BMO HARRIS BANK N.A. v. BAKER & SIMMONS LOGISTICS, LLC
1:16-cv-03208
S.D. Ind.Oct 24, 2018Background
- BSL entered five equipment loan/security agreements: three with GE Capital and two with Transportation Truck and Trailer Solutions, LLC (TTTS).
- Leavell and Moore each signed multiple guaranty agreements promising to guarantee BSL’s obligations under those loan agreements.
- TTTS executed a Transfer Acknowledgement assigning five BSL accounts to BMO Harris on November 3, 2016; GE Capital did not sign that document.
- BMO obtained a default judgment against BSL (which did not appear) and sued Leavell and Moore on their guaranties; Leavell and Moore answered but did not respond to BMO’s summary judgment motion.
- BMO sought summary judgment against the guarantors, alleging assignment of lender rights to BMO and alleging damages, but its evidentiary record contained inconsistencies regarding assignment and the claimed damages amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BMO holds enforceable rights under the guaranties via assignment | BMO: GE Capital and TTTS assigned their account rights to BMO (via Transfer Acknowledgement) so BMO can enforce guaranties | Guarantors: (implicit) BMO lacks proof GE Capital assigned its rights; thus BMO lacks privity to enforce GE-related guaranties | Denied summary judgment: record lacks evidence GE Capital assigned rights to TTTS or BMO, creating a factual dispute about BMO’s standing for GE Capital-related guaranties |
| Scope/applicability of guaranties | BMO: guaranties cover BSL obligations to GE Capital and/or TTTS per agreements | Guarantors: (implicit) guaranties apply only to named lenders; absent assignment, BMO cannot enforce them | Denied: three guaranties expressly reference GE Capital; without proof of assignment, question of fact remains whether BMO can invoke those guaranties |
| Damages amount and calculation certainty | BMO: seeks a judgment for funds owed (complaint and brief provide differing totals) | Guarantors: (implicit) damages are not proven with reasonable certainty; BMO’s figures conflict | Denied: court found conflicting damage figures in complaint, brief, and affidavit—BMO failed to prove damages with reasonable certainty |
| Effect of defendants’ failure to respond to motion | BMO: nonresponse means court should accept movant’s asserted facts as admitted | Leavell/Moore: did not file a response | Held: although the court accepts movant’s facts when uncontroverted, BMO’s own record contains material inconsistencies and gaps that create genuine factual disputes; summary judgment still denied |
Key Cases Cited
- Carmody v. Bd. of Trustees of Univ. of Illinois, 893 F.3d 397 (7th Cir. 2018) (summary judgment standard and inference-drawing rule)
- Dade v. Sherwin-Williams Co., 128 F.3d 1135 (7th Cir. 1997) (acceptance of moving party’s facts where non-movant fails to respond under local rule)
- Haegert v. Univ. of Evansville, 977 N.E.2d 924 (Ind. 2012) (elements of breach of contract under Indiana law)
- TW General Contracting Servs., Inc. v. First Farmers Bank & Trust, 904 N.E.2d 1285 (Ind. Ct. App. 2009) (guaranties treated as contracts)
- Entm’t USA, Inc. v. Moorehead Commc’ns, Inc., 897 F.3d 786 (7th Cir. 2018) (requirement that damages be proven with reasonable certainty under Indiana law)
- Flaherty & Collins, Inc. v. BBR-Vision I, L.P., 990 N.E.2d 958 (Ind. Ct. App. 2013) (only parties or those in privity may recover under a contract)