Cessna Finance Corporation v. VYWB, LLC et al, No. 6:2013cv01311 - Document 48 (D. Kan. 2014)
Court Description: MEMORANDUM AND ORDER granting 32 Motion for Summary Judgment. Plaintiff is entitled to recover reasonable attorneys' fees and expenses but a summary judgment finding on the reasonableness of the requested amount of attorneys' fees will be addressed promptly after additional briefing and supplementation with the proper and necessary affidavits and documentation. SEE ORDER FOR DETAILS. Signed by U.S. District Senior Judge Sam A. Crow on 10/20/14. (msb)
Download PDF
<![CDATA[
Cessna Finance Corporation v. VYWB, LLC et al Doc. 48 I N THE UNI TED STATES DI STRI CT COURT FOR THE DI STRI CT OF KANSAS CESSNA FI NANCE CORPORATI ON, Plaint iff vs. Case No. 13- 1311- SAC VYWB, LLC and PARMJI T S. PARMAR, Defendant s. MEMORANDUM AND ORDER The plaint iff Cessna Finance Corporat ion ( “ CFC” ) financed t he defendant VYWB, LLC’s ( “ VYWB’s” ) purchase of t wo j et s for t he t ot al am ount of $13,032,500.00 ( $6,516,250 per j et ) . Prom issory not es and securit y agreem ent s on each j et were execut ed which gave CFC securit y int erest s, and t he defendant Parm j it S. Parm ar ( “ Parm ar” ) also execut ed guarant y agreem ent s t hat uncondit ionally guarant eed VYWB’s obligat ions t o CFC. VYWB default ed when it st opped m aking paym ent s in Decem ber 2008 and aft er. CFC repossessed t he j et s in lat e January of 2009. CFC sold t he j et s in 2010 and brought t his act ion t o recover t he deficiencies due under t he not es and agreem ent s. The defendant s answered t he com plaint raising several defenses t o t heir liabilit y for t hese deficiencies. I n response t o t he plaint iff’s int errogat ories, t he defendant wit hdrew all, or nearly all, of t heir defenses. The plaint iff now m oves for sum m ary j udgm ent arguing t hat t he defendant s’ wit hdrawal of defenses silences any fact ual disput es and ent it les Dockets.Justia.com t he plaint iff t o j udgm ent as a m at t er of law on it s breach of cont ract claim s. On t he j oint m ot ion of t he part ies, t he m agist rat e j udge suspended t he final pret rial conference pending t his ruling on t he plaint iff’s sum m ary j udgm ent m ot ion. ( Dk. 39) . Thus, t he court ’s ruling here is wit hout t he benefit of a pret rial order. Rule 56 aut horizes a court t o “ grant sum m ary j udgm ent if t he m ovant shows t hat t here is no genuine disput e as t o any m at erial fact and t he m ovant is ent it led t o j udgm ent as a m at t er of law.” Fed. R. Civ. P. 56( a) . A fact is m at erial if it would affect t he out com e of a claim or defense under t he governing law. See Anderson v. Libert y Lobby, I nc., 477 U.S. 242, 248 ( 1986) . “ [ T] he disput e about a m at erial fact is “ genuine, . . ., if t he evidence is such t hat a reasonable j ury could ret urn a verdict for t he nonm oving part y.” I d. The essent ial inquiry is “ whet her t he evidence present s a sufficient disagreem ent t o require subm ission t o t he j ury or whet her t he evidence is so one sided t hat one part y m ust prevail as a m at t er of law.” Anderson v. Libert y Lobby, 477 U.S. at 251- 52. The sum m ary j udgm ent m ovant bears t he init ial burden of point ing out t hose port ions of t he record t hat show it ent it led t o j udgm ent as a m at t er of law. Thom as v. Wichit a Coca–Cola Bot t ling Co., 968 F.2d 1022, 1024 ( 10t h Cir.1992) , cert . denied, 506 U.S. 1013 ( 1992) . I f t he m ovant m eet s t hat burden, t he nonm ovant m ust com e forward wit h specific fact s based on adm issible evidence 2 from which a rat ional fact finder could find in t he non- m ovant 's favor. Adler v. Wal- Mart St ores, I nc., 144 F.3d 664, 671 ( 10t h Cir. 1998) . CFC’s m em orandum includes 42 paragraphs of m at erial fact s, and t he court finds t hat t he defendant s have effect ively cont rovert ed only one of t hem , t he am ount of reasonable at t orney’s fees incurred in t his case. I n sum , paragraphs 1- 39 and 41- 42 are uncont rovert ed. The defendant s’ do not creat e a m at erial issue of fact from referencing m ult iple t im es t heir cont ract ual liabilit y for only t hose at t orney’s fees t hat are reasonable. The plaint iff’s st at em ent of fact s includes t he express cont ract t erm s t hat allow only “ reasonable at t orneys’ fees,” and t here is no fact ual or legal disput e bet ween t he part ies on t his general liabilit y. ( Dk. 33, p. 8, ¶ 30) . As t o whet her t he plaint iff has com e forward wit h sufficient proof of t he reasonableness of t he at t orneys’ fees, t his is a m at t er addressed below. The defendant s also have not effect ively cont rovert ed t he plaint iff’s st at em ent , “ CFC perform ed t he inspect ions, m aint enance and repairs on t he Aircraft t hat CFC believed were reasonable and necessary t o prepare t he Aircraft for sale.” I d. at p. 7, ¶ 20. The defendant s have not subm it t ed any argum ent s or evidence support ing a fact ual disput e over whet her t hese “ reasonable and necessary” inspect ions, m aint enance and repairs are inconsist ent wit h t he plaint iff’s dut y t o m it igat e. ( Dk. 46, p.3) . CFC’s paragraph 39 also is not cont rovert ed by t he defendant s’ cit at ion of t heir answer t o t he am ended com plaint . This paragraph accurat ely 3 sum m arizes t he plaint iff’s int errogat ory and t he defendant s’ answers t heret o. The defendant s’ effort t o preserve a failure t o m it igat e defense will be addressed below. Following it s precedent on fee issues, t he court agrees t hat t he CFC’s record is insufficient t o sust ain ¶ 42. The court adopt s by reference t he uncont rovert ed fact s appearing in t he plaint iff’s m em orandum . The following is a sum m ary of t hose uncont rovert ed fact s for t he benefit of providing a cont ext t o t his order and it s rat ionale. 1. I n t his act ion, t he plaint iff CFC is t he lender and secured part y, t he defendant VYWB is t he debt or, and t he defendant Parm ar is t he guarant or. On February 29, 2008, CFC provided financing for VYWB’s purchase of t wo Hawker Jet s, and VYWB execut ed t wo prom issory not es prom ising t o repay $6,516,250.00 plus int erest on each. VYWB also execut ed addendum s set t ing out t he repaym ent t erm s and securit y agreem ent s grant ing CFC a securit y int erest in t he j et s. Parm ar uncondit ionally guarant eed VYWB’s obligat ions under t he not es and securit y agreem ent s by execut ing a separat e guarant y for each j et . I n pert inent part , t he guarant ies provided: [ Parm ar] underst ands and agrees t hat [ his] liabilit y under t his Guarant y is unlim it ed [ and] . . . not hing but full paym ent in cash t o [ CFC] of [ VYWB’s] I ndebt edness, and t he full and t im ely perform ance of all of [ VYWB] ’s ot her obligat ions under t he [ Not es and Securit y Agreem ent s] , shall reduce or release [ Parm ar] from [ his] obligat ions and liabilit ies under t his Guarant y. ( Dk. 33, p. 5, ¶ 11) . 4 2. By failing t o m ake t he paym ent s due on Decem ber 1, 2008, and all subsequent paym ent s when due under t he not es, VYWB default ed on t he not es and securit y agreem ent s. When t he default s were not cured aft er t he proper not ices, CFC repossessed t he j et s on January 21, 2009, and January 30, 2009. 3. As of repossession, t he debt securing t he first j et , N525LR, was $6,273,962.27, and t he debt on t he second j et , N501LR was $6,282,584.81. CFC sent defendant s t he not ice of repossession, out st anding deficiencies, right t o redeem , right t o an account ing, and int ended disposit ion by privat e sale aft er February 20, 2009. The defendant s are not assert ing t hat CFC failed t o com ply wit h t he UCC in it s repossession of t he aircraft . 4. I n it s j udgm ent of what was reasonable and necessary t o prepare t he j et s for sale, CFC perform ed inspect ions, m aint enance and repairs on t he j et s. I t advert ised t he sale of t he j et s, and hired an aircraft sales broker. On March 23, 2010, CFC sold t he N525LR j et for $3,200,000.00. The defendant s are not assert ing t hat t his was a com m ercially unreasonable sale. On July 1, 2010, CFC sold t he N501LR j et for $2,725,000.00, and defendant s also do not challenge t his sale as com m ercially unreasonable. By let t ers dat ed July 2 and 3, 2010, CFC not ified defendant s of t he disposit ion of t he aircraft and of t he out st anding deficiencies. The defendant s do not assert t hat CFC failed t o com ply wit h any UCC provisions in it s disposit ion of t he j et s. 5 5. The not es and securit y agreem ent s obligat e VYWB t o reim burse CFC for any expenses, including reasonable at t orneys’ fees, incurred t o collect a deficiency or t o enforce CFC’s right s under t he not es, securit y agreem ent s, and guarant ies. The guarant ies also provide t hat Parm ar will reim burse CFC for expenses and reasonable at t orneys’ fees incurred t o collect on t hese agreem ent s. 6. From t he gross sale price of t he N525LR j et , t he plaint iff deduct ed t he repossession and disposit ion expenses ( $327,791.61) and accrued int erest from repossession dat e t o sale dat e ( $408,133.56) and applied t he rem aining sale proceeds t o am ount s owed on t he not e result ing in t he t ot al am ount , $4,547,427.84, due and owing as of June 20, 2014, wit h int erest accruing at t he rat e of 5.65% for a per diem rat e of $475.83 from and aft er June 20, 2014, unt il full paym ent is m ade. From t he gross sale price of t he F501LR j et , t he plaint iff deduct ed t he repossession and disposit ion expenses ( $351,568.91) and accrued int erest from repossession dat e t o sale dat e ( $509,276.02) and applied t he rem aining sale proceeds t o am ount s owed on t he not e result ing in t he t ot al am ount , $5,216,936.96, due and owing as of June 20, 2014, wit h int erest accruing at t he rat e of 5.65% for a per diem rat e of $550.69 from and aft er June 20, 2014, unt il full paym ent is m ade. 7. Relying solely on t he affidavit of Robert Hot aling, Jr., CFC’s chief credit officer, t he plaint iff subm it s t hat it has incurred at t orneys’ fees and expenses in t he am ount of $66,558.33 t hrough June 17, 2014, and t hat it 6 will incur fut ure at t orneys’ fees and expenses. Based on his “ experience and involvem ent in such cases,” Mr. Hot aling avers t his t ot al am ount of fees and expenses is “ fair and reasonable.” ( Dk. 33, p. 23) . The defendant s cont est whet her t his averm ent suffices as proof for “ reasonable” at t orney fees’. 8. CFC’s dem and for paym ent of t hese am ount s due has been refused by VYWB and Parm ar. The defendant s point out t hat t his part icular dem anded am ount of at t orneys’ fees was not m ade prior t o t he plaint iffs’ sum m ary j udgm ent m ot ion. As t he uncont rovert ed fact s st at ed above show, t he plaint iff is ent it led t o sum m ary j udgm ent on liabilit y and dam ages, but t he court will insist on addit ional proof t o est ablish t he am ount of reasonable at t orneys’ fees. The plaint iff’s m ot ion of sum m ary j udgm ent is not defeat ed by t he defendant s’ belief t hat t hey have preserved an affirm at ive defense of failure t o m it igat e dam ages or overst at em ent of losses relat ed t o m aint enance and repairs on t he j et s. 1 As for evidence, t he defendant s offer not hing and sim ply allege t he blanket posit ion t hey “ disput e[ s] t he reasonableness of t he . . . [ am ount s] claim ed for m aint enance and repair expenses.” ( Dk. 46, p. 7) . The defendant s say t hey have “ not wit hdrawn t he affirm at ive defense t hat Plaint iff has overst at ed and failed t o m it igat e it s alleged 1 The preservat ion of an affirm at ive defense is an issue t ypically resolved during t he preparat ion of a pret rial order, but t he part ies persuaded t he m agist rat e j udge t o suspend t his im port ant st ep here. 7 dam ages,” and t hey rely on ¶ 23 of t heir answer t o t he am ended com plaint . ( Dk. 10, p. 8) . The defendant s’ answers t o t he plaint iff’s int errogat ories No. 6 and No. 9 est ablish, however, t hat t hey did wit hdraw t he affirm at ive defenses “ t hat Plaint iff failed t o act in a com m ercially reasonable m anner t o m inim ize it s cost s and expenses” and “ t hat Plaint iff’s dem and for dam ages is overst at ed.” ( Dk. 33, pp. 83, 84) . While t he int errogat ories do not refer t o ¶ 23 of t heir answer, t he defendant s fail t o show how t heir answers quot ed above would not encom pass t heir repet it ious affirm at ive defenses of overst at ed dam ages and failure t o m it igat e sum m arized in ¶ 23. I t is t rue t hat “ failure t o m it igat e” only appears in ¶ 23, but t he defendant s have not alleged any fact s or com e forward wit h any evidence showing t hat ¶ 23 was int ended t o address fact ually or legally dist inct circum st ances or argum ent s. As CFC point s out , “ [ i] t is difficult t o conceive how CFC could have act ed in a com m ercially reasonable m anner t o m inim ize it s cost s and expenses and not overst at e it s dam ages, but st ill be found t o have failed t o m it igat e t hose dam ages.” ( Dk. 47, p. 8) . Moreover, t he defendant s have not com e forward wit h properly support ed st at em ent s of fact t o cont rovert t he plaint iff’s st at em ent it “ perform ed t he inspect ions, m aint enance and repairs on t he Aircraft t hat CFC believed were reasonable and necessary t o prepare t he Aircraft for sale.” ( Dk. 33, ¶ 20, p. 7) . The defendant does not cont rovert t he plaint iff’s opinion evidence on t his point . I t is not enough for t he defendant s t o st and 8 on t he m ere assert ion t hat t hey have t his defense and on t he naked allegat ion t hat t hey disput e t he reasonableness of t hese expenses. Sum m ary j udgm ent m ot ions are int ended t o address sit uat ions like t his when t he evidence fails t o present a sufficient disagreem ent for t rial. Thus, whet her t he defendant s have preserved t hese affirm at ive defenses or not , t he court finds t he defendant s have not carried t heir sum m ary j udgm ent burden on t his affirm at ive defense of showing a genuine issue of m at erial fact . The court grant s t he plaint iff’s m ot ion for sum m ary j udgm ent on t he defendant s’ affirm at ive defenses. The defendant s’ second argum ent is t hat t he plaint iff has not fulfilled it s burden of showing t he reasonableness of it s request ed at t orneys’ fees. The defendant s cit e t his court ’s recent decision in TST Truck I nsurance Lt d. v. First Nat ional Bank of Wam ego, 2014 WL 1047993 ( D. Kan. Mar. 18, 2014) , which addressed t he st andard and burden of proof governing cont ract ual at t orneys’ fees. Following federal and st at e court precedent , t he court specifically held t hat t he burden is on t he m ovant “ seeking t he fees t o show t heir ent it lem ent t o such an aw ard” and “ t o j ust ify t he reasonableness of t he fees” request ed. I d. at * 13. The decision discusses t he need for sufficient proof by affidavit s or docum ent at ion. I d. at * 14- * 15. The affidavit offered by t he plaint iff here is wholly insufficient for t he court t o conclude t hat t he fees request ed here are j ust ified as reasonable. I n short , t he m oving plaint iff has not carried it s init ial burden of providing and cit ing t hose 9 port ions of t he record t hat show it is ent it led t o j udgm ent as a m at t er of law on t he reasonableness of it s fees request . The court will deny a sum m ary j udgm ent finding at t his t im e on t he am ount of at t orneys’ fees and direct s t he plaint iff t o provide it s m ot ion wit h sufficient det ailed affidavit s and docum ent at ion t o sust ain a finding of reasonableness on at t orneys’ fees t o dat e. From t he filing dat e of t he plaint iff’s m ot ion for fees, t he defendant s will have 14 days t o file t heir response. The court will rule prom pt ly on t he reasonableness of t he fees request ed. I T I S THEREFORE ORDERED t hat t he plaint iff’s m ot ion for sum m ary j udgm ent ( Dk. 32) is grant ed on count one in t he am ount of $4,547,427.84, wit h int erest accruing at t he rat e of 5.65% for a per diem rat e of $475.83 from and aft er June 20, 2014, unt il full paym ent is m ade, and on count t wo in t he am ount of $5,216,936.96, wit h int erest accruing at t he rat e of 5.65% for a per diem rat e of $550.69 from and aft er June 20, 2014, unt il full paym ent is m ade; I T I S FURTHER ORDERED t hat t he plaint iff is ent it led t o recover reasonable at t orneys’ fees and expenses but a sum m ary j udgm ent finding on t he reasonableness of t he request ed am ount of at t orneys’ fees will be addressed prom pt ly aft er addit ional briefing and supplem ent at ion wit h t he proper and necessary affidavit s and docum ent at ion. 10 Dat ed t his 20t h day of Oct ober, 2014, Topeka, Kansas. s/ Sam A. Crow Sam A. Crow, U.S. Dist rict Senior Judge 11
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
