United States District Court, D. South Carolina, Charleston Division
CNH INDUSTRIAL CAPITAL AMERICA, LLC f/k/a CNH CAPITAL AMERICA, LLC, Plaintiff,
ABLE CONTRACTING, INC. and CHANDLER M. LLOYD, Defendants.
ORDER AND OPINION
RICHARD MARK GERGEL UNITED STATES DISTRICT COURT JUDGE.
matter is before the Court on Plaintiff CNH Capital
Industrial America, LLC's f/k/a CNH Capital America, LLC
("CNH"), motion for judgment on the pleadings under
Rule 12(c) of the Federal Rules of Civil Procedure and for
summary judgment under Rule 56. (Dkt. Nos. 57, 58.) For the
reasons set forth below, the motion for judgment on the
pleadings is granted and the motion for summary judgment is
granted as to liability only.
Background and Relevant Facts
Plaintiff CNH is a Delaware limited liability company with
its principal place of business in Wisconsin. Defendant Able
Contracting, Inc. ("Able") is a South Carolina
corporation that does business in Ridgeland, South Carolina.
Defendant Chandler Lloyd is the President of Able. Former
third-party defendant G, J & L Inc. d/b/a/ Border
Equipment ("Border") is a dealer in heavy machinery
The Retail Installment Sales Contracts
dispute arises out of Border's sale to Able of several
pieces of heavy construction machinery (including excavators,
a wheel loader, and a tractor) in 2013 and 2014. Those sales
were executed pursuant to three retail installment sales
contracts ("RISCs"). The First RISC was executed on
or about October 25, 2013 for Abie's purchase of a new
Case Excavator. (Dkt. No. 1-1.) Defendant Lloyd, the
President of Able, executed a Personal Guaranty with Border
to guarantee payment under the First RISC. (Dkt. No. 1-1 at
5.) The Second RISC was executed on or about November 19,
2013 for Abie's purchase of a Case Wheel Loader, a Case
Excavator, a used John Deere tractor, and several attachments
for larger pieces of equipment (for example, the bucket that
attaches to the end of an excavator). (Dkt. No. 1-5.) The
Third RISC was executed on or about September 28, 2014 for
Abie's purchase of a new Case Excavator. (Dkt. No. 1-9.)
the exception of price and equipment covered, the RISCs
contain the same general terms and grant Border and any
contractual assignees a "first priority purchase money
security interest" in the piece(s) of equipment covered
by the contracts.
Assignment to CNH
the RISCs includes a provision assigning the contract to CNH.
(Dkt. No. 1 at 3, 5, 8.) The RISCs specify that upon
assignment "all rights and benefits but no obligations
(if any) of Seller" are transferred to CNH; that Able
"will not assert against Assignee any claim or defense
which [Able] may have against Seller, the manufacturer of the
equipment, or any other person"; and that the equipment
is sold "as is and with all faults" and
"seller and manufacturer make no other representation or
warranty, express or implied, and specifically disclaim the
implied warranties of merchantability and fitness for
particular purposes." (Dkt. No. 1-1 at 3.)
Alleged Default and Breach
RISCs indicate that a default occurs when the "Buyer
fails to pay when due any of the Obligations." (Dkt. No.
1-1 at 4.) Upon default, the seller or assignee can, among
other things, "declare all obligations immediately
due" and "sell ... all Collateral at public or
private sale." (Dkt. No. 1-1 at 4.) CNH alleges that
Able defaulted when it failed to make required payments under
all three RISCs. (Dkt. No. 1 at 3, 6, 9.) Able does not
dispute that it stopped making payments under the three RISCs
shortly before restoring possession to CNH of all of the
equipment except for the John Deere tractor covered by the
November 19, 2014 RISC. (Dkt. No. 1 at 3, 6, 9; Dkt. No. 59
at 3.) Able claims it is not responsible for any additional
payments because it revoked acceptance by returning the
equipment to CNH. (Dkt. No. 18 at 22.) CNH claims Abel's
return of equipment was "voluntary repossession."
(Dkt. No. 18 at 13)
filed this lawsuit in July 2016 alleging that Able is in
default under all three RISCs for failure to pay and that
Lloyd had breached his Personal Guaranty by failing to pay
the balance on the first RISC. (Dkt. No. 1.) CNH claims that
Able must return the John Deere Tractor and owes $93, 017.89
under the first RISC, $209, 772.38 under the second RISC, and
$178, 590.48 under the third RISC. (Dkt. No. 1 at 3, 6, 9.)
CNH also claims it is entitled to interest on the balance of
the RISCs and attorney's fees and costs. CNH claims
Defendant Lloyd is also responsible under the Personal
Guaranty for the remaining balance on the first RISC of $93,
017.89. CNH acknowledges that it had a duty to mitigate
damages and claims it has taken steps to sell the repossessed
equipment in private sales. (Dkt. No. 1 at 4, 6, 9).
moved for summary judgment based on Abie's failure to
comply with the terms of the RISCs and Lloyd's failure to
perform under the Personal Guaranty. (Dkt. No. 58.) Able and
Lloyd have asserted several counterclaims. (Dkt. No. 18.) CNH
has moved for judgment on the pleadings on Defendants'
counterclaims. (Dkt. No. 57.)
Legal Standard A. Judgment on the
12(c) motion for judgment on the pleadings is assessed by
"applying the same standard ... as motions made pursuant
to Rule 12(b)(6)." Burbach Broad. Co. of Delaware v.
Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir. 2002)
(citing Edwards v. City of Goldsboro, 178 F.3d 231,
243 (4th Cir. 1999)). Rule 12(b)(6) permits the dismissal of
an action if the complaint fails "to state a claim upon
which relief can be granted." Fed.R.Civ.P. 12(b)(6).
Such a motion tests the legal sufficiency of the complaint
and "does not resolve contests surrounding the facts,
the merits of the claim, or the applicability of defenses. .
. . Our inquiry then is limited to whether the allegations
constitute 'a short and plain statement of the claim
showing that the pleader is entitled to relief"
Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992) (citation omitted). In a Rule 12(b)(6)
motion, the Court is obligated to "assume the truth of
all facts alleged in the complaint and the existence of any
fact that can be proved, consistent with the complaint's
allegations." E. Shore Mkts., Inc. v. J.D. Assocs.
Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000).
However, while the Court must accept the facts in a light
most favorable to the non-moving party, it "need not
accept as true unwarranted inferences, unreasonable
conclusions, or arguments." Id.
survive a motion to dismiss, the complaint must state
"enough facts to state a claim to relief that is
plausible on its face." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Although the
requirement of plausibility does not impose a probability
requirement at this stage, the complaint must show more than
a "sheer possibility that a defendant has acted
unlawfully." Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A complaint has "facial plausibility"
where the pleading "allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Id.
prevail on a motion for summary judgment, the movant must
demonstrate that there is no genuine issue of any material
fact and that the movant is entitled to judgment as a matter
of law. Fed.R.Civ.P. 56(a). The party seeking summary
judgment has the burden of identifying the portions of the
"pleadings, depositions, answers to interrogatories, any
admissions on file, together with the affidavits, if any,
which show there is no genuine issue as to any material fact
that the moving party is entitled to judgment as a matter of
law." Celotex Corp. v. Catrett, 411 U.S. 317,
322 (1986). The Court will construe all inferences and
ambiguities against the movant and in favor of the non-moving
party. U.S. v. Diebold, Inc., 369 U.S. 654, 655
(1962). The existence of a mere scintilla of evidence in
support of the non-moving party's position is
insufficient to withstand a motion for summary judgment.
Anderson v. Liberty Lobby, Inc., 447 U.S. 242, 252
(1986). However, an issue of material fact is genuine if the
evidence is such that a reasonable jury could return a
verdict in favor of the non-movant. Id. at 257.
the moving party has carried its burden under Rule 56(c), its
opponent must do more than simply show that there is some
metaphysical doubt as to the material facts."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 (1986). "In the language of the Rule,
the nonmoving party must come forward with 'specific
facts showing that there is a genuine issue for
trial.'" Id. at 587. "Where the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no 'genuine issue