The opinion of the court was delivered by: Robert L. Carter, United States District Judge:
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.)
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)
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)
The jurisdictions with the greatest interest in the assignment,
guaranties and promissory notes are New York, New Jersey, Illinois and
England. New Jersey is the primary residence of three of the defendant
guarantors. Illinois is the place where the trade finance agreements were
executed. (See, e.g., Pl. Ex. A.) England is
the primary place of
business of the plaintiff. New York is the primary place of business of
Nice Skate and the residence of one of the defendant guarantors. In
addition, the trade finance agreements, (see, e.g., Pl. Ex. A ¶ 13),
the guaranties, (see, e.g., Pl. Ex. D ¶ 9), and the assignment,
(Def. Ex. 4), all explicitly provide for the governance of New York law.
These clauses evince the parties' intention to be subject to New York
law. Moreover, choice of law clauses in contracts and loan documents are
generally honored in New York. See Village ...