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DCHG Investments LLC v. IAC Greenville LLC

United States District Court, D. South Carolina, Greenville Division

May 2, 2018

DCHG Investments LLC, Plaintiff,
IAC Greenville LLC and International Automotive Components Group North America Inc., Defendants, IAC Greenville LLC, Third-Party Plaintiff,
John W. Dickens and THD Investments LLC, Third-Party Defendants, IAC Greenville LLC, Counter Claimant,
DCHC Investments LLC, Counter Defendant.


          Donald C. Coggins, Jr. United States District Judge

         This matter is before the Court on Defendants' Motion for Summary Judgment. ECF No. 77. Plaintiff filed a Response in Opposition to the Motion, and Defendants filed a Reply. ECF Nos. 91, 92. Accordingly, the Motion is ready for review.

         The Court will also address Defendants' Motion in Limine to exclude the introduction of certain photographs and testimony about the photographs; Defendants' Motion to Limine to exclude the testimony and report of Earle Furman; Defendants' Motion in Limine to exclude the testimony and report of Richard P. Baxter; and Plaintiff's Motion in Limine to exclude the prior bad acts of a consultant, evidence of communications between Plaintiff and its prior lender, and evidence of the Sale Order. ECF Nos. 78, 79, 80, 81. The parties have responded to the motions, and the issues are fully briefed.


         Plaintiff brings this action against Defendant IAC Greenville, LLC and International Automotive Components Group North America, Inc, doing business as IAC Group North America, Inc., complaining of breach of contract. Defendants allege counterclaims against Plaintiff, including breach of contract, breach of contract accompanied by a fraudulent act, and negligence. The Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332.

         This case involves a commercial lease dispute. Much of the controversy between the parties concerns the condition and repair of the roof on the subject facility (“the Facility”). JPS Automotive, Inc. (“JPS”) entered into a lease with Plaintiff commencing December 23, 2002, for the Facility. On May 17, 2005, JPS and its parent company, Collins & Aikman, filed for bankruptcy. Among its various defaults under the lease, JPS was in breach of the lease because it failed to repair or maintain the Facility as required. ECF No. 77-5 at 11.

         On June 11, 2007, the Bankruptcy Court for the Eastern District of Michigan issued a Sale Order authorizing the sale and transfer of the lease, among other assets. ECF No. 77-4. On October 11, 2007, as authorized by the Sale Order, IAC 199 Blackhawk Road, LLC[1] received JPS's interest in the lease pursuant to the Assignment and Assumption of Lease (“Assignment”). ECF No. 77-9. The Assignment was entered into pursuant to, and is subject to, the Sale Order. ECF No. 77-4 at 7.


         Summary Judgment Standard

         Rule 56 states, as to a party who has moved for summary judgment, “[t]he court shall grant summary judgment 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 fact is “material” if proof of its existence or non-existence would affect disposition of the case under applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is “genuine” if the evidence offered is such that a reasonable jury might return a verdict for the non-movant. Id. at 257. When determining whether a genuine issue has been raised, the court must construe all inferences and ambiguities against the movant and in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

         The party seeking summary judgment shoulders the initial burden of demonstrating to the court that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made this threshold demonstration, the non-moving party, to survive the motion for summary judgment, may not rest on the allegations averred in his pleadings. Id. at 324. Rather, the non-moving party must demonstrate specific, material facts exist that give rise to a genuine issue. Id. Under this standard, the existence of a mere scintilla of evidence in support of the non-movant's position is insufficient to withstand the summary judgment motion. Anderson, 477 U.S. at 252. Likewise, conclusory allegations or denials, without more, are insufficient to preclude granting the summary judgment motion. Ross v. Commc'ns Satellite Corp., 759 F.2d 355, 365 (4th Cir.1985), overruled on other grounds, 490 U.S. 228 (1989). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248. Further, Rule 56 provides in pertinent part:

         A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:

(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1). Accordingly, when Rule 56(c) has shifted the burden of proof to the non-movant, he must produce existence of a factual dispute on every element essential to his action that he bears the burden of adducing at a trial on the merits.


         Upon review of the parties' submissions, it does not appear that the material facts in this case are in dispute. Rather, the principal dispute concerns the effect of the Bankruptcy Court's Sale Order on Defendants' duties under the lease and the extent to which the Sale Order operates to eliminate Defendants' liability for any prior or future breach of the lease terms.

         Defendants contend that they were not required to return the Facility to the same condition it was in on December 23, 2002, the date that Plaintiff and JPS entered into the lease. ECF No. 77-1 at 7. Defendants assert that their interest in the Facility is subject to and pursuant to the Sale Order and Assignment. Id. Defendants argue that the Sale Order expressly prohibits JPS's liabilities from being transferred to Defendants. Id. at 10. Defendants assert that the Facility is not in the same condition that it was in 2002 because JSP breached its duty to maintain the premises. Id. Accordingly, Defendants contend that requiring them to return the Facility in its 2002 condition would be to hold Defendants liable for JPS's breach. Id. The Court disagrees.

         Defendants' argument is premised on the theory that JPS breached its duty to maintain the premises under the lease. Under the Sale Order, Defendants are not liable for JPS's failure to maintain the Facility. However, as Plaintiff explains in its Response in Opposition to the Motion for Summary Judgment, it does not appear that JPS was necessarily in breach of the applicable lease ...

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