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CAVENDISH TRADERS, LTD. v. NICE SKATE SHOES

October 23, 2000

CAVENDISH TRADERS, LTD., PLAINTIFF,
V.
NICE SKATE SHOES, LTD., LAWRENCE ARIN, JOHN CONNOR, VINCENT RAFFA AND WALTER TELFORD, DEFENDANTS.



The opinion of the court was delivered by: Robert L. Carter, United States District Judge:

  OPINION

Plaintiff Cavendish Traders, Ltd., ("CTL") brings this diversity action to enforce promissory notes, allegedly executed by the defendant corporation, Nice Skate Shoes, Ltd. ("Nice Skate"), and guaranties of payment allegedly executed by officers of Nice Skate. Plaintiff has moved for summary judgement pursuant to Rule 56, F.R. Civ. P. Defendant Walter Telford, one of the officers of Nice Skate, has cross-moved for summary judgement. The remaining defendants have not opposed the motion.

BACKGROUND

Plaintiff CTL is a corporation formed under the laws of Great Britain, whose principal place of business is in London, England. (Cplt. ¶ 1.) Its business includes the financing of international sales transactions. (Cusac Aff. ¶ 4.) Defendant Nice Skate Shoe, Ltd. ("Nice Skate") is a New York corporation whose principal place of business is in Valley Cottage, N.Y. (Cplt. ¶ 2.) Its business includes the designing, manufacturing and selling of skate board shoes. (Cusac Aff. ¶ 5.) Defendants Lawrence Arin ("Arin"), a resident of Mahwah, N.J., John Conner ("Conner"), a resident of Closter, N.J., Vincent Raffa ("Raffa"), a resident of Northvale, N.J., and Walter Telford ("Telford"), a resident of New York, N.Y., ("defendant guarantors"), were officers, directors, employees and shareholders of Nice Skate. (Cplt. ¶ 3-6; Cusac Aff. ¶ 6.) Trade Solutions, Incorporated ("TSI") is a Nevada corporation, presently inactive, whose business involved consulting and export and import finance activities. (Cusac Dep. pp. 7-9.)

In 1997, the parties to this action entered into three transactions whereby TSI arranged for the plaintiff to finance Nice Skate's purchase of shoes from Korea for import into the United States for resale. (Cusac Aff. ¶ 7.) The structure of these transactions was largely similar. On June 23, 1997, July 10, 1997 and July 12, 1997, TSI and Nice Skate entered into trade finance agreements pursuant to which CTL agreed to finance the purchase of shoes by Nice Skate. (Cplt. ¶¶ 9, 22, 34.) As obligated by the agreements, Nice Skate executed a series of promissory notes to the order of TSI, each of which was accompanied by a written guaranty of payment signed by various officers of Nice Skate. (Cplt. ¶¶ 10, 16, 23, 28, 35, 40.) The June 23, 1997 agreement was guaranteed by defendants Ann, Connor, Raffa, and Telford. (Cplt. ¶ 16.) The July 10, 1997 agreement was guaranteed by Ann, Connor, Raffa, and allegedly Telford. (Cplt. ¶¶ 28.) The July 12, 1997 agreement was guaranteed by defendants Ann and Raffa. (Cusac Aff. ¶ 25.) All three guaranties were made out to both CTL and TSI. (Pl. Exs. C, F, I.)*fn1

Nice Skate made several payments in 1997 on the promissory notes pursuant to the June 23, 1997 agreement ("June 23, 1997 notes") but allegedly failed to repay the full amount. (Cplt. ¶¶ 12-13.) Nice Skate allegedly made no payments on the promissory notes made pursuant to the July 10, 1997 and the July 12, 1997 agreements ("July 10, 1997 notes" and "July 12, 1997 notes," respectively). (Cplt. ¶¶ 25, 37.) On November 17, 1998, TSI made a written assignment of the promissory notes and guaranties to CTL. (Def. Ex. 4)*fn2 CTL applied Nice Skate's security deposit of $65,182.44 against the principal of the July 12, 1997 notes. (Cusac Aff. ¶ 26.) CTL then filed a complaint in this court pursuant to 28 U.S.C. § 1332 on December 4, 1998, and moved for summary judgement on May 19, 2000. Plaintiff alleges that a balance of $109,359.47 remains due on the June 23, 1997 notes, a balance of $94,753.41 remains due on the July 10, 1997 notes, and a balance of $4,741.16*fn3 remains due on the July 12, 1997 notes. (Cusac Aff. ¶¶ 13, 20, 24, 26.) Plaintiff seeks monetary damages against the defendants, jointly and severally, in the following amounts: Nice Skate, Ann and Raffa — $208,854.04*fn4 plus contractual interest though August 31, 1999 of $49,411.74; Connor and Telford — $204,112.88*fn5 plus contractual interest of $49,000.00 through August 31, 1999. (Cusac Aff. ¶ 26.)

DISCUSSION

I.

To prevail on a motion for summary judgment under Rule 56, P.R. Civ. P., the moving party bears the initial burden to show that there are no genuine issues of material fact to be tried, and that it is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)*fn6 The burden then shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." F.R. Civ. P. 56(e). In addition, the court must independently search the record to determine if any issue of fact remains. See Lakhaney v. Anzelone, 788 F. Supp. 160, 162 (S.D.N.Y. 1992) (Carter, J.).

In the instant case, plaintiff has submitted with its complaint and notice of motion, a statement of material facts as to which it contends there are no genuine issues for trial, as required by Local Civil Rule 56.1 of the Southern District of New York ("Local Rule 56.1 statement" or "Local Rule 56.1") Defendants Nice Skate, Arin, Connor and Raffa have not responded to plaintiff's complaint or motion. Therefore, the material facts alleged in plaintiff's complaint and Local Rule 56.1 statement will be deemed admitted against these defendants. See Local Rule 56.1(c); F.R. Civ. P. 8(c).

Defendant Telford, on the other hand, has submitted an answer, a Local Rule 56.1 statement, and has cross-moved for summary judgement. When parties cross-move for summary judgment, each motion must be evaluated on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration. See Schwabenbaur v. Bd. of Educ., 667 F.2d 305, 314 (2d Cir. 1981)

II.

Both plaintiff and defendant Telford have assumed that New York law applies, but neither has explicitly addressed the choice of law issue. Since jurisdiction is based on diversity of citizenship, the court must apply conflict of law rules of the state in which it sits. See Klaxon Co. v. Stentor Elec. Mfg. Co. Inc., 313 U.S. 487, 496 (1941). Under New York conflict of law rules, "the law of the jurisdiction having the greatest interest in the litigation will be applied." Miller v. Miller, 22 N.Y.2d 12, 15-16 (1968)


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