United States District Court, E.D. Pennsylvania
JOEL H. SLOMSKY, District Judge.
Before the Court is Plaintiff De Lage Landen Financial Services, Inc.'s Motion for Judgment on the Pleadings only with respect to Defendant Jeffrey Rubin. (Doc. No. 6). Rubin is a dentist and the sole owner of Defendant Picasso Aesthetic and Cosmetic Dental Spa, P.A. ("Picasso"). (Doc. No. 1 ¶¶ 2-3.) Plaintiff's claims against Rubin are asserted in Counts II, IV, and V of the Complaint. For reasons that follow, the Motion will be granted and Judgment will be entered against Rubin on Counts II, IV, and V.
Plaintiff is a corporation organized under the laws of the State of Michigan with a principal place of business in Chester County, Pennsylvania. (Doc. No. 1 ¶ 1.) Defendant Rubin is an adult individual residing in Fort Meyers, Florida. (Id. ¶ 3.) Rubin is the sole owner of Picasso, a professional corporation formed under the laws of the State of North Carolina with a principal place of business in Naples, Florida. (Id. ¶¶ 2, 3.) Picasso is also a named Defendant in this case.
On March 1, 2010, Plaintiff and Picasso executed a Loan Agreement under which Plaintiff agreed to lend Picasso $25, 000 for working capital and in return Picasso agreed to repay Plaintiff with sixty monthly payments of $520.41, plus interest and applicable sales tax. (Id. ¶¶ 17-20; Ex. E.) In connection with the Loan Agreement, Rubin executed a Personal Guaranty "absolutely and unconditionally guarantee[ing]" all payments under the Loan Agreement. (Id. ¶ 22; Ex. G.)
On March 25, 2010, Plaintiff and Picasso entered into a Finance Agreement under which Plaintiff delivered to Picasso one E4D CAD/CAM Complete System (the "Equipment") and Picasso agreed to make sixty monthly payments of $2, 886.12, plus interest and applicable sales tax, to Plaintiff. (Id. ¶¶ 7-9, Ex. A.) The Finance Agreement contains a Personal Guaranty signed by Rubin, which states as follows: "To induce [Plaintiff] to enter this Finance Agreement, the undersigned unconditionally guarantees the prompt payment of [Picasso's] obligations under the Agreement." (Id. ¶ 11, Ex. A.)
Under both the Loan and Finance Agreements, Picasso is considered in default when it fails to make required timely payments, and such default goes uncorrected for five days. (Id. at Exs. A ¶ 6(a), E ¶ 6(a).) According to the terms of the Agreements, upon default the balance of all unpaid payments for the full term, discounted at 3%, are immediately due and payable together with all past sums due, post-default interest at the rate of 18%, and attorney fees and costs. (Id. at Exs. A ¶ 7, E ¶ 7.) In addition, both Agreements provide that in the event of default Plaintiff may take possession of the Equipment and "sell, lease or otherwise dispose of [the Equipment] at a private or public sale... [and] [i]n the event [Plaintiff] disposes of the [Equipment], [Plaintiff] shall give [Defendants] credit for any sums received by [Plaintiff] from such disposal after deduction of the expenses of the disposition." (Id.)
Beginning in October 2013, Picasso failed to make payments when due under both the Loan and Finance Agreements. (Id. ¶¶ 13, 24.) On February 12, 2014, Ken Jones, a Litigation/Bankruptcy Specialist employed by Plaintiff, sent Rubin an e-mail informing him that Picasso had defaulted on both the Loan and Finance Agreements for failure to make payments when due, and that "[i]f appropriate arrangements are not made to resolve the default within 10 days [Plaintiff] will be accelerating the remaining balance on the contracts and forwarding to outside counsel to enforce the remedies with respect to the default, including litigation." (Doc. No. 5 at 9.)
Later that day, Rubin sent Jones a reply e-mail stating that he had been making payments since a year ago, "with a lag, " directly to a person named John Dougherty, who apparently was one of Plaintiff's employees. (Id.) In the e-mail, Rubin claimed that Dougherty had failed to process two of his payments. (Id.) Rubin concluded the e-mail by stating that he would make another payment by the upcoming Friday, that he was unable to pay off the entire balance due at that time, and that if Plaintiff needed to initiate legal action "then you will have to do what you have to do but I have been dealing with Mr. Dougherty for several months now." (Id.) Jones replied to Rubin's e-mail later that day, stating that Dougherty was no longer handling the account and that one payment per month would not cure the default. (Id. at 8.) Jones closed his e-mail by reiterating his invitation to Rubin to make appropriate arrangements to cure the default within ten days. (Id.)
On February 18, 2014, having not heard back from Rubin regarding arrangements to cure the default, Jones sent Rubin an e-mail requesting an update. (Id.) On March 6, 2014, Rubin sent a reply e-mail that stated as follows:
After consulting with my attorney since you have harassed me into an ultimatum of not continuing my monthly payments as I was doing religiously, and because Mr. Dougherty actually made 2 times a mistake by not putting the payment I made by phoine [sic] correctly, she has advised me to advise you that we would like to surrender the equipment because there is no way we can make up the deficit at this time like I already noted.
(Id. at 7-8.) Later that day, Jones sent Rubin an e-mail informing him that Plaintiff's asset management department would contact him to arrange the surrender and repossession of the Equipment as requested. (Id. at 7.) Thereafter, the Equipment was repossessed. (Id. at 3.) On March 6, 2014, Jones sent letters to Picasso and Rubin notifying them that the Equipment would be sold at a private sale to be held sometime after March 15, 2014, that they "are entitled to an accounting of the unpaid indebtedness secured by the property that is intended to be sold, " and that they "may request an accounting by contacting [him] at the number [provided]." (Id. at 5-6.)
On April 16, 2014, Plaintiff's counsel again sent letters to Picasso and Rubin notifying them of the defaults under the Loan and Finance Agreements and demanding payment of the amounts due under both agreements. (Doc. No. 1, Exs. C, D, H, I.) In view of Rubin's long-time failure to cure the default, on April 17, 2014 Plaintiff filed the Complaint against Picasso and Rubin in this Court. (Doc. No. 1.) Plaintiff made the following claims in the Complaint: Count I-Breach of the Finance Agreement against Picasso; Count II-Breach of the Finance Agreement Guarantees against Picasso and Rubin; Count III-Breach of the Loan Agreement against Picasso; Count IV-Breach of the Loan Agreement Guarantees against Picasso and Rubin; and Count V-Unjust Enrichment against Picasso and Rubin. (Id. ...