Cadle v. Hayes

• Court: Court of Appeals for the First Circuit
• Decided: June 26, 1997
• Docket: 97-1252
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT



                              _________________________


No. 97-1252


CADLE COMPANY,



                                 Plaintiff, Appellee,



                                          v.



                                 JOHN J. HAYES, III,



                                Defendant, Appellant.



                              _________________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF MASSACHUSETTS



                 [Hon. Joyce London Alexander, U.S. Magistrate Judge]
                                               _____________________



                              _________________________



                                        Before



                                Selya, Circuit Judge,
                                       _____________



                              Cyr, Senior Circuit Judge,
                                   ____________________



                             and Keeton,* District Judge.
                                          ______________



                              _________________________



               John J.  Kuzinevich, with whom Ellen  Rappaport Tanowitz and
               ___________________            _________________________

          Kuzinevich & Miller, P.C. were on brief, for appellant.
          _________________________

               Warren J.  Hurwitz, with  whom Goodman, Greenzang  & Hurwitz
               __________________             _____________________________

          was on brief, for appellee.



                              _________________________


June 26, 1997

                              _________________________



          _____________

          *Of the District of Massachusetts, sitting by designation.



SELYA, Circuit  Judge.  This diversity  case involves a
                    SELYA, Circuit  Judge.
                           ______________



          $150,000 promissory note, the conditions  of its repayment, and a



          heated dispute  between the parties  about whether  the debt  has



          been  satisfied.  The court below thought not and entered summary



          judgment in favor of the noteholder.  We affirm.



          I.  A TALE OF TWO LETTERS
          I.  A TALE OF TWO LETTERS



                    In  the  summer  of 1990,  defendant-appellant  John J.



          Hayes, III, executed a promissory note for $150,000, secured by a



          mortgage  on  premises  owned by  a  real  estate  trust that  he



          controlled.1    The  lender  subsequently failed  and  plaintiff-



          appellee Cadle Company (C-Co.) acquired  the note (which was then



          in  arrears)  from  the  Federal  Deposit  Insurance  Corporation



          (FDIC).  Cecil C. Cadle (Cadle), C-Co.'s vice president, informed



          Hayes  of the  transfer and  the parties  commenced negotiations.



          The preliminary haggling is of no consequence because the parties



          reached an  agreement and reduced it  to writing.  Cadle  wrote a



          letter on February 2, 1993, which stated in pertinent part:



                         This will confirm our agreement that The

                    Cadle Company will delay the repayment period

                    of the  subject loan until  February 10, 1994

                    if we receive $80,000 by March 2, 1993.

                         The  Cadle  Company purchased  your loan

                    from the FDIC in liquidation  of Boston Trade

                    Bank and  has full  authority to release  the

                    lien on  the real  estate in return  for this

                    $80,000 payment.  We  hereby agree to release

                    the lien upon payment of the $80,000 by March

                    2, 1993.

                              
          ____________________



               1There is  some uncertainty  about whether Hayes  signed the

          note personally  or  in his  capacity as  a trustee  of the  real

          estate trust.  The point is of purely academic interest, however,

          as  Hayes,  acting  for   himself,  also  executed  an  unlimited

          guaranty.



                                          2



The appellant signed the letter the same day, thereby  indicating



          his assent to the proposed terms.



                    On  March 3,  Landmark  Bank mailed  a  bank check  for



          $80,000 to C-Co.2   The accompanying transmittal letter, over the



          signature of James Goodrich, a Landmark vice president, stated in



          its entirety:   "Enclosed is  a check for  $80,000 to  satisfy in



          full the loan you acquired from the FDIC between the Boston Trade



          Bank and  John J. Hayes.  Please execute a release and forward it



          to me as soon  as possible.  Thank you very  much for your help."



          Cadle endorsed and deposited the check and forwarded a release of



          the  mortgage lien as previously  agreed.  Hayes  made no further



          payments.



                    In September 1994 C-Co.  sued Hayes and a co-guarantor,



          Kevin O'Reilly, in federal district court, seeking to recover the



          balance  due on  the promissory  note, plus accrued  interest and



          collection costs.3  The  battle lines were quickly drawn:   Hayes



          insisted that  the  $80,000 payment  had  satisfied in  full  his



          obligations  under the  note, whereas  C-Co. insisted  with equal



          adamance that the payment did no  more than comply with the terms



          of the February 2 letter agreement (which merely deferred, rather



          than  canceled, the obligation to  pay the balance  due under the



          note).

                              
          ____________________



               2Although this check was sent one day later than the outside

          date specified  in the February 2 letter agreement, neither party

          contends that this delay  matters and we deem any  discrepancy to

          be waived.



               3O'Reilly  is not a party  to this appeal  and we abjure any

          further reference to him.



                                          3



To  make a  tedious tale  tolerably terse,  the parties



          agreed  to have a magistrate judge, rather than a district judge,



          preside over the case.  See 28 U.S.C.   636(c)(1) (1994); Fed. R.
                                  ___



          Civ. P.  73(b).   Thereafter, C-Co.  moved for summary  judgment,



          proffering,  among other  supporting  documents, the  February  2



          letter agreement.   Hayes filed  an opposition and  an affidavit.



          When C-Co. produced  Goodrich's sworn statement  that he had  not



          negotiated with either Hayes or Cadle about repayment of the loan



          and that he had not been  privy to any agreement that the $80,000



          payment  would   discharge  the   entire  debt,  Hayes   filed  a



          supplemental affidavit.  The  magistrate reviewed these and other



          materials, discerned  no genuine issue of  material fact, granted



          C-Co.'s motion, and  entered judgment  for a sum  certain.   This



          appeal followed.



          II.  ANALYSIS
          II.  ANALYSIS



                    This appeal  requires little more than  an inquiry into



          the permutations of the summary judgment standard.  We begin with



          some general  principles and  then move  to a  more case-specific



          appraisal.



                                          A.
                                          A.
                                          __



                    At the summary judgment stage, the trial court examines



          the  entire record "in the light most flattering to the nonmovant



          and indulg[es] all reasonable  inferences in that party's favor."



          Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir.
          _______________    __________________



          1994).   Only if  the record, viewed  in that  manner and without



          regard to credibility determinations, reveals no genuine issue as


4



to any material  fact may the court enter  summary judgment.  See
                                                                        ___



          Greenburg v. Puerto  Rico Maritime Shipping Auth.,  835 F.2d 932,
          _________    ____________________________________



          936 (1st Cir. 1987).



                    The summary judgment machinery operates in  two phases.



          First, the movant must  make a preliminary showing that  there is



          no genuine  issue of material  fact which requires  resolution in



          the crucible  of a trial.   Once this showing has  been made, the



          burden shifts  to the nonmovant to  demonstrate, through specific



          facts,  that   a  trialworthy   issue  remains.     See  National
                                                              ___  ________



          Amusements, Inc. v.  Town of Dedham, 43  F.3d 731, 735  (1st Cir.
          ________________     ______________



          1995); Maldonado-Denis, 23 F.3d at 581.
                 _______________



                    For  the purpose of summary judgment,  an issue of fact



          is "genuine" if it "may reasonably be resolved in favor of either



          party."  Maldonado-Denis, 23 F.3d at 581  (citations and internal
                   _______________



          quotation marks omitted).  For the same purpose, "material" facts



          are those which possess "the capacity  to sway the outcome of the



          litigation under  the applicable  law."  National  Amusements, 43
                                                   ____________________



          F.3d at 735.   Still,  establishing a genuine  issue of  material



          fact requires more than effusive rhetoric and optimistic surmise.



          "If  the evidence [adduced in opposition to the motion] is merely



          colorable, or  is not  significantly probative, summary  judgment



          may be granted."  Anderson v. Liberty  Lobby, Inc., 477 U.S. 242,
                            ________    ____________________



          249-50 (1986) (citations omitted).  In other words, the "evidence



          illustrating  the  factual controversy  cannot be  conjectural or



          problematic;  it must have substance  in the sense  that it limns



          differing versions of  the truth which a factfinder  must resolve


5



at an  ensuing trial."  Mack  v. Great Atl.  & Pac. Tea  Co., 871
                                  ____     ___________________________



          F.2d  179,  181  (1st  Cir. 1989).    "[C]onclusory  allegations,



          improbable  inferences,  and  unsupported speculation"  will  not



          suffice.   Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5,
                     ____________    _________________________



          8 (1st Cir. 1990).



                    We  proceed to  apply  these tested  principles to  the



          record  before us, mindful that we review the lower court's order



          de novo.  See Garside  v. Osco Drug, Inc.,  895 F.2d 46, 48  (1st
                    ___ _______     _______________



          Cir. 1990).



                                          B.
                                          B.
                                          __



                    The  case   for   summary  judgment   is   simple   and



          straightforward.    C-Co.  says  that  Hayes  owed  money on  the



          promissory  note;  that  it agreed  to  defer  a  portion of  the
                                                  _____



          indebtedness and  release  a security  interest if  Hayes made  a



          partial  payment of $80,000; that the terms of this deferral were



          commemorated in the  February 2 letter  agreement; and that,  the



          period  of the deferment having  elapsed, Hayes must  now pay the



          balance due under the note.  Hayes does not deny the authenticity



          of the February 2 letter agreement4 but nonetheless contends that



          a genuine issue of fact exists as to whether the  $80,000 payment



          was  made  and  accepted  in  full  satisfaction  of  the  entire



          indebtedness.  We  think that the  purported "proof" which  Hayes



                              
          ____________________



               4To be  sure, the appellant alludes vaguely to certain prior

          negotiations, but these cannot influence our decision as any such

          negotiations  were  clearly  superseded  by  the   execution  and

          delivery of the letter  agreement.  See, e.g., Brennan  v. Carvel
                                              ___  ____  _______     ______

          Corp., 929 F.2d 801,  806 (1st Cir. 1991); Amerada  Hess Corp. v.
          _____                                      ___________________

          Garabedian, 617 N.E.2d 630, 634 (Mass. 1993).
          __________



                                          6



has  assembled to substantiate his position is of a caliber which



          courts  regularly  have held  insufficient  to  defeat a  summary



          judgment motion.



                    On this record,  certain facts cannot be gainsaid:  the



          promissory note was validly executed,  it was not paid  according



          to its tenor, and its ownership was properly transferred to C-Co.



          The February 2 letter  agreement commemorates the parties' mutual



          assent to  an alternative  payment arrangement and  that document



          contains the signatures of both  parties   signatures which Hayes



          does  not allege  were  procured by  fraud, chicanery,  coercion,



          duress, or other untoward means.  That agreement, on its face, is



          clear and unambiguous.  Moreover, it reflects valid consideration



          given  and received.  It nowhere suggests that an $80,000 payment



          by  Hayes  will  discharge  the  indebtedness  in  full;  to  the



          contrary,  it states quite plainly that the receipt of $80,000 on



          or  before a  day  certain  will  enable  the  obligor  to  defer



          repayment of the  underlying debt for approximately one  year and



          will bring about the immediate release of the mortgage lien which



          secured the debt.



                    The  short of  it  is that,  by  presenting the  letter



          agreement in support of its motion for brevis  disposition, C-Co.
                                                 ______



          discharged its initial burden under Rule 56.  The question, then,



          is  whether  Hayes,  as  the  party  opposing  summary  judgment,



          succeeded  in  adducing  specific  facts   demonstrating  that  a



          trialworthy issue remains on some material fact.



                    Hayes  argues that there is  a genuine issue  as to the


7



nature  of the $80,000 payment.  But this argument comprises more



          cry than wool.   First, he labors to  create the impression  that



          the  parties entered into a series of negotiations apart from the



          February   2  letter  agreement,   and  that  these  negotiations



          culminated in  a  new understanding  that a  one-time payment  of



          $80,000 would discharge the  entire debt.  The problem  with this



          approach  is that it consists entirely of gauzy generalities:  in



          his affidavits, Hayes does  not say when or how  this arrangement
                                              ____    ___



          was consummated.   Moreover, he does not  claim that he and Cadle



          entered into such an arrangement personally; indeed, he does  not



          even suggest that  the two of  them discussed  the matter at  all



          between February  2 and March  3.  He  does state that  Cadle and



          Goodrich  "had numerous  conversations" during February  of 1993,



          but this statement   which  in all events is apparently based  on



          something less than personal  knowledge   proves nothing.   Hayes



          nowhere relates the details  of any such conversations,  nor does



          he indicate  that Goodrich was  authorized to act as  an agent on



          his behalf.  In the absence of specific facts, Hayes' innuendoes,



          heatedly denied by C-Co. and refuted by Goodrich, are  inadequate



          to block summary judgment.5   See, e.g., Maldonado-Denis, 23 F.3d
                                        ___  ____  _______________



          at 583; Vega  v. Kodak Caribbean, Ltd.,  3 F.3d 476,  479-81 (1st
                  ____     _____________________

                              
          ____________________



               5Withal,   the  appellee's   attempt   to  discount   Hayes'

          affidavits as  "self-serving"  misses the  mark.   A party's  own

          affidavit, containing relevant information of which he has first-

          hand  knowledge,  may  be  self-serving, but  it  is  nonetheless

          competent to  support or defeat  summary judgment.   See Nereida-
                                                               ___ ________

          Gonzalez v. Tirado-Delgado,  990 F.2d 701,  706 (1st Cir.  1993).
          ________    ______________

          The  difficulty with Hayes' affidavits is not that they are self-

          serving  but that they neither contain enough specifics nor speak

          meaningfully to matters within Hayes' personal knowledge.



                                          8



Cir.  1993); Mesnick v. General  Elec. Co., 950  F.2d 816, 825-26
                       _______    __________________



          (1st Cir. 1991).



                    The appellant's ace in the hole, as he envisions it, is



          Goodrich's  transmittal  letter.   We  do not  believe  that this



          communiqu ,  repudiated by its  author, can trump  the February 2



          letter agreement.   After all,  Goodrich has signed  an affidavit



          flatly rejecting Hayes' interpretation of his (Goodrich's) letter



          and  asserting that he never negotiated any agreement with either



          party as to the nature of the $80,000 payment.   Since Goodrich's



          March  3 epistle  lacks  any evidence  of  mutual assent  by  the



          parties,  and since the record does not otherwise supply any such



          evidence, the epistle cannot carry the day.6



                    To be sure,  Hayes states in the climactic paragraph of



          his main affidavit that:



                    I  believe that  the Cadle  Company took  the
                       _______

                    $80,000.00 from Landmark Bank under the terms

                    of an agreement between the Cadle Company and

                    the Bank that the $80,000.00 would constitute

                    payment in full of  all of the obligations of

                    the trust  and the guarantors under the terms

                    of the Note.  [Emphasis supplied.]



          However,  neither Cadle  nor Landmark  acknowledge that  any such



          agreement ever  existed.  Thus, Hayes'  contrary conclusion lacks



          force.   Statements made upon information  and belief, as opposed



          to  personal knowledge, are not entitled to weight in the summary



          judgment balance.  See Griggs-Ryan v. Smith, 904 F.2d 112, 117-18
                             ___ ___________    _____



          (1st Cir. 1990); see also Fed. R. Civ. P. 56(e).
                           ___ ____

                              
          ____________________



               6The  fact that  C-Co.  deposited the  $80,000 check  proves

          nothing,  as  that  action   was  entirely  consistent  with  the

          provisions of the February 2 letter agreement.



                                          9



In  sum, Hayes'  "proof" is  bereft of  any significant



          probative value.   Consequently,  we agree  with the  lower court



          that a  reasonable factfinder could  not conclude on  this record



          that the clear and unambiguous agreement between the parties made



          in February 1993 had been varied thereafter.



                                          C.
                                          C.
                                          __



                    Shifting  rhetorical gears, the appellant makes another



          tour around the track,  attempting to persuade us that  an accord



          and satisfaction  existed between the parties  which relieved him



          of  any further obligations under  the promissory note.   This is



          the same old whine in a slightly different bottle.



                    Under  Massachusetts law,  an  accord and  satisfaction



          exists when:



                         (1)  []  there  has  arisen  between the

                    parties  a  bona  fide  dispute  as   to  the

                    existence  or  extent  of liability;  (2)  []

                    subsequent to the arising of that dispute the

                    parties entered into  an agreement under  the

                    terms  of which the dispute is compromised by

                    the payment by  one party of a sum  in excess

                    of  that  which he  admits  he  owed and  the

                    receipt by the  other party of a  sum less in

                    amount than he claims is due him, all for the

                    purpose of  settling the dispute;  and (3)  a

                    performance by the parties of that agreement.



          Rust Eng'g Co. v. Lawrence Pumps, Inc., 401 F. Supp. 328, 333 (D.
          ______________    ____________________



          Mass.  1975).  The  evidence before us  shows as a  matter of law



          that no accord and satisfaction transpired here.



                    In the first place, the record reveals no dispute as to



          the extent of Hayes'  liability under the promissory note  at the



          time  of this asserted accord; the amount of indebtedness was not



          then  in question,  merely the  method by  which  repayment would



                                          10



occur.    In the  second place,  the  appellant has  proffered no



          significantly probative evidence    only Hayes' bare allegations,



          already  considered and found wanting    that the parties entered



          into the sort of  mutual agreement that could form  the basis for



          an accord and satisfaction.7  Massachusetts law is pellucid that,



          in the  absence of  convincing evidence  of  mutual assent,  mere



          partial payment of an existing debt does not constitute an accord



          and satisfaction.  See Emerson v. Deming, 23 N.E.2d 1016, 1018-19
                             ___ _______    ______



          (Mass. 1939);  Lipson v. Adelson,  456 N.E.2d 470,  471-74 (Mass.
                         ______    _______



          App. Ct. 1983).



          III.  CONCLUSION
          III.  CONCLUSION



                    We need go  no further.  A party  faced with a properly



          documented summary judgment motion should not be able to keep his



          case on life support merely by hurling  conclusory allegations in



          the  movant's direction.    So  it  is  here:    the  appellant's



          rhetorical flourishes are not  sufficiently probative to create a



          genuine issue  of  material fact  concerning  the nature  of  the



          $80,000 payment.  Hence,  the magistrate appropriately granted C-



          Co.'s motion for summary judgment.


Affirmed.  Costs to appellee.
                    Affirmed.  Costs to appellee.
                    ________   _________________


____________________



               7On  this point, Hayes' case stands in stark contrast to Bud
                                                                        ___

          McDevitt  Real Estate, Inc. v. Corona, 537 N.E.2d 608, 609 (Mass.
          ___________________________    ______

          App. Ct.  1989), in which  the Appeals  Court held that  a letter

          from one party  to another,  explicitly stating  that cashing  an
          __________________________

          enclosed check would constitute settlement of any and all claims,

          ripened  into  an accord  and  satisfaction  when  the check  was

          deposited.



                                          11