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Quantum Corporate Funding, Ltd. v. Westwood Design/Build Inc.

September 16, 2008

QUANTUM CORPORATE FUNDING, LTD., PLAINTIFF,
v.
WESTWOOD DESIGN/BUILD INCORPORATED, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Lewis A. Kaplan, District Judge

MEMORANDUM OPINION

On July 30, 2008, this Court granted plaintiff's unopposed motion for summary judgment against defendant Penn Lyon Homes Corporation ("PLH"). Judgment was entered the following day in the amount of $112,168.28 plus interest. PLH now moves to vacate the judgment and for an extension of time within which to respond to the motion for summary judgment or for reconsideration on the grounds that (a) its default on the motion was excusable, and (2) plaintiff in any event did not make out a prima facie case for summary judgment even in the absence of responsive papers.

Facts

The pertinent facts here concern both the merits and the events leading to PLH's failure to file papers in opposition to plaintiff's motion.

The Merits

While there doubtless are factual issues as between and among various of the parties, the facts that are material to the present motion are undisputed.

Plaintiff Quantum Corporate Funding, Ltd. ("Quantum") is in the business of accounts receivable factoring and is one of the largest purchasers of contractor receivables in the United States.*fn1

In or about January 2007, Mr. and Mrs. Eustace Pollydore, as owners, entered into contracts with defendants Westwood Design/Build Incorporated ("Westwood"), as contractor, and National City Mortgage, Inc. ("National"), as construction lender, for the purchase and erection of a new modular home in Lanham, Maryland.*fn2 Later in the year, Westwood's principal, one Warfield, approached Quantum for the purpose of attempting to raise cash by selling to it an account receivable -- a purported Westwood invoice to National for a construction draw in the amount of $347,000 said to have been payable upon the delivery of the modular home to the Pollydore site (the "Westwood Invoice").*fn3 Quantum contacted National, an employee of which confirmed that the invoice was correct and executed what Quantum describes as an estoppel certificate in alleged reliance upon which Quantum agreed to take an assignment of the invoice in exchange for $242,900.*fn4 In accordance with instructions from Westwood, Quantum wired $130,731.72 to Westwood and $112,168.28 to PLH, which was said to be the balance due from Westwood to PLH in respect of the Pollydore residence.*fn5

In due course, Quantum sought confirmation from National that the $347,000 payment would be made to it rather than Westwood and to advise Westwood to remit to Quantum any payment it might receive from National.*fn6 It proved unable, however, to contact Westwood. Further investigation revealed that no work had been done on the Pollydore residence, that PLH never had heard of the Pollydores, and that the $112,168.28 PLH Invoice was fraudulent.*fn7 PLH, however, nevertheless refused to return the $112,168.28 to Quantum.*fn8 Its cross-claim against Westwood contends -- though it has provided no evidence of this fact -- that the money was applied to a debt owed to PLH by Westwood with respect to another transaction altogether.*fn9

Prior Proceedings

Quantum brought this action against Westwood, Warfield, National and PLH. Insofar as it proceeded against PLH, it sought recovery of the $112,168.28 on theories of unjust enrichment and conversion.

On July 8, 2008, Quantum moved for summary judgment against PLH. Giving effect to Fed. R. Civ. P. 6(d), answering papers were due on July 25, but none were filed. On July 30, 2008, the Court granted Quantum's motion. Judgment was entered accordingly.

PLH now claims, inter alia, that its failure to respond to the motion was a product of excusable neglect, that it has a meritorious defense and that the judgment should be vacated. It focuses in particular on the contention that it diligently sought an adjournment of the summary judgment motion and ultimately obtained plaintiff's agreement to ...


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