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Manufacturers and Traders Trust Co v. Chalpin Dental Associates

March 26, 2012



Two motions are currently before the court in this matter. First, the plaintiff, Manufacturers and Traders Trust Co. ("M&T Bank"), has moved for summary judgment on its claim against the defendants/third-party plaintiffs, Chalpin Dental Associates, P.C. and John W. Chalpin (collectively, "Chalpin"). Second, Chalpin has moved for entry of default judgment against the third-party defendants, Cieos, Inc. and Ekramul Khan. Khan has filed an opposition to the motion for default judgment. For the reasons that follow, both M&T Bank's motion for summary judgment and Chalpin's motion for default judgment will be denied.

I. Procedural Background

This action was commenced in September 2010 by M&T Bank in Pennsylvania state court. According to M&T Bank's complaint, Chalpin operates a dentistry business in New Hampshire; in the course of that business, Chalpin entered into a financing agreement (called a "lease" by M&T Bank) to purchase equipment from Cieos; M&T Bank, through a chain of assignment and succession-in-interest, is now the payee on the financing agreement; Chalpin has defaulted under the terms of the financing agreement by failing to make any monthly payments since April 2009; and, in the event of default, M&T Bank is entitled to recover the unpaid balance of the financing agreement. M&T Bank seeks to recover $78,339.18, plus interest, costs, and attorneys' fees.

On October 22, 2010, Chalpin removed the suit to the U.S. District Court for the Middle District of Pennsylvania on the basis of diversity jurisdiction. 28 U.S.C. §§ 1441, 1332(a).*fn1 Chalpin then sought a change of venue. According to the memorandum filed in support of this request, the financing agreement that forms the basis for M&T Bank's claim contains a clause requiring the parties to consent to the personal jurisdiction of the federal and state courts of Pennsylvania, but the agreement does not specify any particular forum within Pennsylvania. The only entity in the case with any alleged ties to Pennsylvania-Court Square Leasing Corporation, a predecessor in interest to M&T Bank-was located in the Eastern District of Pennsylvania. On December 2, 2010, Chalpin's motion for a change of venue was granted, and the case was transferred to this court.

Chalpin filed an answer and counterclaims against M&T Bank on December 29, 2010 (Docket No. 4). On January 18, 2011, Chalpin filed a third-party complaint against Cieos (Docket No. 8). The third-party complaint alleges that Cieos had breached a contract with Chalpin to provide software and training with respect to the equipment at issue in M&T Bank's claim-a failure which, in turn, had frustrated the purpose of the financing agreement. (Cieos is the company listed in the financing agreement as providing the dental equipment to Chalpin.) On April 13, 2011, after Cieos failed to file a responsive pleading, Chalpin applied for entry of default and default judgment on the third-party complaint (Docket No. 15). However, on May 10, 2011, I struck the third-party complaint and dismissed the request for default judgment as moot, on the ground that Chalpin had failed to seek leave of the court to file a third-party complaint more than fourteen days after filing an answer (Docket Nos. 16, 17). Fed. R. Civ. P. 14(a)(1).

The following day, May 11, 2011, M&T Bank moved for summary judgment on its claim against Chalpin (Docket No. 18). After an extension of time, Chalpin opposed summary judgment on June 20, 2011 (Docket No. 25).

In the interim, Chalpin also moved for leave to re-file the third-party complaint against Cieos (Docket No. 19). I granted leave on May 24, 2011, and deemed the third-party complaint filed as of that date (Docket Nos. 20, 21). On July 21, 2011, Chalpin moved for leave to file an amended third-party complaint to name an additional third-party defendant, Ekramul Khan, and to plead a claim for fraud against both Khan and Cieos (Docket No. 27). According to the amended third-party complaint, Khan is an officer of Cieos. I granted leave to amend the third-party complaint on September 20, 2011, and the amended third-party complaint was filed on that date (Docket Nos. 32, 33).

On November 5, 2011, Chalpin requested that the Clerk of the Court enter default against Cieos and Khan for failing to file any responsive pleading to the amended third-party complaint (Docket No. 37). Default was entered on November 7, 2011. Chalpin then moved for entry of default judgment against both third-party defendants, on November 8, 2011 (Docket No. 38). Khan submitted an opposition to default judgment on November 15, 2011 (Docket No. 39).*fn2

II. Jurisdiction

The court has subject-matter jurisdiction over M&T Bank's suit against Chalpin, and Chalpin's counterclaims against M&T Bank, because the parties are citizens of different states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). The court has subject-matter jurisdiction over Chalpin's third-party claims against Cieos and Khan because the third-party claims form part of the same case or controversy and thus fall within the court's supplemental jurisdiction. Id. § 1367.

III. Discussion

A. Summary Judgment

M&T Bank seeks summary judgment against Chalpin on the lone count of the complaint, alleging a breach of the financing agreement, in the amount of $94,007.02-a figure representing $78,339.18 in unpaid monthly payments and interest plus $15,667.84 in attorneys' fees, both allegedly due under the terms of the financing agreement.

1. Standard for Granting Summary Judgment

Summary judgment is appropriate when "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) (formerly Rule 56(c)). A genuine dispute as to a material fact exists only if there is evidence in the summary judgment record "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "The inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Somner v. The Vanguard Grp., 461 F.3d 397, 403-04 (3d Cir. 2006) (internal quotation marks omitted). "The evidence of the non- movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 255.

The moving party "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). If the moving party would bear the burden of proof at trial, the non-moving party may defeat summary judgment by "produc[ing] or point[ing] to evidence in the record that creates a genuine issue of material fact." El v. Se. Pa. Transp. Auth., 479 F.3d 232, 238 (3d Cir.2007). "Put another way, it is inappropriate to grant summary judgment in favor of a moving party who bears the burden of proof at trial unless a reasonable juror would be compelled to find its way on the facts needed to rule in its favor on the law."

Id. (footnote omitted).

2. Summary Judgment Record

In its motion for summary judgment, M&T Bank relies entirely on the pleadings and three ...

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