People's United Bank v. Culver

CourtDistrict Court, D. Connecticut
DecidedAugust 21, 2019
Docket3:17-cv-00723
StatusUnknown

This text of People's United Bank v. Culver (People's United Bank v. Culver) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People's United Bank v. Culver, (D. Conn. 2019).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

PEOPLE’S UNITED BANK, Plaintiff, v. No. 3:17-cv-723 (VAB)

MICHAEL C. CULVER, Defendant.

RULING AND ORDER ON PLAINTIFF’S MOTION TO DISMISS People’s United Bank sued Michael Culver for two breaches of a loan agreement for Skip Barber Racing School LLC (“Racing School”), a company for which Mr. Culver was the majority owner. Complaint, ECF No. 1 (“Compl.”), at 2–3. Mr. Culver has responded by, inter alia, filing a counterclaim for tortious interference with contracts and asserting several affirmative defenses, including an unclean hands defense. Defendant’s Amended Answer to Plaintiff’s Complaint, ECF No. 25, at 5–7. People’s United Bank moved to dismiss Mr. Culver’s counterclaim for lack of subject- matter jurisdiction and to strike his unclean hands defense. Motion to Dismiss, ECF No. 27. For the following reasons, the Court GRANTS People’s United Bank’s motion to dismiss and GRANTS People’s United Bank’s motion to strike. The Court dismisses Mr. Culver’s counterclaim for tortious interference with contract and dismisses the affirmative defense of unclean hands from the Amended Answer. Because Mr. Culver is proceeding pro se, the Court will not require him to file the Amended Answer again, but this case will proceed without this defense or any allegations relating to it being viable. I. FACTUAL AND PROCEDURAL BACKGROUND A. Factual Allegations On January 25, 2011, People’s United Bank agreed to loan the Racing School up to $1,000,000. Compl. at ¶ 8. People’s United Bank alleges that Mr. Culver, as the majority owner

of the racing school, guaranteed the loan obligations. Id. at ¶ 9. People’s United Bank also alleges that the loan is currently in default and the obligations “have been accelerated and demanded of both the Racing School and Culver.” Id. at ¶ 10. As the holder of the loan note, People’s United Bank sought to hold Mr. Culver responsible for the loan obligations, but People’s United Bank alleges that “Culver has refused and failed to pay the indebtedness owed pursuant to the 2011 Note, or otherwise duly perform the Obligations under the 2011 Loan Agreement and the Culver 2011 Guaranty.” Id. at ¶¶ 11, 12. People’s United Bank alleges the principal amount on the loan is $992,235.72, interest accrued as of February 28, 2017 is $38,342.01, and late charges are $1,387.06. Id. at ¶ 13. On September 12, 2013, People’s United Bank agreed to make available to the Racing

School a second loan of $200,000. Id. at ¶ 18. People’s United Bank alleges that Mr. Culver has guaranteed the loan obligations for this loan. Id. at ¶ 20. On May 22, 2015, the parties amended the loan agreement. Id. at ¶ 19. People’s United Bank alleges that the 2013 loan agreement “is in default and Obligations have been accelerated and demanded of both the Racing School and Culver.” Id. at ¶ 21. Nevertheless, Mr. Culver allegedly “has refused and failed to pay the indebtedness owed pursuant to the 2013 Note, or otherwise duly perform the Obligations under the 2013 Loan Agreement and the Culver 2013 Guaranty.” Id. at ¶ 23. People’s United Bank alleges that the principal amount on the second loan is $200,000, interest accrued as of February 28, 2017 is $6,844.44, and late charges are $10,297.22. B. Procedural History On May 2, 2017, People’s United Bank filed its Complaint against Mr. Culver. Compl. On September 11, 2017, the parties jointly filed an ex parte motion for a stay of the

proceedings, which the Court granted. Joint Ex Parte Motion for Stay and Extension of Time for Further Proceedings, ECF No. 9; Order, ECF No. 10. Following a status report, the Court again stayed the proceedings. Status Report, ECF No. 11; Order Staying Case, ECF No. 12. On September 10, 2018, People’s United Bank moved for default entry, which the Clerk of the Court granted. Motion for Default Entry, ECF No. 14; Order, ECF No. 15. On October 3, 2018, Mr. Culver objected to the motion for default entry. Objection, ECF No. 17. On October 9, 2018, People’s United Bank moved for default judgment, which the Court denied. Motion for Default Judgment, ECF No. 16; Order, ECF No. 18.

On October 10, 2018, the Court issued a scheduling order directing Mr. Culver to file an answer regarding the default judgment. Scheduling Order, ECF No. 19. On October 15, 2018, Mr. Culver filed an Answer. Answer to Complaint with Affirmative Defenses, ECF No. 22. On November 8, 2018, Mr. Culver filed an Amended Answer. Amended Answer to Complaint with Affirmative Defenses, ECF No. 25. He asserted four affirmative defenses: (1) “The Complaint fails to state a claim upon which relief may be granted;” (2) “The personal guarantees, Culver 2011 Guaranty and Culver 2013 Guarantee (as defined in Plaintiff’s pleadings) fail for lack of consideration;” (3) “The Defendant reserves his right to amend this answer and to assert further affirmative defenses as they become evident through discovery, investigation and prosecution of his defense;” and (4) that People’s United actions is pursuing a writ of possession and temporary restraining order in Georgia state court negatively impacted the Racing School’s reputation and the value of its

assets, increased the Racing School’s deposit liability, severely damaged the Racing School’s employee morale, hindered the Racing School and Mr. Culver’s ability to generate revenue to pay the bank, and caused the Racing School to file bankruptcy. Id. at 5–6. Mr. Culver also asserts a tortious interference with contracts counterclaim because “[t]he Defendant asserts that Plaintiff interfered with numerous contractual agreements between Skip Barber Racing School LLC [] and its customers who had contracted with [the Racing School] for driving school programs and had paid in advance.” Id. at 6. Mr. Culver alleges that the unavailability of assets was a “direct and proximate result of the breach of breach of contracts with its customers,” which caused substantial damage. Id. at 7. Mr. Culver estimates that his losses exceeded $1,000,000 because of his sixty-eight percent ownership of the Racing School.

Id. On January 2, 2019, People’s United Bank moved to dismiss Mr. Culver’s counterclaim for a lack of subject-matter jurisdiction and moved to strike Mr. Culver’s fourth affirmative defense. Motion to Dismiss, ECF No. 27. On January 3, 2019, the Court referred the case to U.S. Magistrate Judge Sarah Merriam for a settlement conference. Order Referring Case, ECF No. 28. On January 17, 2019, plaintiff’s counsel communicated to Magistrate Judge Merriam that a settlement conference would not be productive. Order, ECF No. 33. On January 23, 2019, Mr. Culver responded to People’s United’s Bank motion to dismiss. Objection, ECF No. 34. On January 30, 2019, People’s United Bank filed a reply to Mr. Culver’s response. Reply to Response, ECF No. 36. On February 7, 2019, Mr. Culver responded to the People’s United Bank’s reply.

Response, ECF No. 37. On May 16, 2019, the Court held a Rule 26(f) telephonic scheduling conference. Minute Entry, ECF No. 42. The same day, the Court issued a scheduling order. Scheduling Order, ECF No. 43. II. STANDARD OF REVIEW A. Subject-Matter Jurisdiction “Federal courts are courts of limited jurisdiction[.]” Gunn v. Minton, 568 U.S. 251, 256 (2013); see also Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (explaining that “[n]o principle is more fundamental to the judiciary’s proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies”). If a

federal court lacks subject-matter jurisdiction under Rule 12(b)(1), it must dismiss the lawsuit. See Fed. R. Civ. P. 12(h)(3); Fed. R. Civ. P. 12

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People's United Bank v. Culver, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peoples-united-bank-v-culver-ctd-2019.