United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY UNITED STATES DISTRICT JUDGE.
diversity suit for breach of contract, Medallion Bank has
sued several corporate entities and their sole proprietor,
Laurentiu Ionescu, for defaulting on five loans guaranteed by
Ionescu. Medallion Bank has moved for summary judgment.
is the sole proprietor, president, and secretary of the five
corporate defendants: Lincolnshire Service I, Lincolnshire
Service II, Lincolnshire Service, IL 1, and IL 2. In five
separation transactions in 2013 and 2014, Medallion Bank
loaned money to the corporate defendants to finance taxi
medallion purchases. The parties dispute the exact dates on
which they executed the loans, but they otherwise agree on
the facts. The approximate principal amounts and specific
borrowers for the five loans were the following: (1) $1.4
million to Lincolnshire Service I; (2) $1.6 million to
Lincolnshire Service II, (3) $2.6 million to Lincolnshire
Service and Lincolnshire Service II, (4) $1.2 million to IL 1
and IL 2, and (5) $200, 000 to Lincolnshire Service. Ionescu
executed promissory notes for each loan as the president and
secretary of the corporate borrowers. The notes required the
borrowers to make monthly payments and provided that
Medallion Bank could assess late fees for overdue payments.
Ionescu, in his individual capacity, signed a written
guaranty for each loan.
defendants made monthly payments on the loans for a time, but
they all eventually defaulted when the loans matured in May
2018. And Ionescu, the guarantor, did not pay off the loans
after the defendants defaulted. Medallion Bank has sued the
corporate defendants for breach of the promissory notes and
Ionescu for breach of the five guaranties. Medallion Bank has
moved for summary judgment on all of its claims.
judgment is appropriate if 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 fact is material if it
affects the outcome of the suit. Moore v. Wells Fargo
Bank, N.A., 908 F.3d 1050, 1054 (7th Cir. 2018). In
reviewing a motion for summary judgment, a court must view
the evidence in the light most favorable to the nonmovant and
draw all reasonable inferences in the nonmovant's favor.
Kvapil v. Chippewa County, 752 F.3d 708, 712 (7th
Cir. 2014). A court deciding a summary judgment motion may
consider only materials that either "should be
admissible in evidence or point to evidence that would be
admissible at trial." Cehovic-Dixneuf v. Wong,
895 F.3d 927, 931 (7th Cir. 2018).
the defendants argue that the promissory notes and guaranties
that Medallion Bank submitted in support of its motion for
summary judgment are inadmissible under the business records
exception to the hearsay rule. See Fed. R. Evid.
803(6). This argument lacks merit because the contracts are
not hearsay in the first place. Rather, they are "verbal
acts" offered to prove the legal effect of an agreement
between the parties. See Schindler v. Seiler, 474
F.3d 1008, 1010 (7th Cir. 2007);2 McCormick on Evidence
§ 249 (7th ed. 2016).
the promissory notes and guaranties were hearsay, Medallion
Bank has properly laid the foundation to admit them as
business records under Federal Rule of Evidence 803(6). The
rule requires that a custodian of the record or any
"other qualified witness" testify that it was the
"regular practice" of the business to make and keep
the record; at the summary judgment stage, an affidavit from
such a witness will suffice. Thanongsinh v. Bd. of Educ.,
Dist. U-46, 462 F.3d 762, 777 (7th Cir. 2006);
Fed.R.Evid. 803(6). A "qualified witness" need not
have personally created the record but "need only be
familiar with the company's recordkeeping
practices." Cocroft v. HSBC Bank USA, N.A., 796
F.3d 680, 686 (7th Cir. 2015). Medallion Bank submitted the
promissory notes and guaranties through an affidavit from its
Assistant Treasurer, Marie Russo. She testified that she is
familiar with Medallion Bank's recordkeeping practices.
Russo also stated that she had reviewed the promissory notes
and guaranties pertaining to the defendants' loans and
these were created in the ordinary course of Medallion
Bank's business. This testimony sufficiently lays the
foundation for admitting the agreements into evidence.
read of the defendants' argument suggests that their real
objection may be that the promissory notes and guaranties
were not properly authenticated under Federal Rule of
Evidence 901(a), which requires showing that "the item
is what the proponent claims it is." Authentication can
be made through a sworn affidavit of a witness with
knowledge. See Fed. R. Evid. 901(b)(1); Conway
v. Done Rite Recovery Servs., Inc., No. 14 C 5182, 2015
WL 1989665, at *3 (N.D. Ill. April 30, 2015). Russo
sufficiently authenticated the promissory notes and
guaranties by testifying that she is familiar with Medallion
Bank's recordkeeping practices, she routinely reviews its
records, and the agreements were created in the regular
course of Medallion Bank's business. See Conway,
2015 WL 1989665, at *3.
defendants question the authenticity of the promissory notes
and guaranties based on Ionescu's testimony that he did
not recall specific details about their execution, including
the exact dates he signed them, the presence of notaries, or
whether he received copies of the documents. But none of
these undermine the authenticity of the agreements, and the
defendants do not cite any authority that suggests otherwise.
In fact, Ionescu's testimony supports, rather than
refutes, the authenticity of the promissory notes and
guaranties: he admitted that it was his signature on each and
that he had no reason to doubt the authenticity of the
signatures. In sum, the Court may consider the promissory
notes and guaranties because they would be admissible at
Court applies the law of the forum state, Illinois, as
neither side contends that another state's law should
apply. Ryerson Inc. v. Fed. Ins. Co., 676 F.3d 610,
611 (7th Cir. 2012). A breach of contract claim under
Illinois law has four elements: (1) the existence of a valid
and enforceable contract; (2) performance by the plaintiff;
(3) breach by the defendant; and (4) injury to the plaintiff.
Hess v. Bresney, 784 F.3d 1154, 1158-59 (7th Cir.
2015) (stating Illinois law).
is no genuine factual dispute regarding any of the elements
of Medallion Bank's breach of contract claims. The
defendants do not contest the existence of valid and
enforceable contracts with Medallion Bank. Ionescu admitted
that he executed a promissory note for each loan, that it was
his signature on the notes and guaranties, and that he had no
reason to doubt the authenticity of those agreements. In
light of this testimony, Ionescu's inability recall the
specific details about the execution of the agreements, such
as the exact dates on which he executed them, does not
undermine their enforceability. The defendants do not cite
any authority that would suggest otherwise.
remaining three elements of the breach of contract claim are
likewise not genuinely disputed. Ionescu testified that
Medallion Bank performed its obligations by transferring
funds to the defendants in the full amounts set forth in the
promissory notes. He also admits that the defendants breached
their obligations under the notes and injured Medallion Bank
when they failed to pay as required. And Ionescu testified
that he failed ...