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Capital Development Affiliates LLC v. Thigpen

United States District Court, N.D. Oklahoma

December 4, 2017

CAPITAL DEVELOPMENT AFFILIATES LLC, Plaintiff and Counterclaim Defendant,
v.
ZELAND BENJAMIN THIGPEN, III, Defendant and Counterclaim Plaintiff, and ZELAND BENJAMIN THIGPEN, III, Third Party Plaintiff,
v.
ICD METALS, LLC, Third Party Defendant.

          OPINION AND ORDER

          CLAIRE V. EAGAN UNITED STATES DISTRICT JUDGE

         This is an action to enforce a guaranty. Before the Court are plaintiff Capital Development Affiliates, LLC's, motions to dismiss defendant Zeland Benjamin Thigpen III's counterclaims (Dkt. # 11) and to strike his third party complaint (Dkt. # 12), and defendant's motion to defer defendant's response to plaintiff's motion for summary judgment (Dkt. # 22).

         I. Background

         Plaintiff is a limited liability company organized and existing under the laws of the State of New York and maintains its principal place of business at 150 East 52nd Street, New York, New York. Defendant is a resident of the State of Oklahoma and resides at 8211 South Delaware Place, Tulsa, Oklahoma. Dkt. # 1, at 2. Defendant and his wife, Cheryl Thigpen, were the sole members of Julimar Trading, LLC (Julimar), a now defunct company that conducted business “in the international purchase and sale of industrial metallic alloys.” Id.; Dkt. # 7, at 4.

         On June 26, 2015, Julimar executed a security agreement wherein it granted a third party, ICD Metals, LLC (Metals LLC), a security interest in Julimar's right, title, and interest to certain collateral. Dkt. # 1-1.

         On September 30, 2015, Julimar executed a demand note (the note) wherein it agreed to pay Metals LLC, on demand, a principal sum of $2, 933, 356. Dkt. # 1-2, at 1. Additionally, pursuant to the note, Julimar agreed to (1) pay interest on the outstanding principal balance at a rate of 12% per annum, calculated on the basis of a 360 day year and twelve months of 30 days; (2) make payments on the first day of each month commencing October 1, 2015 and pay a late payment charge of 5% of any interest or required principal payment made more than ten days after the due date thereof; (3) upon the stated or accelerated maturity of the note, pay interest at a per annum rate of 5% in excess of the normal interest rate; and (4) should the indebtedness be collected at law, pay all costs of collection, including reasonable attorney fees. Id.

         Also on September 30, 2015, as additional security for Julimar's obligations under the note, defendant executed a guaranty, wherein he guaranteed the punctual and full payment of all present and future indebtedness of Julimar to Metals LLC. Dkt. # 1-3. The guaranty contained the following provision,

Nature of Guaranty. This Guaranty is an absolute, unconditional, continuing, direct and immediate guaranty of payment and not just of collection and is no way conditioned upon or limited by or in any other way affected by . . . any defense asserted or claimed by Borrower with respect to Borrower's Obligation . . . . The obligations of Guarantor under this Guaranty shall not be subject to any counterclaim . . . setoff . . . or defense based upon any claim that Guarantor may have against Borrower or Lender . . . .

Id. at 3. In addition, the guaranty stated that it, “shall be governed by, construed and interpreted in accordance with the laws of the State of New York.” Id. at 11. On February 12, 2016, defendant and Cheryl Thigpen executed an amended guaranty; it contained the same provisions as the original but added Cheryl Thigpen as a guarantor. Dkt. # 29-5.

         On April 1, 2016, Metals LLC assigned the note, security agreement, and amended guaranty to plaintiff. Dkt. # 1-4. In a May 3, 2016 letter to Julimar, plaintiff declared the unpaid principal, interest, default interest, late charges, and other amounts specified in the documents to be immediately due and payable. Dkt. # 1-5. Plaintiff demanded payment no later than May 13, 2016. Id. On May 20, 2016, plaintiff sent a second letter to Julimar, advising Julimar that it failed to make payment of the required amounts by May 13, 2016 and that plaintiff reserved all rights arising from Julimar's default. Id. As a consequence of Julimar's default, according to plaintiff, there is now due and owing to plaintiff $2, 933, 356, together with interest at the rate of 12% per annum from the 1st day of September 2016, and additional sums for late payment charges, attorney fees, costs, and expenses. Dkt. # 1, at 5.

         On November 18, 2016, Julimar, defendant, and Cheryl Thigpen filed Chapter 7 Bankruptcies in the United States Bankruptcy Court for the Northern District of Oklahoma. Dkt. # 16-4, at 5. Defendant's bankruptcy discharge, however, was waived pursuant to an order entered on May 11, 2017. Dkt. # 16-6.

         On July 20, 2017, plaintiff filed this action, alleging that, because the note remains in default, defendant has breached the amended guaranty. Dkt. # 1, at 6. Plaintiff seeks a judgment in its favor in the principal amount of $2, 933, 356, together with interest at the rate of 12% per annum from the 1st day of September, 2016, along with additional sums for late payment charges, attorney fees, costs, and expenses. Id. at 6-7.

         In response to plaintiff's complaint, defendant filed an answer (Dkt. # 7), a counterclaim (Dkt. # 8), and a third party complaint (Dkt. # 9) against Metals LLC. In defendant's counterclaim, he states, “Defendant and Metals LLC entered into a joint venture . . . to conduct business in the international purchase and sale of industrial metallic alloys . . . . ” Dkt. # 8, at 4. Defendant does not, however, submit documentation supporting this statement, and the joint venture agreement that plaintiff submits states that the joint venture was between Julimar (i.e. not defendant) and Metals LLC. Dkt. #11-7. In addition, in his counterclaim defendant alleges the following,

In December 2014, Metals LLC entered into several transactions . . . that were [not] approved by Defendant.
Metals LLC incurred substantial losses as a result of the Unapproved Transactions of more than $2, 000, 000.
Metals LLC then allocated losses from the Unapproved Transactions to the Joint Venture, and claimed all of Defendant's share of profits gained from Approved Transactions as an offset.
When Defendant objected, Metals LLC replied that unless Defendant acceded to the allocation of the losses from the Unapproved Transactions, it would deny Defendant any access to capital needed to finance further transactions, but if Defendant agreed to the reallocation of losses, financing would continue.
Defendant signed the promissory note and guaranty in reliance on promises by Metals LLC that it would provide financing for further transactions by the Joint Venture.
However . . . within 90 days after Defendant executed the promissory note, Metals LLC ceased providing any ...

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