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Inc. v. Incnetworks Inc.

United States District Court, D. New Jersey

February 6, 2014

44A TRUMP INTERNATIONAL, INC., Plaintiff,
v.
INCNETWORKS INC. Defendant, and ERIC MAGNELLI, ESQ., as escrow agent.

OPINION

SUSAN D. WIGENTON, District Judge.

Before the Court is plaintiff 44A Trump International, Inc.'s ("Plaintiff" or "44A Trump") motion for summary judgment ("Motion") regarding its complaint against defendant IncNetworks INC. ("Defendant").[1]

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(2). Venue is proper in this District under 28 U.S.C. § 1391(b).

This Court, having considered the parties' submissions, decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78.

For the reasons set forth below, this Court GRANTS Plaintiff's Motion.

FACTUAL HISTORY

On or about August 9, 2001, Plaintiff alleges it loaned Jesse R. Russell ("Russell") the sum of $560, 000.00 ("Loan"). (Compl. ¶ 10.) The Loan had a maturity date of August 15, 2002. ( Id . at ¶ 11.) On or about August 9, 2001, Russell executed a Loan Security Agreement. ( Id . at ¶ 12; Compl. Ex. A.) Russell secured the Loan by pledging 560, 000 shares of common stock owned by Russell and issued by the Defendant as collateral. ( Id .) Russell failed to make any payments under the Loan Security Agreement and on or about July 24, 2007, Plaintiff commenced litigation, in federal court, against Russell for failure to make payments on the Loan. (Compl. Ex. B ¶ 1.)

To resolve the 2007 action, Plaintiff and Defendant entered into three agreements: (a) a Promissory Note ("Note") executed on or about November 1, 2009 with Defendant as Maker agreeing to pay Plaintiff the $560, 000 in thirty consecutive monthly payments of $20, 000 and interest running six percent per annum; (b) a Pledge Agreement executed on or about November 1, 2009 with Defendant as Issuer and Plaintiff as Pledgee, which secured Defendant's obligations under the Note (specifically that Defendant would purchase 560, 000 shares of stock from Plaintiff) ("Pledged Stock"); and (c) an Escrow Agreement executed on or about November 1, 2009, where the Escrow Agent would hold the Pledge Agreement, Pledged Stock and other collateral in escrow ("Escrow Deposit"). ( See Compl. ¶ 16; Compl. Ex. C-E.) The Note outlined that the principal and interest:

[S]hall be due and payable on the first day of each month, commencing November 1, 2009, in thirty (30) equal consecutive monthly payments of principal and interest equal to $20, 000, and the principal hereof, if not sooner paid as provided herein, together with all accrued and unpaid interest, shall be due and payable on May 1, 2012.

(Pl. Br. at 3; Compl. Ex. C, at 1.)

Defendant made initial payments through June 2, 2010, but failed to make any payment for July 2010. (Compl. ¶ 19; See Pl. Br. at 3.) Pursuant to the terms of the Note, Defendant had ten days from the date payment was due to cure its failure. ( See Compl. Ex. C, at 1.) Defendant did not make the required payment by July 10, 2010. (Pl. Br. at 3.) According to the terms of the Note, in the event of a default, Plaintiff may declare the entire remaining principal, with accrued interest, immediately due. ( See Compl. Ex. C, at 2.) In addition, the Note indicates that there is a default rate of 12% per annum. (Compl. ¶ 18; Compl. Ex. C, at 2.) As such, Plaintiff asserts the outstanding principal, together with accrued interest, was due as of, at least, July 12, 2010. (Compl. ¶ 20.) Defendant made certain post-default payments after July 10, 2010. ( See Pl. Br. at 4.) However, there have been no payments made since December 16, 2010. ( Id .) Plaintiff contends that as of August 1, 2013, Defendant owes $447, 849.31, which is the total amount of the unpaid principal plus accrued interest. ( Id . at 5.)

On April 17, 2012, Plaintiff filed the instant complaint with this Court seeking a money judgment including, but not limited to, $421, 000 ("Complaint"). (Compl. ¶ 1.)

LEGAL STANDARD

Summary judgment shall be granted "if 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). A factual dispute is genuine if a reasonable jury could return a verdict for the nonmovant, and it is material if, under the substantive law, it would affect the outcome of the suit. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, ...


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