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CONRAIL v. PRIMARY INDUS. CORP.

October 18, 1995

CONSOLIDATED RAIL CORPORATION, Plaintiff, against PRIMARY INDUSTRIES CORPORATION, Defendant.

William C. Conner, Senior U.S. District Judge


The opinion of the court was delivered by: CONNER

CONNER, SENIOR D.J.:

 Plaintiff has moved for summary judgment on its claim that defendant owes $ 1,000,000 to plaintiff pursuant to a written agreement executed and delivered by defendant guaranteeing the payment of bills and charges owed by an affiliate of defendant for transportation services provided by plaintiff. This court has jurisdiction pursuant to 28 U.S.C. ยง 1332(a)(1). For the reasons stated below, plaintiff's motion is granted.

 Background

 The following facts are undisputed by the parties. Primary Industries executed and delivered to Conrail a guarantee agreement, dated March 16, 1978, which secured the payment of bills and charges for transportation and related services that Conrail rendered to Primary Coal up to an amount of $ 1,000,000. The guarantee, issued and signed by Murray Relis, a director and officer of Primary Industries from 1975 to 1992, reads as follows:

 
This is a continuing guaranty, covering all bills and charges for transportation and related services furnished to or for the said Primary Coal, Inc. at any time after the date hereof until revocation of this guaranty. This guaranty may be revoked by giving notice of revocation to you when notice of revocation shall be effective upon receipt but shall not affect or impair the liability of the undersigned with respect to any indebtedness within the scope of this guaranty for services furnished prior to the effective date of revocation, whether demand for payment is made hereunder before or after the effective date of revocation.
 
Notice of acceptance of this guaranty is hereby expressly waived by the undersigned.
 
PRIMARY INDUSTRIES CORPORATION
 
/s/ Murray Relis
 
Authorized Signature

 During the final six months of 1991, Primary Coal failed to pay the sum of $ 5,136,082 in transportation charges due and owing to Conrail for the transportation of coal. In a letter dated January 6, 1992, James D. Morrison, Assistant Treasurer for Conrail, notified Primary Industries in writing of the fact that Primary Coal owed Conrail $ 5,136,082 for transportation services, *fn1" and demanded payment of $ 1,000,000 pursuant to the guarantee:

 
Marc L. Ginzberg
 
President
 
Primary Industries ...

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