United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
Kenneth M. Hoyt, United States District Judge.
the Court is the plaintiff's, Equus Total Return. Inc.
(Equus) motion for summary judgment (Dkt. No. 18), the
defendant's, Michael May response (Dkt. No. 20), and
Equus' reply (Dkt. No. 22). After reviewing the record,
the Court finds that Equus' motion for summary judgment
should be GRANTED.
plaintiff, Equus, is a Delaware corporation with its
principal place of business in Houston, Texas. The defendant,
Michael May, is a resident of Massachusetts and the president
of 5th Element Tracking, LLC (5th
Element). On January 6, 2015, Equus as lender and
5thElement as borrower, entered into a promissory
note, whereby 5th Element promised to pay Equus
$914, 509.00 for the purchase of a company. Equus describes
the transaction as a seller-financed loan for the purchase of
securities. On the same day, Equus and May executed a
guaranty agreement. Equus agreed to extend credit and
financial accommodations to 5th Element on the
condition that May make full and timely repayment of the
promissory note if 5th Element failed to do so.
January 6, 2016, the promissory note became due. Equus
asserts that the borrower, 5th Element failed to
pay the note. Equus explains that on four occasions it agreed
to extend the maturity date of the note. Ultimately, on
May 14, 2018, 5th Element failed to pay the note
after the final extension due date. On August 13, 2018, Equus
notified May of 5th Element's default and made
demand for payment under the guaranty he signed. May failed
to pay. On November 8, 2018, the plaintiff filed suit against
May alleging default and breach of contract. Equus now moves
for summary judgment contending that there is no genuine
issue as to any material fact regarding liability.
of the Federal Rules of Civil Procedure authorizes summary
judgment against a party who fails to make a sufficient
showing of the existence of an element essential to the
party's case and on which that party bears the burden at
trial. See Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986); Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (en banc). The movant bears the
initial burden of “informing the district court of the
basis for its motion” and identifying those portions of
the record “which it believes demonstrate the absence
of a genuine issue of material fact.” Celotex,
477 U.S. at 323; see also Martinez v. Schlumber,
Ltd., 338 F.3d 407, 411 (5th Cir. 2003). Summary
judgment is appropriate where “the pleadings, the
discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as
a matter of law.” Fed.R.Civ.P. 56(c).
movant meets its burden, the burden then shifts to the
nonmovant to “go beyond the pleadings and designate
specific facts showing that there is a genuine issue for
trial.” Stults v. Conoco, Inc., 76 F.3d 651,
656 (5th Cir. 1996) (citing Tubacex, Inc. v. M/V
Risan, 45 F.3d 951, 954 (5th Cir. 1995);
Little, 37 F.3d at 1075). “To meet this
burden, the nonmovant must ‘identify specific evidence
in the record and articulate the ‘precise manner'
in which that evidence support[s] [its] claim[s].'”
Stults, 76 F.3d at 656 (citing Forsyth v.
Barr, 19 F.3d 1527, 1537 (5th Cir.), cert.
denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127
(1994)). It may not satisfy its burden “with some
metaphysical doubt as to the material facts, by conclusory
allegations, by unsubstantiated assertions, or by only a
scintilla of evidence.” Little, 37 F.3d at
1075 (internal quotation marks and citations omitted).
Instead, it “must set forth specific facts showing the
existence of a ‘genuine' issue concerning every
essential component of its case.” Am. Eagle
Airlines, Inc. v. Air Line Pilots Ass'n, Intern.,
343 F.3d 401, 405 (5th Cir. 2003) (citing Morris v. Covan
World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.
fact is material only if its resolution would affect the
outcome of the action, . . . and an issue is genuine only
‘if the evidence is sufficient for a reasonable jury to
return a verdict for the [nonmovant].'” Wiley
v. State Farm Fire and Cas. Co., 585 F.3d 206, 210 (5th
Cir. 2009) (internal citations omitted). When determining
whether a genuine issue of material fact has been
established, a reviewing court is required to construe
“all facts and inferences . . . in the light most
favorable to the [nonmovant].” Boudreaux v. Swift
Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005)
(citing Armstrong v. Am. Home Shield Corp., 333 F.3d
566, 568 (5th Cir. 2003)). Likewise, all “factual
controversies [are to be resolved] in favor of the
[nonmovant], but only where there is an actual controversy,
that is, when both parties have submitted evidence of
contradictory facts.” Boudreaux, 402 F.3d at
540 (citing Little, 37 F.3d at 1075 (emphasis
omitted)). Nonetheless, a reviewing court is not permitted to
“weigh the evidence or evaluate the credibility of
witnesses.” Boudreaux, 402 F.3d at 540
(quoting Morris, 144 F.3d at 380). Thus,
“[t]he appropriate inquiry [on summary judgment] is
‘whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of
law.'” Septimus v. Univ. of Hous., 399
F.3d 601, 609 (5th Cir. 2005) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 251 - 52 (1986)).
ANALYSIS AND DISCUSSION
that there is no issue as to any material fact regarding
liability in this matter, Equus moves for summary judgment.
Equus maintains that this is a simple collection action.
Equus explains that it entered into a promissory note with
5th Element, whereby, Equus agreed to loan
5th Element funds and 5th Element
agreed to repay the loan. Equus failed to pay the promissory
note when it became due. Then, Equus sought payment from May,
the guarantor of the note. Subsequently, he failed to pay
under the guaranty. Therefore, Equus claims that it has
suffered damages and is entitled to a judgment against May in
the amount of $1, 645, 459.45.
argues that Equus never loaned any funds to 5th
Element. He adds that 5th Element never received
any advances from Equus. He further contends that the note
and guaranty are unenforceable and asserts the affirmative
defenses of conditional delivery of the note, and fraudulent