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Wells Fargo Equipment Finance, Inc. v. Inchon LLC

September 10, 2007

WELLS FARGO EQUIPMENT FINANCE, INC., PLAINTIFF,
v.
INCHON LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hochberg, District Judge

OPINION and ORDER

This matter is before the Court on Plaintiff's motion to strike Defendant Inchon LLC's ("Inchon") answer and for entry of default judgment against Defendant Inchon on Counts 1-6 pursuant to Judge Shwartz's Order of June 18, 2007 and Federal Rules of Civil Procedure 12(f) and 55(b)(2). Alternatively, Plaintiff moves for Summary Judgment against Defendant Inchon on Counts 1-6 pursuant to Federal Rule of Civil Procedure 56. Plaintiff also moves for entry of Summary Judgment on Counts 7 and 8 against Defendant Viatcheslav Strekalov*fn1 pursuant to Federal Rule of Civil Procedure 56. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332.

I. Background

This case arises from a Master Lease agreement executed between ACC Capital Corporation ("ACC") and Defendant Inchon on April 12, 2004. Under the terms of the Master Lease, ACC agreed to lease to Inchon equipment identified in two subsequently executed Equipment Schedules. Equipment Schedule No. 1 was executed on April 12, 2004 and amended to reflect a new monthly payment amount on April 24, 2004. (See Motion for Default Judgment and Summary Judgment ("Mot.") Ex. B.) Equipment Schedule No. 2 was executed on June 10, 2004. (Id. Ex. C.) Inchon was required to make thirty-six monthly payments on each Equipment Schedule for the equipment described therein.

On April 15, 2004 Defendant Strekalov apparently signed an unconditional personal guaranty for Defendant Inchon's obligations under the Master Lease and both Equipment Schedules.*fn2 (See Mot. Ex. G) Plaintiff asserts that soon thereafter ACC assigned both Equipment Schedules to Plaintiff Wells Fargo Equipment Finance, Inc. ("Wells Fargo").*fn3

Inchon went into default under the terms of the Master Lease after failing to make monthly payments on either Equipment Schedule beginning with the payments due on September 1, 2005. Wells Fargo notified Inchon of its default, but Inchon failed to cure it. Defendant Strekalov -- guarantor of both Equipment Schedules -- also refused to cure the default. Wells Fargo then commenced the instant action on November 23, 2005.

II. Counts 1-6 against Defendant Inchon

On June 18, 2007 Judge Shwartz granted the motion of Leo L. Grigolia to withdraw as counsel for Defendant Inchon. Because it is well settled that a corporate defendant must be represented by counsel, see, e.g., Simbraw, Inc. v. U.S., 367 F.2d 373, 373 (3d Cir. 1966) (holding that a corporate litigant must be represented by counsel); Mazzoni v. U.S., 2006 WL 1564020, at *1 (E.D. Pa. April 17, 2006), Judge Shwartz ordered Defendant Inchon to have counsel enter an appearance on its behalf by July 12, 2007, or Plaintiff would be granted leave to file a motion to strike Defendant Inchon's Answer and for the entry of default and default judgment. As of September 10, 2007, Defendant Inchon has failed to procure counsel to appear on its behalf.

Plaintiff filed the instant motion for default judgment against Defendant Inchon on August 17, 2006 and served a copy of the motion to Defendants on the same day. Plaintiff's motion, together with Judge Shwartz's order of June 18, 2007, is sufficient to put Defendant Inchon on notice of the application for entry of default judgment. See Fed. R. Civ. P. 55(b)(2) ("If the party against whom judgment by default is sought has appeared in the action, the party shall be served with written notice of the application for judgment at least three days prior to the hearing on such application.").

Defendant Inchon has failed to timely oppose Plaintiff's Motion for Default Judgment. Defendant Inchon has not disputed the claim that it is in default according to the terms of Master Lease paragraph 15(a). (See Mot. Ex. A.) Defendant Inchon has not disputed its liability under Master Lease paragraph 16(e) for "all sums due and payable under the Equipment Schedule[s] for all periods up to and including the date on which [Plaintiff] has declared this Agreement to be in default...." (Id.) Defendant Inchon has not disputed that under Master Lease paragraph 16(g) Plaintiff "may sue for and recover all Monthly Rental, rents and other payments that accrue after the occurrence of the Event of Default, as the same become due." (Id.) Finally, Defendant Inchon has not disputed that under Master Lease paragraph 19(k) Defendant Inchon "shall reimburse [Plaintiff] for all charges, costs, expenses and attorneys' fees incurred by [Plaintiff]...in the execution, delivery, administration, amendment and enforcement of the Lease or the collection of any rent or other payments due under the Lease...." (Id.)

Because Defendant Inchon has not complied with Judge Shwartz's June 18, 2007 order, Defendant Inchon's answer will be stricken pursuant to Federal Rule of Civil Procedure 12(f). The Court will also order the Clerk of Court to enter default against Defendant Inchon on Counts 1-6 pursuant to Federal Rule of Civil Procedure 55(a).

III. Counts 7 and 8 Against Defendant Strekalov

Defendant Strekalov appears pro se and has submitted a one-page letter docketed August 28, 2007 and a two-page letter docketed September 6, 2007 in opposition to Plaintiff's motion for summary judgment against him. Summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Importantly, however, "[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e).

With respect to pro se litigants, "the[se] same standards for summary judgment still apply...." Williams v. Lane, No. 01-CV-03396, 2007 WL 756731, at *3 (E.D. Pa. March 8, 2007). Nevertheless, a court may wish to "giv[e] a pro selitigant every opportunity to functionally respond in some meaningful way to a summary judgment motion...." Id.; see also Tabron v. Grace, 6 F.3d 147, 153 (3rd Cir. 1993) ("we have traditionally given pro se litigants greater leeway where they have not followed the technical rules of pleading and procedure"). In general, a "district court [should] take care to insure that...a pro se litigant, is 'provided with proper notice regarding the complex procedural issues involved in summary judgment proceedings.'" Adams v. Dyer, 223 F. App'x 757, 764 (10th Cir. 2007) (citing Hall v. Bellmon, 935 F.2d 1106, 1111 (10th Cir.1991) and Roseboro v. Garrison, 528 F.2d 309, 310 (4th Cir. 1975) (per curiam)); see also Richardson v. Powel, 166 F. App'x. 700, 702 (4th Cir. 2006) ("Roseboro prohibits the entry of summary judgment based on a pro se party's failure to submit affidavits supporting her allegations unless such party is given a reasonable opportunity to file counter-affidavits or other ...


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