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Bank of America, N.A. v. Airborne, Inc.

United States District Court, W.D. New York

January 24, 2017

BANK OF AMERICA, N.A., Plaintiff,
AIRBORNE, INC. and JOHN H. DOW, Defendants.

          DECISION & ORDER

          MARIAN W. PAYSON United States Magistrate Judge.

         On August 3, 2015, plaintiff Bank of America, N.A. (“BOA”) commenced this action against defendants Airborne, Inc. (“Airborne”) and John H. Dow (“Dow”), alleging that they had defaulted on several agreements with BOA. (Docket # 1). Currently before the Court is BOA's unopposed motion for summary judgment. (Docket # 31). For the following reasons, the motion is granted.


         The following facts are undisputed.[1] On May 21, 2014, Airborne entered into a Commercial Card Account Agreement with FIA Card Services, N.A. (“FIA”); BOA, as successor by merger to FIA, has been assigned all rights and obligations of FIA under the Commercial Card Account Agreement and is the current holder of the Commercial Card Account Agreement. (Docket # 31-2 at ¶¶ 1-3). Pursuant to that agreement, BOA agreed to provide Airborne with a commercial card account with a maximum credit limit of $1, 500, 000 and to deliver a monthly billing statement to Airborne, which Airborne agreed to pay in full on or before the due date. (Id. at ¶¶ 4-5). The agreement also permitted BOA to assess late fees, finance charges, and other fees in the event Airborne failed to make a timely payment. (Id. at ¶ 7). The agreement also authorized BOA to suspend or terminate the agreement in the event Airborne failed to make a payment and granted BOA a security interest and contractual right to setoff in all deposits maintained by Airborne with BOA in the event of default. (Id. at ¶¶ 8-9).

         On October 16, 2014, BOA and Airborne entered into another agreement, the LOC Loan Agreement, pursuant to which BOA agreed to extend a $1, 250, 000 line of credit to Airborne until June 30, 2015, at which time Airborne would be required to repay the principal, interest, and any charges due. (Id. at ¶ 10). The LOC Loan Agreement further provided that in the event of default, BOA was entitled to terminate the agreement, declare all sums outstanding under the agreement to become immediately due and payable, charge interest at the default rate of six percent over the existing rate of interest on the loan, and take any other actions available to BOA. (Id. at ¶¶ 11-13). The agreement further provided that Airborne's failure to make a payment or a default under any other agreement with BOA would constitute a default of the LOC Loan Agreement. (Id. at ¶ 11).

         On the same date, October 16, 2014, Airborne executed the Airborne Security Agreement, which granted BOA a first priority blanket security interest on all assets of Airborne as collateral security for prompt and complete payment and performance of all of Airborne's debts, obligations, and liabilities to BOA. (Id. at ¶¶ 14-15). That same day, as additional collateral security for the repayment of Airborne's obligations, Dow executed a Continuing and Unconditional Guaranty in favor of BOA. (Id. at ¶ 17). Pursuant to the Guaranty, Dow unconditionally guaranteed the payment to or performance of Airborne's obligations to BOA when due, including any attorneys' fees and costs incurred by BOA in connection with efforts to collect amounts owed under the various agreements. (Id.).

         Airborne defaulted under the Commercial Card Account Agreement by repeatedly failing to pay the billing statement amounts in full. (Id. at ¶ 20). This default also constituted a default under the LOC Loan Agreement. (Id. at ¶ 21). BOA notified Airborne of the defaults through notices dated April 3, 2015, and May 20, 2015. (Id. at ¶ 22). Airborne also defaulted under the LOC Loan Agreement by selling some of its assets to Merchant Cash and Capital, LLC (“Merchant”) and granting Merchant a security interest in certain of Airborne's assets. (Id. at ¶ 23).

         Based upon the defaults and the corresponding acceleration of outstanding balances, on June 4, 2015, BOA demanded the assembly and turnover of collateral by June 12, 2015. (Id. at ¶ 24). Despite the written notices and demand for payment, neither Airborne nor Dow paid the balance due or turned over the collateral. (Id. at ¶ 28).

         On August 3, 2015, Airborne filed the instant Complaint, asserting causes of action for breach of contract, foreclosure, replevin, conversion, unjust enrichment, and breach of guaranty. (Docket # 1). On April 29, 2016, BOA filed the pending motion seeking partial summary judgment as to defendants' liability on three of the causes of action.[2] Specifically, BOA seeks judgment against Airborne on the first and second causes of action for breach of contract based upon Airborne's breach of the Commercial Card Account Agreement and the LOC Loan Agreement. (Docket # 31-1 at 3). BOA also seeks summary judgment against Dow on its eighth cause of action for breach of the Guaranty Agreement. (Id.). Finally, BOA seeks an order striking defendants' demand for a jury trial on the grounds that the defendants waived their right to a jury trial. (Id. at 10).

         Despite motion scheduling orders setting deadlines for a response to the motion (Docket ## 32, 37), defendants have not opposed the motion for summary judgment. Indeed, at oral argument on December 20, 2016, counsel for defendants confirmed that defendants were not opposed to judgment being entered on the first, second, and eighth causes of action.


         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In reaching this determination, the court must assess whether there are any disputed material facts and, in so doing, must resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986); Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162, 166-67 (2d Cir. 1991). A fact is “material” only if it has some effect on the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. at 248; Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92, 97 (2d Cir. 2000). A dispute regarding a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248; see also Konikoff v. Prudential Ins. Co. of Am., 234 F.3d at 97.

         The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact, after which the non-moving party must come forward with sufficient evidence to support a jury verdict in its favor; the motion will not be defeated based upon conjecture, surmise or the existence of “metaphysical doubt” concerning the facts. Bryantv. Maffucci, 923 F.2d 979, 982 (2d Cir.) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith RadioCorp., 475 U.S. 574, 586 (1986)), cert. denied, 502 U.S. 849 (1991). The party seeking to avoid summary judgment “must do more than make broad factual allegations and invoke the appropriate statute. The [party] must also show, by affidavits or as otherwise provided in Rule 56 . . ., that ...

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