TD Bank v. N. Iron Works, Inc.

• Court: Superior Court of Maine
• Decided: February 1, 2012
• Docket: CUMcv-11-324
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CU:tvIBERLAND, ss. CIVIL ACTION DOCKET NO: CV-11-324

TD BANK, N.A. f /k/ a TD BANKNORTH, N.A.

Plaintiff,

V.

NORTHERN IRON WORKS, INC., MARC ARESNAULT and CHARLES I\IIALA TESTA,

Defendants,

ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Before the court is the plaintiff's Motion for Summary Judgment onlx:

against defendant, Northern Iron Works. The motion was filed on December 19,

2011. Northern Iron Works has not filed any opposition.

BACKGROUND

On April 24, 2008, TD Bank, N.A. ("TD" or "Plaintiff") entered into three

separate loan transactions with the defendant, Northern Iron Works ("Northern"

or "Defendant"). In the first transaction, Northern borrowed $551,205.00, as

evidenced by and subject to the terms of a certain promissory note ("First 2008

Note"). (SMF 'JI 2.) In the second transaction, Northern borrowed $810,000.00,

also evidenced by and subject to the terms of another promissory note ("Second

2008 Note"). (SI\IIF 'JI 3.) In the third transaction, Northern executed and

delivered a "Revolving Demand Note" to TD to secure up to $500,000.00 in ) revolving credit ("Third 2008 Note"). (SMF 'JI 4.) On July 9, 2009, Northern 1 borrowed $200,000.00, as evidenced by and subject to the terms of a certain

promissory note ("2009 Note"). (SMF

Each of these promissory notes (the "Notes") requires Northern to repay

the loans in accordance with their terms. Northern is in default on the Notes

because it has failed to make one or more payments owning. (SivIF <[ 6.) On

September 8, 2010, the Plaintiff provided Northern with notices of default and

demanded immediate payment in full of all amounts due, pursuant to the terms

of the Notes. (SMF

(SMF <[ 8.)

The Plaintiff filed this Complaint on July 21, 2011 against Northern, the

borrower, and against Arsenault and Malatesta as guarantors of the debt. The

defendants filed cmd Answer on August 12, 2011 providing a general denial of

the entire Complaint. 1 This matter has been stayed as to defendants Arsenault

and Malatesta under 11 U.S.C. § 342 because Arsenault and Malatesta have filed

petitions for relief under Chapter 7 of the United States Bankruptcy Code.

Therefore, the Plaintiff's Motion for Summary Judgment has only been asserted

may only proceed against Northern.

DISCUSSION

Summary judgment should be granted if there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of law. M.R.

Civ. P. 56(c). In considering a motion for summary judgment, the court should

view the facts in the light most favorable to the non-moving party, and the court

is required to consider only the portions of the record referred to and the

1 The Answer pur p rts to be the answ er f 1 orthern, A rsenault, and Mala testa. However, only Arsenault and Mala testa have stat"'d a denia l of aU " Allegations and ) Coun ts;' in the Compl aint. The court has treated th.is Answer as being effective for Northern as well. 2 material facts set forth in the parties' Rule 56(h) statements. E.g., Johnson v.

NicNeil, 2002 ME 99,

plaintiff has the burden of establishing each element of its claim without dispute

as to material fact within the summary judgment record. N. Star Capital

Acquisition, LLC v. Victor, 2009 ME 129,

The underlying claim against Northern on each of the Notes is breach of

contract. In order to prevail on a breach of contract claim, the plaintiff must

prove (1) breach of a material term of the contract; (2) causation; and (3)

damages. Nle. Energy Recovery Co. v. United Steel Structures, Inc., 1999 ME 31,

724 A.2d 1248.

The Plaintiff has properly submitted statements of fact lending support to

the conclusion that the first and second elements of its claim have been

established. However, the statement of damages is not fully supported by the

summary judgment record. The Plaintiff states the effective interests rates on

each note as follows: "First 2008 Note -11.18%, Second 2008 Note -11.41%,

Third 2008 Note - 9.00% and 2009 Note - 6.00%." (SMF

support for these figures is lacking in a few respects.

The Plaintiff explains that the default interest rate is equal to the rate

stated in each note and accrues from the day of the notice of default. (SMF

Each note appears to set a general interest rate and then provides for an increase

in the interest rate, effective upon an event of default. The First 2008 Note

establishes an initial interest rate of 6.41%. (SMF Ex. A.) Exhibit A to the

Statement of Material Facts only includes the first and last page of the

promissory note making it impossible for the court to verify the applicable and

)

3 correct default interest rate. 2 The Second 2008 Note sets the initial interest rate at

6.18% and allows an increase of 5% upon an event of default. (SMF Ex. B.) This

leads to an applicable interest rate of 11.18%, not 11.41% as claimed. The Third

2008 Note establishes the initial rate at 0.25% above the Wall Street Journal Prime

Rate, as published from time to time. (SMF Ex. C.) The default rate is equal to

the initial rate plus 5%. (Id.) The Plaintiff has not provided any information to

the court through which it can verify the applicable Wall Street Journal rate used

to calculate the 9.00%. Furthermore, it is unclear to the court why the Plaintiff

only seeks 6.00% on the 2009 Note, as it appears that different rate is applicable.

(S:tvIF Ex. D.)

Accordingly,

the Court ORDERS that the Plaintiff may submit further evidence and

documentation by affidavit and additional Rule 56(h) statements within 30 days

of the date of this Order, to which the defendant may respond. If nothing further

is received, the Motion is DENIED.

The Clerk is directed to incorporate this Order into the docket by

reference pursuant to :tvI.R. Civ. P. 79(a).

DATE: January 31, 2012

2 Despite having no obligation to search the record, M.R. Civ. P. 56(h)(4), the court ) examined the record for additional copies of this promissory note. Each copy only contained the first and last page. 4