arbitration hearing shall take place on the date and time set forth in the order of the Court". (emphasis added).
It is clear from a reading of Local Rule 8 that the judges of this Court, in promulgating Local Rule 8, sought to establish a program of compulsory arbitration for those cases eligible for arbitration. The rule was never intended to make arbitration optional in those cases designated by the rule. The purpose of the program is to save litigants time and money by providing them with a prompt and less expensive alternative to a courtroom trial. Because of the cooperation of this District's bench and bar, Local Rule 8's compulsory arbitration program has relieved this Court of some of the constantly increasing caseload. However, the goals of the arbitration program and the authority of this Court would be seriously undermined if a defendant were permitted to refuse to attend an arbitration hearing and then demand trial de novo.
In this case, the defendant had notice of the arbitration hearing, its date, time, and location. Defendant never requested a continuance but simply declined to participate in the arbitration. Under these circumstances, the defendant, by failing to follow this Court's Order of July 12, 1982 and the procedures of Local Rule 8, is precluded from demanding a trial de novo. Under these circumstances, the proper course of action by the plaintiff would have been to file a motion to strike defendant's demand for trial de novo. Instead, plaintiff addressed defendant's failure to participate in the arbitration hearing as one of two alternative grounds for summary judgment. As heretofore pointed out, the plaintiff's affidavit in support of its second ground for summary judgment, which has not been contradicted, establishes that there is no genuine issue of material fact and that plaintiff is entitled to judgment as a matter of law. It would therefore appear that defendant lacked a defense to this action.
The Code of Professional Responsibility, in setting forth the standards of conduct by which attorneys shall govern themselves, states that "a lawyer shall not file a suit, assert a position, conduct a defense, delay a trial, or take other action" when such trial tactics would constitute mere harassment or efforts to delay the inevitable outcome of the litigation. See American Bar Association Model Code of Professional Responsibility, Disciplinary Rule 7-102(A) (1) (1979). In this case, where the defendant knowingly did not even attempt to appear at the arbitration hearing, defendant's demand for trial de novo may have been filed merely for the purposes of delay.
In its summary judgment motion, plaintiff notes that the deposition of the defendant sets forth the uncontradicted fact that she signed an unconditional guaranty which obligates her to indemnify the Bank should Wheels, Inc. fail to fulfill the terms of the loan agreement between Wheels, Inc. and the Bank. It is also undisputed that Wheels, Inc. ceased making payments and that the Bank made timely demand upon defendant Hughes to fulfill the express terms of the guaranty that she signed. Equally undisputed is the fact that defendant Hughes has not fulfilled her obligations to the Bank pursuant to the Guaranty.
In view of the fact that the record shows that there are not genuine issues of material fact, the plaintiff is entitled to summary judgment in the amount of the principal balance due on the obligation in the amount of $23,059.00 plus interest in the agreed amount of 19% per annum, which interest totals $7,732.74 plus a reasonable attorney's fee in the amount of $3,734.15, said amount being uncontested by the defendant.
Both Massachusetts law and Pennsylvania law, the only two bodies of law that could be applicable to this case, see CBS, Inc. v. Film Corp. of America, 545 F. Supp. 1382, 1385-87 (E.D. Pa. 1982), provide that a guaranty creates an enforceable contractual obligation against the guarantor (Hughes). The guaranteed party (the Bank) need not first sue the debtor (Wheels, Inc.) but may bring suit directly against the guarantor (Hughes). See Downer v. United States Fidelity & Guaranty Co. of Maryland, 46 F.2d 733 (3d Cir. 1931); Finance America Credit Corp. v. Kruse Classic Auction Co., 428 F. Supp. 135 (E.D. Pa. 1977); Miners' State Bank v. Auksztokalnis, 283 Pa. 18, 128 A. 726 (1925); 17 Penn. Law En. Guaranty, § 10 at 174. See Welch v. Walsh, 177 Mass. 555, 59 N.E. 440 (1901). See also Charlestown Five Cents Savings Bank v. Wolf, 309 Mass. 547, 36 N.E.2d 390 (1941); Mutual Bank for Savings v. Silverman, 13 Mass. App. 1059, 434 N.E.2d 1027 (1982). Furthermore, the express terms of the Guaranty provide that "the rights and obligations of the parties hereto shall be governed, construed and interpreted according to the laws of the Commonwealth of Massachusetts" and that the liability of the guarantor (Hughes) "is direct and unconditional and may be enforced without requiring . . . resort to any other right, remedy, or security . . . ." An appropriate Order will be accordingly entered.
AND NOW, this 10th day of February, 1983, upon consideration of plaintiff's motion for summary judgment and defendant's response thereto, for the reasons set forth in this Court's Memorandum of February 10th, 1983,
IT IS HEREBY ORDERED:
1. Defendant's demand for trial de novo of the arbitration held in this matter on August 26, 1982 is STRICKEN;
2. Plaintiff's motion for summary judgment on the basis of defendant's obligations to plaintiff pursuant to the guaranty agreement of March 5, 1981 is GRANTED;
3. Judgment is entered IN FAVOR of plaintiff New England Merchants Bank and AGAINST defendant Katy E. Hughes in the amount of $34,525.89.
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