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Fulgini Orilio & F.LLI S.p.A v. Lettieri

June 26, 2007

FULGINI ORILIO & F.LLI S.P.A, PLAINTIFF,
v.
FRANK C. LETTIERI AND KINENOD REALTY CORP., DEFENDANTS.



The opinion of the court was delivered by: Gold, S., United States Magistrate Judge

MEMORANDUM AND ORDER

In this action, plaintiff seeks to recover money allegedly owed pursuant to guarantees executed by defendants. Because material issues of fact exist regarding whether there are any monies owed that are covered by the guarantees, plaintiff's motion for summary judgment is denied.

BACKGROUND

The facts giving rise to this litigation are largely undisputed. Plaintiff, Fulgini Orilio & F.LLI S.p.A ("Fulgini"), manufactures furniture in Italy. Camel USA, Inc. ("Camel") and Cellini Furniture Crafters, Inc. ("Cellini") (collectively, the "Distributors") at one time imported and sold furniture in the United States. On December 1, 1998, Fulgini accepted a promissory note from Camel in the amount of $855,992 in full satisfaction of all money owed to Fulgini by the Distributors. On April 1, 1999, Fulgini entered into a Distributorship Agreement with the Distributors to sell plaintiff's furniture in the U.S. At that time, the defendants, Frank Lettieri, then Cellini's chairman, and Kinenod Realty Corp., an entity associated with Lettieri, entered into guarantees ensuring the Distributors' full performance on the promissory note and Distributorship Agreement. See Decl. of John P. Gleason, Exs. A and B, Docket Entry 21.

Plaintiff Fulgini alleges that the Distributors, and thereby defendants pursuant to the guarantees, owe €155,584.68, or about $185,407.48. Defendants assert that Camel and Cellini paid the entire balance they owed to Fulgini. The defendants further contend that any outstanding balance due to plaintiff is owed by Mobili 2000 Furniture, Inc. ("Mobili 2000"), a separate entity formed by Camel's principal after the guarantees were executed, and that Mobili 2000's debts are not secured by defendants' guarantees.

DISCUSSION

Summary judgment is appropriate where "there is no genuine issue as to any material fact." FED. R. CIV. P. 56(c). An issue of fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986). A factual dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.; see also Citizens Bank of Clearwater v. Hunt,927 F.2d 707, 710 (2d Cir. 1991). In reaching a summary judgment determination, the court must resolve ambiguities and draw reasonable inferences in favor of the nonmoving party. Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162,167 (2d Cir. 1991).

The moving party bears the initial burden of establishing that there are no genuine issues of material fact and the non-moving party may defeat summary judgment by producing specific facts showing that there is a genuine issue for trial. Anderson, 477 U.S. at 256, 106 S.Ct. at 2514; Samuels v. Mockry, 77 F.3d 34, 36 (2d Cir. 1996). Conclusory allegations, however, are insufficient and "[t]here must be more than a 'scintilla of evidence'" to defeat a motion for summary judgment. Delaware & Hudson Railway Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252, 106 S.Ct. at 2512).*fn1

"Where . . . a creditor seeks summary judgment upon a written guaranty, the creditor need prove no more than an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guarantee." Kensington House Co. v. Oram, 293 A.D.2d 304, 305, 739 N.Y.S.2d 572 (1st Dep't 2002). Plaintiff here has established the first element -- absolute guarantees executed by defendants -- but not the underlying debt of Camel or Cellini.

As noted above, plaintiff has submitted the guarantees executed by defendants Lettieri and Kinenod Realty. Both guarantees appear to have been executed on April 1, 1999. Each provides a guarantee of the performance of Camel U.S.A., Inc., and Cellini Furniture Crafters, Inc., both New York corporations. The guarantees make no reference to the performance of the principals of Camel or Cellini, of corporations related to or succeeding Camel or Cellini, or of any other entity or individual.

The burden of proving that the Distributors owe an outstanding debt rests, of course, with plaintiff. Plaintiff did submit a Rule 56.1 statement asserting that Camel and Cellini failed to pay €155,584.68 they owe to Fulgini. Pl.'s Rule 56.1 Statement, ¶¶ 11-12. Contrary to the requirement of Local Civil Rule 56.1(d), however, plaintiff's statement does not include a "citation to evidence which would be admissible" at trial to support its assertion.

In their opposition papers, defendants challenge plaintiff's assertion that the Distributors owe any money to Fulgini. Defendants have submitted affidavits of defendant Frank Lettieri, former chairman of Cellini, and Cheryl Benedict, Camel's founder. Both allege that defendants paid their debts to Fulgini in full before this action was brought. Lettieri Aff. ¶¶ 11-12; Benedict Aff. ¶¶ 11-12.

Plaintiff correctly points out in reply that it is unclear whether the Lettieri and Benedict affidavits were submitted on information and belief acquired from others or whether they were "made on personal knowledge" and set forth facts "as would be admissible in evidence" as Federal Rule of Civil Procedure 56 requires. As noted above, however, it is plaintiff that bears the burden of establishing the existence of an outstanding debt. Plaintiff has not submitted evidence of Camel or Cellini's indebtedness, such as an affidavit of an accountant, principal or employee familiar with the amounts owed and payments made by Cellini and Camel. Rather, the only evidence submitted by plaintiff to establish the debt it claims is owed are its own documents headed "Account Statement" for Cellini Furniture Crafters, Inc., Camel USA and an entity referred to as "Mobili 2000 Camel USA." Reply Decl. Ex. A, Docket Entry 27, and Letter dated Apr. 20, 2007, Ex. B, Docket Entry 32.

Plaintiff seems to argue that the debts attributed to "Mobili 2000 Camel USA" are debts of Camel and therefore covered by the defendants' guarantees. Defendants, however, have raised a material question of fact in response to this assertion. In her affidavit, Cheryl Benedict states that Camel and Mobili 2000 Furniture, Inc., are separate corporations, and that Camel ceased doing business in January of 2002. Yet many of the outstanding amounts listed in plaintiff's statement of account as due for "Mobili 2000 Camel USA" were incurred from 2002 to 2005, after Camel, according to Benedict, was no longer operating. See Docket Entry 32-3 at pp. 13-18. Moreover, Benedict is the founder of both Camel and Mobili 2000. See Benedict Aff. ΒΆΒΆ 7, 13. Thus, whether or not Benedict has personal knowledge ...


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