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Wesco Distribution, Inc. v. Anshelewitz

July 15, 2008


The opinion of the court was delivered by: P. Kevin Castel, District Judge


In this diversity action, plaintiff Wesco Distribution, Inc. ("Wesco") has moved for summary judgment pursuant to Rule 56, Fed. R. Civ. P., against defendant Alvin Anshelewitz. By virtue of a personal guaranty purportedly executed by Anshelewitz, Wesco seeks to collect the principal amount of $150,498.40, plus service charges, allegedly owed to it by defendant Al's Best Electric Co., Inc. ("Al's Best"). Anshelewitz has cross-moved in limine, pursuant to Rule 103, Fed. R. Evid., for a ruling excluding the purported personal guaranty. For the reasons outlined below, the Wesco motion for summary judgment is granted and the Anshelewitz in limine motion is denied.

I. Background

For the purposes of plaintiff's summary judgment motion, I have accepted as true defendant's version of the facts and such other facts offered by plaintiff that are not disputed by defendant. All reasonable inferences have been drawn in defendant's favor.

Al's Best is an electrical contractor which has been in business for more than 25 years. (Anshelewitz Aff't at 2.) Alvin Anshelewitz is the president and sole shareholder of Al's Best; his sons, Chad and Stephen Anshelewitz, were at all relevant times vice presidents of Al's Best.*fn1 (Cope Aff't, Exh. A.) Al's Best filed for bankruptcy protection under Chapter 11 in June 2007. (Anshelewitz Aff't at 2; Cope Reply Aff't, Exh. P.)

In or around November 2005, Al's Best requested that Wesco supply it with electrical materials for its various construction projects. (Cope Aff't ¶ 8.) Specifically, an employee of Al's Best, known only as, Ralph, came to Wesco's Fort Lauderdale, Florida office and inquired about what it would take to open a credit account for Al's Best. (Cope Reply Aff't ¶ 21.) Wesco supplied Ralph with a two-page document titled "Application For Business Credit." (Id.) The first page of the document contained spaces for basic information regarding the company seeking credit as well as a "Personal Guaranty" paragraph. (Cope Aff't, Exh. A.) The first page of the document also contained two separate signature lines, one calling for the signature of the applicant seeking credit and one for the person personally guaranteeing the amount of indebtedness to Wesco by the applicant. (Id.) Page two of the document contained the terms of the credit application (also referred to therein as the "credit agreement") and provided a space for the date and the applicant's initials at the tope of the page. (Id.)

A copy of the first page of the document was delivered to Wesco's Fort Lauderdale office by the same Al's Best employee who had made the initial request for a credit account. (Cope Aff't ¶ 12; Cope Reply Aff't ¶ 21.) The single page had two sections to it: a personal guaranty and a credit application. (Cope Aff't, Exh. A.) Below the text of the terms of the personal guaranty portion of the document appeared the printed name "Al Anshelewitz," with a signature appearing directly below his printed name. (Id.) The signature was dated November 17, 2005. (Id.) Below the guaranty portion and signature was a credit application signed by Chad Anshelewitz, "a duly authorized representative of applicant" and dated November 17, 2005. (Cope Aff't ¶ 11, Exh. A; Anshelewitz Dep. at 73-77.)

After receiving only the first page of the two-page document, Wesco advised Al's Best that no action could be taken on the proposed credit account until page two of the document was initialed and delivered to Wesco. (Cope Aff't ¶ 12; Cope Reply Aff't ¶ 21.) Page two of the document was delivered the next day, initialed at the top of the page in ink. (Id.) Al's Best never submitted and Wesco never received a version of page one of the credit agreement signed in ink. (Id.; Cope Reply Aff't ¶ 22.)

The completed credit application and personal guaranty submitted by Wesco in support of summary judgment lists "Al's Best Electric" as the "Applicant," "Al Anshelewitz" as "President" of Al's Best and Chad and Stephen Anshelewitz as "V.P.[s]." Wesco asserts it required Al's Best's president, Alvin Anshelewitz, to personally guaranty the debts incurred by Al's Best by signing beneath the personal guaranty paragraph. (Cope Aff't ¶¶ 9-10.) It was not uncommon for Wesco to require new customers to have their principals sign the personal guaranty section of the credit application. (Cope Aff't ¶ 10.)

The authenticity of the credit application, signed on behalf of Al's Best by Chad Anshelewitz is not disputed. Nor is it disputed that Al's Best did, in fact, begin purchasing electrical materials from Wesco on credit subsequent to the delivery of the executed, two-page document to Wesco. Defendant Anshelewitz contends that there is a material issue of fact as to whether he signed the guaranty.

The "Personal Guaranty" states, in part, as follows: In consideration of credit being extended by Wesco to Applicant, I/We hereby personally guarantee to Wesco payment of any obligation of Applicant, and I/We hereby agree to be bound to pay Wesco on demand any sum that may become due to Wesco from Applicant. It is understood and agreed that this guaranty shall be a primary, absolute and contuing and irrevocable guaranty and indemnity for such indebtedness and will not be subject to any counterclaims, set-offs, other deductions or defenses. I/We hereby waive notice of default, non-payment, non-performance . . . . This Guaranty will not be released, discharged, terminated, modified, affected or impaired by any occurrences or circumstances whatsoever, including without limitation, any insolvency, bankruptcy, reorganization or other similar proceeding affecting Applicant or its assets. . . . (Id.)

From February 2006 through July 2006, Al's Best ordered, usually by telephone, electrical materials from Wesco which were delivered to various construction sites from Wesco's Florida location and from two of Wesco's New York locations. (Cope Aff't ¶¶ 21, 29; Mayer Aff't ¶¶ 4, 12; Anshelewitz Aff't at 2.) Al's Best did not create and transmit written purchase orders. (Anshelewitz Aff't at 2.)

After receiving an order from Al's Best, Wesco would deliver the electrical supplies to the applicable construction site and a representative from Al's Best would sign for and accept the deliveries. (Id.) Wesco sent invoices to Al's Best for the sales and delivery of the electrical materials and issued Al's Best monthly account statements reflecting the amount owed by Al's Best to Wesco. (Cope Aff't ¶¶ 23-24; Mayer Aff't ¶¶ 6-7.) If material was rejected or otherwise returned, Wesco's policy was to either not send an invoice to the customer or apply a credit the customer's account.

(Cope Reply Aff't ¶ 12 n.3.) Wesco did, on one occasion, issue a credit to Al's Best's account in the amount of $23,223.01 when it accepted a return of materials it recovered after being notified by the general contractor at a construction site that Al's Best had abandoned a trailer full of materials. (Cope Reply Aff't ¶ 12 n.3, Exh. L.) In total, the amount Wesco invoiced Al's Best for which it has not received payment is $150,498.40. (Cope Aff't ¶¶ 26,35; Mayer Aff't ¶¶ 9, 17, 19.)

Prior to the institution of this litigation, Al's Best did not object to or question any of the invoices or statements of account it received from Wesco. (Cope Aff't ¶¶ 25, 27, 33; Cope Reply Aff't ¶¶ 18-19; Mayer Aff't ¶¶ 8, 10, 13; Mayer Reply Aff't ¶¶ 4-10.)

Wesco filed this action on November 22, 2006 (Doc. # 1) and its amended complaint, the operative pleading, was filed on January 26, 2007. (Doc. # 6.) The amended complaint asserts, inter alia, claims for the principal amount allegedly owed by Al's Best plus interest, service charges, attorney's fees and collection expenses. (Cope Aff't ¶ 36.) It seeks payment from both Al's Best as the primary debtor and from Alvin Anshelewitz as guarantor. Because Al's Best is in bankruptcy, Wesco seeks summary judgment only with respect to its claims against defendant Anshelewitz for the principal amount allegedly owed by Al's Best plus service charges.*fn2 The claimed service charges are based on a provision in the signed credit application which states that payment by Al's Best to Wesco was to be "net 30 days, and that past due balances are subject to service charge at the rate of 1 and 1/2% per month . . . ." (Cope Aff't, Exh. A.)

In or about the time when the personal guaranty was allegedly executed, defendant Anshelewitz was suffering from a serious illness which required him to cease working for Al's Best "on a regular basis" and, to relinquish control of the company to his two sons, Chad and Stephen. (Anshelewitz Dep. at 14-15; Anshelewitz Aff't at 2.) Because Anshelewitz "almost never went into the company's office" during that period, he questions whether he could have executed a personal guaranty. He further argues that because the guaranty relied upon by the plaintiff is a photocopy, it is an indication that it is not authentic. He has no recollection of signing the personal guaranty, yet he does not contend the signature on photocopy of the personal guaranty is a forgery. Nor does he contend that the signature on the guaranty is not his; rather he maintains he cannot be certain that the signature is his despite his concession that it indeed resembles his signature. (Anshelewitz Dep. at 82, 87-89.) On the basis of Wesco's failure to produce an ink-signed original, Anshelewitz seeks to have this Court deny summary judgment to plaintiff and exclude the personal guaranty from evidence.

Apart from the validity of the guaranty, Anshelewitz argues that his son, Stephen, was personally involved with the projects for which Al's Best purchased electrical materials from Wesco and, upon his post-litigation review of the invoices, statements of account and proofs of deliveries, he has determined that the amount Wesco claims it is owed by Al's Best is inflated. Two reasons are given in support of that assertion. First, Stephen Anshelewitz states in an affidavit submitted in opposition to summary judgment that the invoices reflect materials that were either delivered unacceptably late or not at all. (Anshelewitz Aff't at 3.) Second, he states that some of the proofs of delivery contain no signatures indicating acceptance of the materials by Al's Best, while others contain signatures which he does not recognize as those of Al's Best employees authorized to accept deliveries on behalf of the company. (Id.) He opines in his affidavit that "the only conclusion to be drawn is that Al's Best never received the merchandise reflected theron, and the invoices, therefore are suspect." (Id.) In total, Steven Anshelewitz asserts that $136,983.85 of the $150,498.40 for which invoices were sent by Wesco is not properly payable by Al's Best because of the alleged deficient deliveries. Defendant Anshelewitz contends that this asserted set-off presents a material issue of fact on the amount of damages, precluding summary judgment. Wesco asserts that the absence of an objection or dispute of the amount of the invoices at the time they were rendered precludes a challenge at this juncture.

II. Discussion

a. Forum Selection Clause

The personal guaranty and credit application at issue contain both a choice of law clause and a mandatory forum selection clause. Specifically, paragraph 9 on page two of the credit application and guaranty states that the "Agreement" shall be construed under Pennsylvania law and that the "sole and proper venue" for all disputes is either "the state [or] ...

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