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Gulf Coast Bank and Trust Co. v. Anders

United States District Court, E.D. Louisiana

May 28, 2019

GULF COAST BANK AND TRUST CO.
v.
HOWARD G. ANDERS

         SECTION “L” (4)

          ORDER AND REASONS

         Before the Court is Plaintiff's unopposed motion for summary judgment. R. Doc. 44. For the reasons that follow, the unopposed motion is GRANTED.

         I. BACKGROUND

         This breach of contract action arises out of a Receivables Purchase Agreement (“RPA”) between Plaintiff Gulf Coast Bank and Trust Company and Newberry Bakers, Inc. (which is not a party to this case). Defendant Howard Anders signed a Limited Guaranty agreeing to be solidarily liable for Newberry's obligations under the RPA. Gulf Coast sued Anders for his alleged breach of the Limited Guaranty, and now moves for summary judgment. The motion is unopposed.

         II. LAW AND ANALYSIS

         Summary judgment is proper when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed.R.Civ.P. 56(c)). A genuine issue of material fact exists if a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1996). “[U]nsubstantiated assertions, ” “conclusory allegations, ” and merely colorable factual bases are insufficient to defeat a motion for summary judgment. See Hopper v. Frank, 16 F.3d 92, 97 (5th Cir. 1994); Anderson, 477 U.S. at 249-50. In ruling on a summary judgment motion, a court may not resolve credibility issues or weigh evidence. See Int'l Shortstop, Inc. v. Rally's Inc., 939 F.2d 1257, 1263 (5th Cir. 1991). Furthermore, a court must assess the evidence, review the facts and draw any appropriate inferences based on the evidence in the light most favorable to the non-moving party. See Daniels v. City of Arlington, Tex., 246 F.3d 500, 502 (5th Cir. 2001).

         The Court may not grant Gulf Coast's motion for summary judgment “merely because it is unopposed.” Bustos v. Martini Club Inc., 599 F.3d 458, 468 (5th Cir. 2010). Indeed, “[t]he movant has the burden of establishing the absence of a genuine issue of material fact and, unless he has done so, the court may not grant the motion, regardless of whether any response was filed.” Hetzel v. Bethlehem Steep Corp., 50 F.3d 360, 362 (5th Cir. 1995).

         Having reviewed the evidence and arguments submitted by Gulf Coast, the Court finds that Gulf Coast's unopposed motion has merit. Under the terms of the Limited Guaranty, Texas law controls. Gulf Coast is entitled to summary judgment if it shows “(1) the existence and ownership of a guaranty contract; (2) the terms of the underlying contract by the holder; (3) the occurrence of the conditions upon which liability is based; and (4) the failure or refusal to perform by the guarantor.” Chahadeh v. Jacinto Med. Grp., P.A., 519 S.W.3d 242, 246 (Tex. App. 2017).

         a. The Underlying Contract - the Receivables Purchase Agreement

         In September 2016, Gulf Coast and Newberry Bakers entered in to a Receivables Purchase Agreement (“RPA”). The RPA entails an agreement whereby Newberry would, among other things, occasionally offer to sell its unpaid accounts receivable to Gulf Coast and, in exchange, Gulf Coast would purchase certain unpaid receivables in its sole discretion. The RPA stated that all “invoices related to all of the Receivables … shall set forth the Lockbox Address as its sole address for payment. [Newberry] shall establish the lock box with [Gulf Coast] under [Gulf Coast's] exclusive control using the Lockbox Address and shall request in writing or otherwise take reasonable steps to ensure that all payments be sent directly to such Lockbox.” R. Doc. 44-2 at 1-2. It also required Newberry to deliver to Gulf Coast “any payment or proceeds that it may receive with respect to any Receivable Asset” within one business day following Newberry's receipt thereof. Id. at 2. If Newberry failed to do so, it became liable to Gulf Coast for a Misdirected Payment Fee. Id.

         The RPA also required each Receivable offered for sale to be free from any defenses, disputes, offsets, counterclaims, or rights of return or cancellation. Newberry's failure to abide by its obligations under the RPA constitutes an “Event of Default, ” and Newberry becomes “obligated to repurchase” the Receivable.

         As collateral for its obligations under the RPA, Newberry granted to Gulf Coast a continuing first priority security in and to all of Newberry's current and future “(i) accounts, chattel paper, other Receivables, instruments (including promissory notes), investment property, documents, and general intangibles; including without limitation all reserve accounts, Residual Payments, credits and reserves, and letter-of credit rights, (ii) all deposit accounts, (iii) all equipment and inventory, and (iv) all proceeds from any of the foregoing” (the “Collateral”). R. Doc. 1-1.

         Under the RPA, Newberry expressly warrants and represents that “the Collateral is not subject to, and is free and clear of, any lien, claims, pledge, security, or encumbrance of any kind, other than those granted to [Gulf Coast]” under the RPA. R. Doc. 44-2 at 3. These representations and warranties are “continuing in nature and … remain in full force and effect until all obligations and sums owing to [Gulf Coast] by [Newberry] have been fully performed, paid and satisfied, whether or not [the RPA] is canceled or terminated.” Id. The RPA provides that an Event of Default occurs when “any warranty of representation [in the RPA] proves to be false in any way, however minor.” Id.

         b. Anders's ...


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