Mack Financial Services v. Ackel

District Court, E.D. Louisiana·Decided June 10, 2021·No. 2:20-cv-02814·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

MACK FINANCIAL SERVICES, ET AL CIVIL ACTION VERSUS NO. 20-2814 c/w 21-669 GEORGE L. ACKEL III, ET AL SECTION "B"(5) ORDER AND REASONS Before the Court is plaintiffs’ Motion for Summary Judgment (Rec. Doc. 17). No opposition or response was filed by defendants. For the following reasons, IT IS ORDERED that the motion (Rec. Doc. 17) is GRANTED; IT IS FURTHER ORDERED that the Court shall retain jurisdiction to decide plaintiffs’ motion for attorney’s fees, provided that the motion and supporting materials are filed within fourteen (14) days of this order and in accordance with local rules. FACTS OF THE CASE AND PROCEDURAL HISTORY This suit arises from a breach of guaranty claim wherein the defendants Fleetstar, LLC (“Fleetstar”), George J. Ackel III (“Ackel”), and Ackel Construction Company (“Ackel Construction”)(collectively “defendants”) allegedly failed to make payments owed to plaintiffs Mack Financial Services, a division of VFS US LLC (“Mack Financial”) and Volvo Financial Services, a division of VFS US LLC (“Volvo Financial”)(collectively “plaintiffs”). Rec. Doc. 1. On or about August 17, 2018, Fleetstar allegedly executed a Master Loan and Security Agreement (“Master Agreement”) in favor of Mack Financial. Rec. Doc. 17-3 at 1. Fleetstar executed a

secured promissory note and schedule (“Schedule 001 Contract”) through which Fleetstar borrowed the principal amount of $547,708 from Mack Financial to finance its purchase of four 2019 Mack Pinnacle 64T Daycabs (“Schedule 001 Equipment”). Id. at 1-2. Fleetstar allegedly agreed to repay the amount borrowed plus interest in 60 monthly payments of $10,713.97. Id. at 2. Accordingly, to secure the payment due under the Schedule 001 Contract, Fleetstar allegedly granted Mack Financial a security interest in the Schedule 001 Equipment (“Schedule 001 Collateral”), which Mack Financial perfected on August 21, 2018. Id. On or about February 28, 2018, A & Brothers Construction

Company of Louisiana, LLC (“A & Brothers”) executed a credit sales contract (“Schedule 003 Contract”) through which A & Brothers borrowed the principal amount of $127,436.77 from Old River of New Orleans, LLC (“Old River”) to finance its purchase of a 2018 Mack GU13 truck with 2018 OX Body (“Schedule 003 Equipment”). Id. at 3. A & Brothers allegedly agreed to repay the amount borrowed plus interest in 72 monthly installments of $2,524.01. Id. To secure payments due under the Schedule 003 Contract, A & Brothers allegedly granted Old River a security interest in the Schedule 003 Equipment (“Schedule 003 Collateral”). Id. On or about February 28, 2018, A & Brothers assigned its

rights and interests in Schedule 003 Contract and Collateral to Mack Financial. Id. On July 10, 2018, Mack Financial perfected its interest in the Schedule 003 Collateral. Id. On September 18, 2018, Mack Financial further perfected its interest in the Schedule 003 Collateral by filing a UCC-1 Financing Statement with the Louisiana Secretary of State. Id. at 3-4. On or about April 10, 2018, A & Brothers executed a credit sales contract (“Schedule 004 Contract”) through which A & Brothers borrowed the principal amount of $117,369.45 from Old River to finance its purchase of a 2018 Mack GU713 truck (“Schedule 004 Equipment”). Id. at 4. A & Brothers allegedly agreed to repay the amount borrowed plus interest in 72 monthly payments of $2,318.47. Id. Accordingly, to secure payments due under the Schedule 004

Contract, A & Brothers allegedly granted Old River a security interest in the Schedule 004 Equipment (“Schedule 004 Collateral”). Id. On that same date, Old River assigned its rights and interests in the Schedule 004 Contract and Collateral to Mack Financial. Id. On April 19, 2018, Mack Financial perfected its interest in the Schedule 004 Collateral. Meanwhile, on or about June 29, 2018, A & Brothers merged with Fleetstar, with Fleetstar being the surviving entity. Id. at 4-5. On or about September 5, 2018, Fleetstar executed a secured

promissory note (“Schedule 005 Contract”) through which Fleetstar borrowed the principal amount of $335,042.94 from Volvo Financial to finance its purchase of two 2019 Volvo VHD84F trucks with an attached 16 ft. steep dump bed (“Schedule 005 Equipment”). Id. at 5. Fleetstar allegedly agreed to repay the amount borrowed plus interest in 60 monthly payments of $6,579.07. Id. Accordingly, Fleetstar allegedly granted Volvo Financial a security interest in the Schedule 005 Equipment (“Schedule 005 Collateral”), which was properly perfected on September 21, 2018 and September 24, 2018. Id. at 5-6. Volvo Financial further perfected its interest in the Schedule 005 Collateral by filing a UCC-1 Financing Statement with the Louisiana Secretary of State on September 11, 2018. Id. On or about August 17, 2018, defendants Ackel and Ackel

Construction executed a continuing guaranty, pursuant to which, for acknowledged consideration, guaranteed the full, prompt and complete payment and performance of all sums owed by Fleetstar to Mack Financial under Schedule 001, Schedule 003, and Schedule 004 Contracts (“Continuing Guaranty 001”). Id. at 6. On or about September 5, 2018, Ackel and Ackel Construction likewise executed a continuing guaranty, pursuant to which, for acknowledged consideration, guaranteed the full, prompt, and complete payment and performance of all sums owed by Fleetstar to Volvo Financial under Schedule 005 Contract (“Continuing Guaranty 002”). Id. All contracts provided that Fleetstar would be in default if

it failed to pay any amount due to Mack Financial or Volvo Financial, and upon default, the latter may, at its option, declare all indebtedness due to it immediately due and, without notice, demand, or legal process, take possession of the collateral. Rec. Doc. 1 at 9. On April 2, 2019, Fleetstar filed a voluntary petition under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Eastern District of Louisiana. Id. at 8. Subsequently, on February 5, 2020, the bankruptcy court granted plaintiffs’ motion to lift the stay, specifically as to the Schedule 001, Schedule 003, Schedule 004 and Schedule 005 Collateral. Id. The court’s decision to grant the motion allowed plaintiffs to pursue the underlying collateral. Id.

In an effort to avoid judicial intervention, plaintiffs allegedly contacted Fleetstar to see if it would voluntarily surrender the collateral. Rec. Doc. 17-3 at 7. In response, Ackel Construction sent plaintiffs an invoice for storage of the collateral and informed plaintiffs that they would not turn over the collateral until the invoice was paid. Id. Although plaintiffs disputed liability on the invoice, they agreed to pay the purported “storage costs” to attempt to effectuate immediate return of the collateral. Id. at 8. Despite this agreement, plaintiffs allege that Ackel Construction and Fleetstar did not return the collateral and ceased further communication. Id.

On October 15, 2020, plaintiffs filed a complaint against Ackel and Ackel Construction. Rec. Doc. 1. Plaintiffs alleged that Fleetstar defaulted under the terms of the Schedule 001, Schedule 003, and Schedule 004 Contracts (“Mack Financial Contracts”) for failure to pay any amount due thereunder. Id. According to plaintiffs, as of March 30, 2021, the total balance due under the Mack Financial Contracts was $845,915.28 plus interest and late fees, reasonable attorney’s fees, and all costs of the proceedings. Rec. Doc. 17-3 at 12-13. Plaintiffs also alleged that Fleetstar defaulted under the terms of the Schedule 005 Contract (“Volvo Financial Contract”) for failure to remit payments due thereunder. Rec. Doc. 1 at 9.

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