶¶ 19-21).

         In February 2015, each Borrower filed a voluntary Chapter 11 bankruptcy petition. (Pl's ¶¶ 22, 24). The Properties each became an asset in the respective Borrower's bankruptcy estate. (Id. ¶¶ 23, 25). In July 2016, the Bankruptcy Court entered orders confirming the Borrowers' plans. (Id. ¶ 32). In September 2016, Plaintiff received $2, 711, 979.81 from Dika-Matteson and $4, 916, 290.81 from Dika-Homewood. (Id. ¶¶ 34, 35). These amounts, when added to payments made during the bankruptcy by the Borrowers, equaled Plaintiff's proofs of claim filed in the applicable bankruptcy case but did not include either post-petition interest due on the notes or the attorney fees and expenses incurred by Plaintiff in either the bankruptcy court or this court. (Id. ¶¶ 36-37).

         II. DISCUSSION

         A. Summary Judgment Standards

         Summary judgment is proper only if the “materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” “shows that 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), (c)(1)(A); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The Court views the evidence in the light most favorable to the nonmoving party and draws all reasonable inferences in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). To avoid summary judgment, the party who bears the burden of proof cannot rely on the pleadings alone, but must “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 250 (citation omitted); see Celotex, 477 U.S. at 324 (Rule 56 “requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.”) (citation omitted).

         The Seventh Circuit “has recognized that summary judgment is particularly appropriate in cases involving the interpretation of contractual documents.” Ryan v. Chromalloy Am. Corp., 877 F.2d 598, 602 (7th Cir. 1989). “Where the contract is unambiguous, a court must determine the meaning of the contract as a matter of law.” Murphy v. Keystone Steel & Wire Co., a Div. of Keystone Consol. Indus., 61 F.3d 560, 565 (7th Cir. 1995). A contract is unambiguous “if it is susceptible to only one reasonable interpretation.” Id. The contract should be read as a whole so that all its parts will be given effect, Preze v. Bd. of Trustees, Pipefitters Welfare Fund Local 597, 5 F.3d 272, 274 (7th Cir. 1993), and related documents must be read together, Lippo v. Mobil Oil Corp., 776 F.2d 706, 713 n. 13 (7th Cir. 1985).

         B. The Agreements Entitle Plaintiff to Unpaid Interest and Attorneys' Fees

         The parties agree that their dispute is governed by the Agreements. There is also no dispute that each Defendant executed his respective Agreement, that the Agreements were assigned to Plaintiff, and that Plaintiff fully performed its obligations under the Agreements. (Pl's ¶¶ 10, 11, 13, 14; Lau Aff. ¶¶ 20-23, 39; Def's ¶¶ 16, 21). The parties dispute, however, whether the Agreements entitle Plaintiff to post-petition interest and attorneys' fees.

         Section One of the Agreements requires each Defendant, as personal indemnifiers, to pay certain costs if specified events take place. Regarding voluntary bankruptcies, the Agreements require Defendants to:

pay, protect, defend and save [Plaintiff] harmless from and against . . . any and all liabilities, obligations, losses, damages, reasonable costs and expenses (including, without limitation, reasonable attorneys' fees), causes of action, suits, claims, demands and judgments of any nature . . . (collectively, “Costs”) which may at any time be imposed upon, incurred by or awarded against [Plaintiff] as a result of . . . the Property or any part thereof becoming an asset in [ ] a voluntary bankruptcy or insolvency proceeding.

(Pl.'s ¶ 19) (quoting Agreements § 1(j)) (Section 1(j)) (emphasis added). Section One contains a Final ...


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