Wells Fargo Rail Corp. v. Black Iron, LLC (In re Black Iron, LLC)

594 B.R. 898
CourtUnited States Bankruptcy Court, D. Utah
DecidedDecember 4, 2018
DocketBankruptcy No. 17-24816; Adversary Proceeding Number: 17-2088; (Consolidated with Adv. Pro. No. 17-2094)
StatusPublished

This text of 594 B.R. 898 (Wells Fargo Rail Corp. v. Black Iron, LLC (In re Black Iron, LLC)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wells Fargo Rail Corp. v. Black Iron, LLC (In re Black Iron, LLC), 594 B.R. 898 (Utah 2018).

Opinion

WILLIAM T. THURMAN, U.S. Bankruptcy Judge

I. Introduction

The matter before the Court is the Defendants/Third-Party Plaintiffs' Motion for Summary Judgment on Black Iron, LLC's Claims and Memorandum in Support (the "Motion") filed on October 15, 2018 at Dkt. No. 67. The Defendants and Third-Party Plaintiffs in this action will be collectively referred to as "Wells Fargo Rail" and the Defendants will be collectively referred to as "Black Iron." Wells Fargo Rail seeks summary judgment in its favor dismissing all claims brought against it by Black Iron for storage fees and trespass. Black Iron filed an objection to the Motion on November 12, 2018 at Dkt. No. 71. Wells Fargo Rail filed a reply on November 21, 2018 at Dkt. No. 74.

At the hearing on the Motion held on Nov. 29, 2018, Troy Aramburu and Bret Evans appeared on behalf of Wells Fargo Rail. Dana Farmer and Blake Hamilton appeared on behalf of Black Iron. The Court heard oral argument, read the briefs filed by the parties, conducted its own independent review of the law and makes the following findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052.

*902II. Jurisdiction, Venue and Notice

The jurisdiction of this Court is properly invoked under 28 U.S.C. § 1334, and has been expressly consented to by the parties. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2), and this Court may enter a final order. Venue is proper under the provisions of 28 U.S.C. §§ 1408 and 1409. Notice of the hearing is found to be proper in all respects.

III. Standard for Summary Judgment

Under Federal Rule of Civil Procedure 56(a), which is made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056, the Court shall grant a motion for summary judgment "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).

Substantive law determines which facts are material and which are not. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Whether a dispute is genuine turns on whether the evidence is such that a reasonable fact finder could return a verdict for the nonmoving party. The court does not weigh evidence or make credibility determinations at this point, see id. at 249, 106 S.Ct. 2505, but is to decide whether there is a genuine issue for trial.

The moving party bears the burden to show that it is entitled to summary judgment. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This burden includes properly supporting its summary judgment motion as required by Rule 56(c). See Murray v. City of Tahlequah, Okla. , 312 F.3d 1196, 1200 (10th Cir. 2002). Once the moving party meets this burden, "the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter." Concrete Works of Colorado, Inc. v. City & County of Denver , 36 F.3d 1513, 1518 (10th Cir. 1994) (citations omitted).

It is under these parameters that the Court issues this decision.

IV. Factual Background

This dispute arose out of a lease transaction involving railcars and locomotives used in a mining venture near Cedar City, Utah. In general, the Court is called upon to make a determination of whether Wells Fargo Rail should be assessed storage fees for the railcars and locomotives that are on railroad tracks situated on Black Iron's land. Beginning in June 2010, Helm Financial Corporation, Wells Fargo Rail's predecessor-in-interest, and Helm-Pacific Leasing, as lessors, entered into four leases and related guaranties (the "Leases") with CML Metals Corporation ("CML Metals") and PIC Railroad, Inc. d/b/a CML Railroad, Inc. ("CML Railroad"), for 540 railcars and four locomotives (the "Equipment"). During the next four years, CML Metals used the Equipment in its mining operations and surrounding real property then-owned by CML Metals (the "Property"). In October 2014, CML Metals suspended operations and stopped paying Wells Fargo Rail the payments due under the Leases. By letter dated November 20, 2014,1 CML Metals asked Wells Fargo *903Rail to forbear from exercising available remedies in order to allow CML Metals an opportunity to be sold as a going concern. The Equipment remained on CML Metals' Property while CML Metals and Wells Fargo Rail began negotiating a forbearance agreement, and several drafts were exchanged up until March 2015.2 However, the forbearance agreement was never signed.

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Bluebook (online)
594 B.R. 898, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wells-fargo-rail-corp-v-black-iron-llc-in-re-black-iron-llc-utb-2018.