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FORD MOTOR CREDIT CO. v. MILLER

January 20, 1998

FORD MOTOR CREDIT COMPANY, Plaintiff, against DONALD MILLER, WENDELL MILLER, AND MADELEINE MILLER, Defendants.


The opinion of the court was delivered by: MCAVOY

 McAVOY, Chief District Judge:

 Plaintiff Ford Motor Credit Company ("Ford Credit") instituted this diversity action against certain officers, employees and stockholders of Miller Lincoln Mercury, Inc. (the "Dealer"). In brief, Ford Credit seeks to recover upon an unlimited guarantee executed by defendants. Ford Credit also seeks attorneys' fees and costs. Now before the Court is Ford Credit's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.

 Defendants, in turn, assert that they have no liability for the Dealer's default. Specifically, defendants contend the Guarantee Agreement is unenforceable, relying on the doctrines of (1) unconscionability and (2) equitable estoppel. Defendants further contend that, in any event, summary judgment cannot be granted on the issue of damages because there exist substantial questions of fact relating to the proper damage amount.

 For the reasons set forth below, Ford Credit's motion for summary judgment is granted.

 I. BACKGROUND

 On June 24, 1982, the defendants *fn1" executed and delivered to Ford Credit a "Continuing Guarantee" (the "Guarantee"). Pursuant to the Guarantee, each of the defendants jointly and severally agreed to assume any present and future obligations of the Dealer in the event of the Dealer's default. *fn2" The Guarantee further provided that it would remain in effect until Ford Credit received written termination of the guarantee by registered mail.

 Thereafter, the Dealer became obligated to Ford Credit pursuant to various wholesale plans and other credit facilities. On February 2, 1993, the Dealer defaulted on its obligations to Ford Credit. *fn3"

 On February 10, 1993, the defendants wrote a letter to Ford Credit, authorizing Ford Credit to take possession of certain items of collateral pursuant to various security agreements. The letter also acknowledged that defendants were guarantors on the indebtedness of the Dealer and that nothing therein modified or discharged their obligations pursuant to the Guarantee.

 As a defense to the enforcement of the Guarantee, defendants contend that on July 3, 1990, a Ford Credit employee, Margaret Spadara, advised Donald Miller that no personal guaranties existed. Defendants also contend that they never received copies of the Guarantee and that Ford Credit never mentioned the Guarantee until 1993.

 II. DISCUSSION

 A. Standard For Summary Judgment

 The standard for summary judgment is well-settled. A party seeking summary judgment must demonstrate that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party bears the initial burden of "informing the . . . court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (quoting Fed. R. Civ. P. 56(c)). The initial burden is to demonstrate "that there is an absence of evidence to support the nonmoving party's case." Id. at 325.

 The nonmoving party may defeat the summary judgment motion by producing sufficient evidence to establish a genuine issue of material fact for trial. See id. at 322. The test for existence of a genuine dispute is whether a reasonable juror could find for the nonmoving party; that is, whether the nonmovant's case, if proved at trial, would be sufficient to survive a motion for judgment as a matter of law. ...


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