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March 10, 1993

UNITED STATES OF AMERICA, On behalf of its Agency, the Small Business Administration, Plaintiff,


The opinion of the court was delivered by: HAROLD A. ACKERMAN

ACKERMAN, District Judge:

 This matter comes before the court on motions by plaintiff, the Small Business Administration ("SBA"), and defendants, Carol DelGuercio and Anthony Lisanti ("defendants" or "guarantors") for summary judgment pursuant to Federal Rule of Civil Procedure 56. The SBA is seeking to enforce the terms of a guaranty agreement executed by the defendants. For the reasons discussed below, I now grant plaintiff's motion for summary judgment and deny defendants' cross-motion for summary judgment.


 On December 8, 1982 the Northeastern Bank of Pennsylvania ("Northeastern") extended a Three Hundred and Fifty Thousand Dollar ($ 350,000) loan to Family Restaurant Concepts, Inc. ("Family Restaurant"), as evidenced by a promissory note. In the Guaranty Agreement, the defendants, Anthony Lisanti as President of Family Restaurant and Carol Ann DelGuercio as secretary of Family Restaurant, personally signed and guaranteed the note. The Wilkes-Barre, Pennsylvania branch office of the SBA authorized Northeastern's disbursement of the loan. As further security for the loan, defendant Carol DelGuercio executed a mortgage encumbering certain real estate located in Pike County, Pennsylvania. The defendants used the loan for the purchase of business equipment, machinery, and leasehold improvements for a restaurant in Kingston, Pennsylvania.

 The loan agreement provided for an immediate monthly payment schedule. Family Restaurant made its monthly payments up until June 8, 1984, and since then it has tendered no further payments. On June 29, 1984, Family Restaurant filed a Chapter 11 petition for bankruptcy in the U.S. Bankruptcy Court for the Middle District of Pennsylvania.

 On September 4, 1984, the Northeastern assigned the note, guaranty, and mortgage to the SBA. The SBA sent a number of letters dated August 31, 1984, January 4, 1985, January 23, 1985 and April 14, 1989, *fn1" all of which notified the guarantors of Family Restaurant's default and, pursuant to the guaranty, accelerated the payment schedule of the note by demanding immediate payment of the outstanding debt. *fn2"

 On January 9, 1985, when the defendants still had not paid, the SBA seized the equipment, machinery, furniture, fixtures, and inventory of Family Restaurant. The SBA then sold these assets at public sale on March 6, 1985. *fn3" From the net proceeds of the sale, the SBA credited Sixty-Three Thousand Four Hundred and Ninety-Five Dollars and Fourteen Cents ($ 63,495.14) to the Family Restaurant note. The SBA now seeks a judgement against the defendants for the remaining amount due in accordance with the terms of the guaranty agreement. The defendants oppose this motion.


 Summary judgment may be granted only if the pleadings, supporting papers, affidavits, and admissions on file, when viewed will all inferences in favor of the nonmoving party, demonstrate that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. See Todaro v. Bowman, 872 F.2d 43, 46 (3rd Cir. 1989); Chippolini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3rd Cir.), cert. dism'd, 483 U.S. 1052 (1987). Put differently, "summary judgment may be granted if the movant shows that there exists no genuine issues of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hospital, 843 F.2d 139, 143 (3rd Cir. 1988), cert. denied, 488 U.S. 870, 102 L. Ed. 2d 147, 109 S. Ct. 178 (1988). An issue is "genuine" if a reasonable jury could possibly hold in the nonmovant's favor with regard to that issue. See Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). A fact is material if it influences the outcome under the governing law. Id. at 248.

 Within the framework set out above, the moving party essentially bears two burdens: First, there is the burden of production, of making a prima facie showing that it is entitled to summary judgment. This may be done by either demonstrating there is no genuine issue of fact and that as a matter of law, the moving party must prevail or by demonstrating the nonmoving party has not shown facts relating to an essential element of the issue for which it bears the burden. Once either showing is made, this burden shifts to the nonmoving party who must demonstrate facts supporting each element for which it bears the burden as well as establish the existence of genuine issues of material fact. Second, there is the burden of persuasion. This burden is a stringent one which always remains with the moving party. If there remains any doubt as to whether a trial is necessary, summary judgment should not be granted. See Celotex Corp. v. Catrett, 477 U.S. 317, 330-33, 91 L. Ed. 2d 265, 106 S. Ct. 2548 ; Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-61, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970); Advisory committee's Notes on Fed. Rule of Civ. Pro. 56(e), 1963 Amendment; see generally C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2727 (2nd ed. 1983).


 To be entitled to a judgment on a guaranty, a plaintiff must demonstrate:

 1) execution of the guarantee by the guarantor (i.e., that it was the defendant who ...

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