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Financial Federal Credit, Inc. v. Crane Consultants, LLC

United States District Court, W.D. New York

May 12, 2014

FINANCIAL FEDERAL CREDIT, INC., Plaintiff,
v.
CRANE CONSULTANTS, LLC, RAMAR CRANE SERVICES, LLC, RAMAR STEEL SALES, INC., RAMAR STEEL ERECTORS, INC., Defendants

For Financial Federal Credit Inc., Plaintiff: Jonathan D. Deily, LEAD ATTORNEY, Deily & Glastetter, LLP, Albany, NY; Stacey M. Metro, LEAD ATTORNEY, Deily, Mooney & Glastetter, LLP, Albany, NY.

For Ramar Crane Services, LLC, Ramar Steel Sales, Inc., Defendants, Cross Claimant: Kevin S. Cooman, Peter J. Gregory, LEAD ATTORNEYS, McConville Considine Cooman & Morin, PC, Rochester, NY.

For Ramar Steel Erectors, Inc., Defendant, Cross Claimant: Peter J. Gregory, LEAD ATTORNEY, Kevin S. Cooman, McConville Considine Cooman & Morin, PC, Rochester, NY.

OPINION

Page 265

DECISION AND ORDER

DAVID G. LARIMER, United States District Judge.

This action involves a series of transactions involving the sale of two construction cranes, and the financing of those sales. Plaintiff Financial Federal Credit Inc. (" FFC" ) has sued Crane Consultants, LLC

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(" CraneCon" ), and Ramar Crane Services, LLC, Ramar Steel Services, Inc., and Ramar Steel Erectors, Inc. (collectively " Ramar" ).[1] Ramar has filed a cross claim against CraneCon.

FFC has moved for " partial" summary judgment granting it declaratory relief on its claims against Ramar. (Dkt. #95.) FFC has also moved for a default judgment against CraneCon. (Dkt. #96.)

Ramar has moved for summary judgment dismissing plaintiff's claims relating to the two cranes at issue (Dkt. #97, #101). FFC has also moved to strike the second of Ramar's motions as untimely. (Dkt. #106).

BACKGROUND

The facts leading up to this litigation involve a complex series of transactions, although most of them have been stipulated to by FFC and Ramar. See Stipulation of Material Undisputed Facts (" SOF" ), Dkt. #95-6. Plaintiff FFC is a financial services company that specializes in construction equipment financing. CraneCon is a Maryland company, which at all relevant times was engaged in the business of buying and selling cranes. Ramar consists of three related construction companies based in Rochester, New York.

On several occasions between 2005 and 2010, FFC provided financing to CraneCon for the acquisition of equipment. The parties agree that in consideration for that financing, CraneCon granted FFC a " blanket" security interest in virtually all of its present and future assets. See SOF ¶ ¶ 11, 12; Plaintiff's Ex. 5 (Dkt. #95-9). In 2005, FFC filed a financing statement in Maryland, perfecting its interest. See Dkt. #95-9 at 29.

In January 2010, FFC extended credit to CraneCon to enable it to purchase a certain crane (" the Liebherr crane" ), in the amount of $660,750. CraneCon and FFC agreed that FFC would have a security interest and lien on the Liebherr Crane. FFC filed financing statements in Maryland dated January 19 and February 2, 2010, identifying the Liebherr crane as collateral. See SOF ¶ ¶ 19, 20.

CraneCon reached an agreement to buy the crane from another company, Crane & Rigging, in February 2010. CraneCon paid Crane & Rigging a $20,000 deposit on or about February 3, 2010, and eventually paid the balance of the amount due under the contract.

As this transaction was occurring, however, CraneCon also was negotiating with Ramar for the sale of the Liebherr crane from CraneCon to Ramar. In March 2010, Ramar and CraneCon entered into an agreement for Ramar's purchase of the Liebherr crane. The terms of the agreement were set forth in a purchase order (Dkt. #95-7 at 42). The purchase price was set at $775,000, with payment in full due prior to delivery.

The purchase order contained some additional terms, however, which are at the heart of the dispute in this case. First, the purchase order provided (in what is sometimes referred to as the " buy-back" provision) that Ramar, at its option, and upon notice given by April 1, 2011, could return the Liebherr crane to CraneCon for $715,000, if certain conditions were met. Those conditions generally related to whether, and as of what date, " the traded in Tadano crane remain[ed] in [CraneCon]'s inventory ... ." Dkt. #95-7 at 42. The Tadano crane was a crane that was owned by Ramar, which had purchased the Tadano crane in 2004.

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The purchase order for the Liebherr crane further stated that: (1) the price of the Tadano crane was $450,000; (2) CraneCon would give Ramar a 45-day promissory note in that amount, secured by the note and the Tadano crane; and (3) the note would be interest-free until May 15, 2010, and bear eight percent interest thereafter. Id. On the face of it, then, the purchase order called for Ramar to buy the Liebherr crane from CraneCon for $775,000, which was payable in full prior to delivery, and for CraneCon to buy the Tadano crane from Ramar for $450,000, secured by a promissory note and the Tadano crane itself.

Although the purchase order used the term " traded in" with respect to the Tadano crane, the parties did not in fact carry out a simultaneous swap of the two cranes. In late March 2010, Ramar sent CraneCon the entire purchase price of the Liebherr crane and some associated equipment (which brought the total price up to $796,000). CraneCon then delivered the Liebherr crane to Ramar.

CraneCon also gave Ramar the $450,000 promissory note called for in the purchase order for the Tadano crane, but it never paid off that note. Ramar made no demands for payment of the note, and never delivered the Tadano crane to CraneCon. From the record, it appears that the Tadano crane remains in Ramar's possession to this day. In August 2010, Ramar also filed a UCC-1 financing statement with respect to the Tadano crane. See Dkt. #95-9 at 26-30.

To complicate matters further, both CraneCon and Ramar obtained financing with respect to these transactions. Ramar financed its purchase of the Liebherr crane in part with a $350,000 loan from M& T Bank (" M& T" ), which is not a party to this action. See Aff. of Anthony Randall (Dkt. #7) ¶ ¶ 35-37. Ramar has done business with M& T for some years, and in 2006, Ramar renewed a prior agreement with M& T granting M& T a blanket security interest in Ramar's assets. See id. ¶ 9. Ramar owned the Tadano crane at the time it renewed that security agreement.

In addition, on June 29, 2010, CraneCon entered into a loan agreement with FFC, in the principal amount of $400,750. This was apparently intended to provide CraneCon with the funds necessary to purchase the Tadano crane pursuant to the purchase order agreement between CraneCon and Ramar. FFC subsequently filed a financing statement with the State of Maryland identifying the Tadano crane as collateral. SOF at 14.

CraneCon defaulted on its loan from FFC, however. That default consisted of outright nonpayments of amounts due, as well as " bounced" checks. SOF ¶ ¶ 101-104. FFC subsequently accelerated the balance of its loans to CraneCon.

FFC then filed this action, seeking judgment against CraneCon and Ramar, both for money damages, and for replevin with respect to both the Liebherr and Tadano cranes, based on FFC's security interest in CraneCon's assets.

In the amended complaint (Dkt. #51), FFC asserts thirteen claims: (1) replevin, seeking to obtain possession of its claimed collateral (principally the Liebherr and Tadano cranes); (2) breach of contract, against CraneCon, in the amount of roughly $1,678,000; (3) a claim under Maryland law for damages in the amount of $283,501.04, based on CraneCon's issuance of a bad check to FFC in that amount; (4) unjust enrichment, based on Ramar's retention and use of both the Liebherr and Tadano cranes; (5) conversion and " wrongful detention," based on the argument that Ramar has converted FFC's

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collateral to its own use; (6) negligent misrepresentation (this claim is asserted against CraneCon only); (7) fraud, alleging that both CraneCon and Ramar made false material representations to FFC; (8) intentional interference with contract, alleging that Ramar interfered with the agreements between FFC and CraneCon; (9) constructive trust, asserting that the collateral should be held in trust for FFC; (10) fraudulent conveyance, alleging that any transfer of the claimed collateral was fraudulent and invalid; (11) conspiracy, based on the allegation that CraneCon and Ramar have conspired together to commit the wrongful acts alleged in the other counts; (12) a claim for declaratory relief, to the effect that FFC's security interest in the two cranes at issue is superior to that of the defendants; and (13) a claim for attorney's fees, costs and expenses.

FFC now seeks " partial" summary judgment granting it certain declaratory relief. (Dkt. #95.) The gist of the relief sought is a declaration that FFC's security interest in both cranes is superior to Ramar's. FFC also has moved for a default judgment against CraneCon, based on CraneCon's failure to retain counsel and to respond to FFC's discovery requests. (Dkt. #96.)

Ramar has cross-moved for summary judgment dismissing all of FFC's claims. Ramar has moved separately as to the Tadano and Liebherr cranes (Dkt. #97, #101), but combined, these two motions effectively seek dismissal of all of FFC's claims against Ramar.

FFC has also moved to strike Ramar's cross-motion regarding the Liebherr crane. (Dkt. #106.) FFC contends that Ramar's motion is untimely, because it was filed after the Court's deadline for dispositive motions. See Dkt. #94. Ramar contends that the motion was necessitated by FFC's own motion for summary judgment as to the Liebherr crane, which was filed on the last day for dispositive motions.

DISCUSSION

I. Plaintiff's Motion for Default Judgment against Crane ...


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