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Frenkel v. Baker

United States District Court, E.D. Pennsylvania

April 14, 2015

LEON FRENKEL, Plaintiff,
v.
KENNETH H. BAKER, et al., Defendants.

MEMORANDUM

BERLE M. SCHILLER, District Judge.

Plaintiff Leon Frenkel moves for summary judgment on two counts of breach of contract against Defendant Kenneth Baker. For the following reasons, the Court grants Plaintiff's motion for summary judgment on these two counts. The Court further grants Plaintiff's request for a final judgment on these counts under Federal Rule of Civil Procedure 54(b).

I. BACKGROUND

Frenkel's First Amended Complaint (FAC) asserted twenty counts against thirteen Defendants in connection with two distinct RICO schemes. This Court eventually granted default judgment on most counts against most Defendants. Frenkel v. Baker, Civ. A. No. 13-5880, 2014 WL 5697449 (E.D. Pa. Nov. 4, 2014). Although he did so belatedly, Baker was one of the few Defendants to appear in the case and this Court denied Frenkel's request for default judgment against Baker in part for that reason. Id. at *11-12.

The FAC alleges two broad, overlapping conspiracies involving the fraudulent international purchase and sale of sugar, as outlined in this Court's prior opinion. Id. Frenkel's summary judgment, however, pertains only to Counts VI and XIV. Count VI asserts that Baker and another Defendant, Baker Enterprises, breached a contract that promised to return to Frenkel a $250, 000 deposit. Frenkel refers to this contract as the "SBLC Note" and the deposit as the "Frenkel Funds." Frenkel attached the SBLC Note to the FAC. (FAC Ex. H.) Count XIV asserts that Baker and Baker Enterprises breached another contract that promised to return to Frenkel a different $250, 000 deposit. This contract is known as the "Sugar Note" and the deposit is the "Sugar Deposit." Frenkel attached the Sugar Note to the FAC. (Id. Ex. V.)

Baker does not dispute that Frenkel paid both the Frenkel Funds and the Sugar Deposit. Baker also does not dispute that neither the Frenkel Funds nor the Sugar Deposit have been returned to Frenkel. Baker admits that he signed the SBLC Note jointly and severally with Baker Enterprises. (Am. Answer and Affirmative Defenses of Kenneth Baker [Am. Answer] ¶ 41.) Baker also admits that he signed the Sugar Note, but denies that it was joint and several with Baker Enterprises. (Id. ¶ 95.) Baker admits that he made many subsequent promises to Frenkel after signing the notes that Baker would repay the Frenkel Funds and the Sugar Deposit, as well as interest and attorneys' fees. (Id. ¶ 104.) Baker denies that he ever received actual money from the Frenkel Funds or the Sugar Deposit, but does not dispute that Frenkel paid both deposits to mutually agreed-upon escrow agents. (Aff. of Def. Kenneth Baker, in Support of Denial of Pl.'s Renewed Mot. for Summ. J. [Baker Aff.] ¶ 38.) As defenses, Baker asserts the doctrines of unclean hands and equitable estoppel. (Def. Kenneth Baker's Mem. in Opp'n to Pl.'s Am. Mot. for Summ. J. [Def.'s Mem.], at 8-13.)

II. STANDARD OF REVIEW

Summary judgment is appropriate when the admissible evidence fails to demonstrate a genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). When the moving party bears the burden of persuasion at trial, it must identify evidence in the record establishing the absence of a genuine factual issue. Nat'l State Bank v. Fed. Reserve Bank, 979 F.2d 1579, 1582 (3d Cir. 1992).

In reviewing the record, "a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor." Shuman ex rel. Shertzer v. Penn Manor Sch. Dist., 422 F.3d 141, 146 (3d Cir. 2005). The court may not, however, make credibility determinations or weigh the evidence in considering motions for summary judgment. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Goodman v. Pa. Tpk. Comm'n, 293 F.3d 655, 655 (3d Cir. 2002).

III. DISCUSSION

A. Breach of Contract

In Pennsylvania, a plaintiff asserting breach of contract must show: "(1) the existence of a contract, including its essential terms, (2) a breach of duty imposed by the contract, and (3) resultant damages." McShea v. City of Phila., 995 A.2d 334, 340 (Pa. 2010) (internal citation omitted).

Defendant asserts unclean hands and equitable estoppel as defenses. Unclean hands may apply where "(1) a party seeking equitable relief; (2) is guilty of conduct involving fraud, deceit, unconscionability, or bad faith; (3) directly related to the matter in issue; (4) that injures the other party; and (5) affects the balance of equities between the litigants." In re New Valley Corp., 181 F.3d 517, 522-23 (3d Cir. 1999). Equitable estoppel requires proof of "(1) a misrepresentation by another party; (2) which [Defendant] reasonably relied upon; (3) to [Defendant's] detriment." United States v. Asmar, 827 F.2d 907, 912 (3d Cir. 1987).

Frenkel is entitled to summary judgment for his claims of breach of contract in Counts VI and XIV. Baker does not dispute the existence of the promissory notes, which Webster attached to the Complaint, or the notes' essential terms. Baker does not dispute that he signed the notes. He also does not dispute that Frenkel has not been paid the $250, 000 plus interest and fees which are due ...


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