Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Pride Mobility Products Corp. v. Mobility Products Unlimited

October 16, 2009

PRIDE MOBILITY PRODUCTS CORP., PLAINTIFF,
v.
MOBILITY PRODUCTS UNLIMITED, LLC, JOHN WARD, THERESA M. WARD, AND BRYAN DYLEWSKI, DEFENDANTS.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is the Motion for Partial Summary Judgment of Plaintiff Pride Mobility Products Corp. ("Pride") and the Motion for Summary Judgment of Defendant Bryan Dylewski. (Docs. 78, 81.) Because a genuine issue of material fact exists regarding breach of the oral contract forged between Pride and Defendant Mobility Products Unlimited, LLC ("MPU"), Pride's Motion for Partial Summary Judgment on this issue will be denied. However, no genuine issue of material fact exists regarding Defendant Bryan Dylewski and Defendants John and Theresa M. Ward's liability under the Guaranty and Suretyship Agreements signed by them, and Pride's Motion for Partial Summary Judgment on this issue will be granted. Also, genuine issue of material fact exists regarding the amount of damages for which Defendant Bryan Dylewski and Defendants John and Theresa M. Ward are liable and Pride's Motion for Partial Summary Judgment on this issue will be denied. Finally, there is no genuine issue of material fact regarding Defendant Bryan Dylewski's liability under the Guaranty and Suretyship Agreement and his Motion for Summary Judgment will be denied.

The Court has jurisdiction over the claims arising under federal law pursuant to 28 U.S.C. §§ 1332.

BACKGROUND

A. FACTUAL BACKGROUND

In 1996, Pride began providing MPU with mobility products such as scooters and power chairs. (Doc. 79, ¶ 14.) MPU was originally founded by Defendant Bryan Dylewski ("Dylewski") and his uncle, Richard Dylewski. (Dylewski Dep. 10:24-11:3, June 30, 2009). In 2002, Richard Dylewski sold his one-half share of MPU to Defendant John Ward, and Ward served as president of MPU from 2002 to 2005, and CEO from 2005 until 2008. (Ward Dep. 7:17-8:18, June 30, 2009.)

On May 18, 2005, John Ward entered into a Guaranty and Suretyship Agreement with Pride in order to continue the entities' business relationship and to secure future payments. (Ward Dep. 35:23-36:10.) In this agreement John Ward would "unconditionally guarantee to PRIDE the prompt and punctual payment of all sums dues from DEBTOR to PRIDE as well as any damages including collection fees and legal expenses that may arise in consequence of the failure of DEBTOR to make such payments when due." (Doc. 79, Ex. K.) The agreement applied to "any and all debts existing as of the date of this Agreement from DEBTOR to PRIDE, any and all debts about to be incurred by DEBTOR in favor of PRIDE reasonably contemporaneous with the execution of this Agreement, and any and all debts arising out of the sale of products from PRIDE to DEBTOR as aforereferenced." (Id.) On August 3, 2005, Teresa M. Ward, in order to continue the business relationship between MPU and Pride, entered into a Guaranty and Suretyship Agreement containing this same language. (Doc. 81, Ex. J.)

On August 25, 2000, Dylewski also signed a Guaranty and Suretyship Agreement with Pride. (Doc. 81, Ex. G.) The only significant difference between the Dylewski Agreement and the ones signed by the Wards is that the Dylewski Agreement did not include collection costs and attorney's fees as recoverable damages. (Id.)

In 2004, MPU came under investigation by the Office of the Inspector General ("OIG") for potential violations of Medicare. (Dylewski Dep. 19:21-21:8.) As a result of this investigation, MPU signed a settlement agreement in 2005, wherein it agreed to pay two million, seven hundred seventy-five thousand dollars ($2,775,000.00) to the United States. (Doc. 81, Ex. L.) According to Dylewski, there was a verbal understanding between MPU's attorneys and Dylewski that part of the agreement included removing Dylewski from his management role at MPU, despite retaining his ownership interest. (Dylewski Dep. 24:21-25:8.) At that time, Thomas Donahue took over the role of president at MPU. (Doc. 79, ¶ 38.)

Between 1996 and 2005, MPU ordered its scooters from Pride on its credit account. (Doc. 79, ¶ 26.) In the fall of 2005, Pride scrutinized MPU's financial records and concluded that MPU had "serious problems" financially. (Meuser Dep. 20:24-21:12, July 1, 2009.) The President of Pride at the time estimated that the outstanding balance owed by MPU to Pride was approximately eight hundred thousand dollars ($800,000.00) in November 2005. (Meuser Dep. 27:17-27:23.) By January 2006, MPU's outstanding balance on its account with Pride was approximately 1.448 million dollars ($1,448,000.00). (Tavella Dep., 33:23-34:10, July 1, 2009.) To attempt to pay down the debt on their account, MPU entered into a Note with Pride in January of 2006, calling for MPU to pay between forty and forty-five thousand dollars ($40,000.00-$45,000.00) per month for twelve months, to remove five hundred thousand dollars ($500,000.00) from the outstanding balance owed to Pride. (Tavella Dep. 24:19-24:24.) MPU successfully paid off the Note, but still owed Pride approximately nine hundred forty-eight thousand dollars ($948,000.00). (Tavella Dep., 34:11-34:15.)

In 2007, MPU's management decided that it would change its business model and prepay for scooters only when orders came in, rather than requesting products in anticipation of orders and charging them to a credit account. (Doc. 79, ¶ 43.) In April 2007, MPU and Pride entered into an oral payment agreement under which MPU would make payments of approximately ten thousand dollars ($10,000.00) per week or forty thousand dollars ($40,000.00) per month. (Doc. 79, ¶ 48.) It is Pride's position that this oral agreement did not encompass new product orders, which were to paid for up front, as per MPU's new plan to prepay for product. (Tavella Dep. 44:7-44:23.)

MPU continued to receive product until at least December 2007. (Doc. 79, Ex. S.) In May and June 2007, MPU was able to pay forty-two thousand, two hundred eighty dollars and eighty-two cents ($42,280.82) and thirty-four thousand, seventy-eight dollars and three cents ($34,078.03) toward the principal on their debt, respectively. (Id.) In July 2007, MPU paid over ten thousand dollars ($10,000.00) on two separate weeks, but only paid thirteen thousand, three hundred seven dollars and forty-one cents ($13,307.41) toward the debt principal for the month. Between August 2007 and December 2007, the amounts paid toward the principal of the debt are as follows: August: $55,502.48, September: $29,453.49, October: $27,271.97, November: $15,294.50, December:

$43,154.76.

On December 12, 2007, Pride sent a letter to John and Teresa M. Ward demanding payment in full on MPU's outstanding account balance, pursuant to the Guaranty and Suretyship Agreements of May 18, 2005 and August 3, 2005. (Doc. 79, Ex. A.) A similar letter was sent to Dylewski on December 14, 2007 and January 28, 2008. (Doc. 79, Exs. V, W.) Pride also sent a letter to Thomas Donahue at MPU on December 12, 2007, claiming that MPU had reduced its payments and giving MPU ten (10) days to work out a solution before the matter was turned over to the legal department. (Doc. 79, Ex. T.).

B. PROCEDURAL HISTORY

On January 22, 2008, Pride filed a complaint against MPU and John and Teresa M. Ward. In its January 22, 2008 Complaint, Pride presented four claims including (1) breach of contract by MPU (Count I), (2) unjust enrichment by MPU (Count II), (3) breach of Guaranty and Suretyship Agreement by John Ward (Count III), and (4) breach of Guaranty and Suretyship Agreement by Teresa M. Ward (Count IV). (Pride Mobility Complaint, Doc. 30, Ex. A.)

On February 5, 2008, Pride filed a Complaint in a second action naming Bryan Dylewski as Defendant. (Doc. 1.) The February 5, 2008 Complaint presents a single count against Bryan Dylewski for a breach of the Guaranty and Suretyship Agreement and seeks a judgment in the amount of one million thirty-two thousand, nine hundred seventeen dollars and ninety-one cents ($1,032,917.91). On May 6, 2008, Pride filed a Motion to Consolidate the cases involving MPU, John and Teresa M. Ward, and Bryan Dylewski. (Doc. 9.) The Court granted this motion in an Order dated June 20, 2008. (Doc. 20.)

On April 30, 2008, Dylewski filed an Answer, Affirmative Defenses, and Third Party Claim. (Doc. 8.) On June 18, 2008, Third Party Defendant Invacare Corporation filed a Motion to Dismiss Dylewski's Third Party Complaint pursuant to Federal Rules of Civil Procedure 12(b)(5) & (6) and a Motion to Strike pursuant to Federal Rule of Civil Procedure 11(a). On July 28, 2008, Third Party Defendants Mobility Products Unlimited and John Ward filed a Motion to Dismiss Dylewski's Third Party Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) & (6). (Doc. 29.) Teresa M. Ward, a Defendant in Pride's original action, also joined in this Motion to Dismiss even though she was not named in Dylewski's Third Party Complaint. On July 31, 2008, Third Party Defendant Thomas Donahue joined in the Motion to Dismiss filed by MPU and John Ward on July 28. (Doc. 32.) On January 27, 2009, this Court dismissed all of Dylewski's Third Party Claims. (Doc. 55.)

On July 31, 2009, Pride filed a Motion for Partial Summary Judgment. (Doc. 78.) That same day, Dylewski also filed a Motion for Summary Judgment. (Doc. 81.) All current motions have been ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.