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BMO Harris Bank N.A. v. Spencer Transportation LLC

United States District Court, N.D. Alabama, Jasper Division

March 22, 2018

BMO HARRIS BANK, N.A., Plaintiff,
v.
SPENCER TRANSPORTATION LLC, ET AL., Defendants.

          MEMORANDUM OF OPINION

          L. Scott Coogler, United States District Judge.

         Before the Court is Spencer Transportation, LLC (“Spencer”) and Dwayne Haney's (“Haney”) (collectively “Defendants”) Motion to Dismiss for Lack of Subject Matter Jurisdiction. (Doc. 6.) Plaintiff BMO Harris Bank, N.A. (“Plaintiff” or “BMO”), has timely filed a response. (Doc. 8.) For the reasons stated below, Defendants' motion is due to be DENIED.

         I. Background[1]

         This case arises out of an alleged breach of a Contract and Guaranty. On January 9, 2015, Spencer Transportation entered into a Loan and Security Agreement (“the Agreement”) with non-party General Electric Capital Corporation (“GECC”) wherein GECC financed Spencer's purchase of a 2014 Volvo tractor trailer (the “Collateral”). Pursuant to the Agreement, GECC lent Spencer a principal amount of $144, 391.80. Upon GECC financing of the purchase, Spencer began making monthly payments to GECC. To provide additional security to GECC, Haney executed a Continuing Guaranty whereby he agreed to be jointly and severally liable to GECC for Spencer's obligations under the Agreement. GECC perfected its security interest in the Collateral. On December 1, 2015, GE Capital U.S. Holdings, Inc., as a successor in interest to GECC, assigned all of its rights, title and interest in the Agreement to BMO.

         In August of 2016, Spencer defaulted under the Agreement by failing to pay amounts owed. The Agreement contains an acceleration clause and despite demands, Spencer failed to cure the default. In addition, bankruptcy is listed in the Agreement as an event of default, and in January of 2017, Spencer defaulted by filing for bankruptcy under Chapter 11 in the Northern District of Alabama. (See Doc. 1-5.) During the bankruptcy case, Spencer made one adequate protection payment of $2, 835.76. The bankruptcy case was dismissed in October of 2017, without confirming a plan of reorganization.

         In the Complaint, BMO avers that as of December 14, 2017, Spencer is indebted to it under the Agreement in the total amount of $106, 643.74, calculated as follows:

Principal Balance: $85, 898.84
Interest: $21, 131.11
Late Charges: $2, 406.60
Adequate Protection
Payment from bankruptcy
proceeding: ($2, 835.76)
Total: $106, 643.74

         They also averred that “[i]nterest continues to accrue under the Agreement in amount of ...


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