United States District Court, E.D. Missouri, Eastern Division
FINDINGS OF FACT, CONCLUSIONS OF LAW AND
A. ROSS TJNITED STATES DISTRICT JUDGE.
matter came before the Court on April 24 and 25, 2017 for a
bench trial on Plaintiff TCP Printing Co., LLC
(“TCP”)'s complaint against Defendant
Enterprise Bank & Trust (“Enterprise”) for
breach of contract (Count I), breach of the implied covenant
of good faith and fair dealing (Count II), conversion (Count
III), and alternative claim for unjust enrichment (Count IV)
(Doc. No. 1); and Enterprise's motion for summary
judgment (Doc. Nos. 38, 48). Evidence was adduced and
concluded. A transcript was prepared and the parties
submitted proposed findings of fact and conclusions of law.
Having considered the pleadings, trial and deposition
testimony, exhibits, and proposed findings of fact and
conclusions of law submitted by the parties, the Court hereby
makes and enters the following findings of fact and
conclusions of law in accordance with Rule 52(a) of the
Federal Rules of Civil Procedure.
all times relevant to this action, Plaintiff TCP Printing
Co., LLC (“TCP”), a Pennsylvania limited
liability company, was a commercial printing company, whose
sole member was Greg Bozzi (“Bozzi”).
Investments VI LLC (“JPB”), was a commercial
printing and direct mail business located in Missouri, doing
business as 601 Direct LLC (“601 Direct”). Paul
Behrens (“Behrens”) was the sole owner and
President of JPB.
Defendant Enterprise Bank & Trust
(“Enterprise”) is a Missouri chartered trust
company with banking powers, and at all relevant times was
JPB's senior lender holding a first priority security
interest in all of JPB's collateral, namely 601 Direct
inventory, equipment and accounts receivable.
February 2014, JPB was in financial distress, having already
defaulted on three loans extended by Enterprise, and owed
Enterprise over $1.9 million.
Having acquired printing companies in the past as a way to
grow his core business, Bozzi approached Behrens in March
2014 about purchasing JPB's assets, namely its equipment
and customer base. It was Bozzi's testimony that TCP was
only interested in JPB's equipment and customer base and
had no intention of purchasing and running 601 Direct.
(Transcript of Proceedings on April 24, 2017 (“Tr.
1”), Doc. No. 85 at 18:16-21; 21:18-22:3; 75:23-76:1).
Between March and May 2014, TCP, Enterprise, and JBP met
several times to discuss 601 Direct's operations, tour
the 601 Direct facility, and identify certain 601 Direct
inventory and equipment. (Tr. 1 at 23:25-24:2). Bozzi
testified that because TCP was not buying 601 Direct, he
thought, as he had in past acquisitions of printing
companies, that operating the business for a certain period
of time would give TCP insight into the staffing and
equipment necessary to support 601 Direct's customer
base. According to Bozzi, TCP wanted to keep JPB running and
continue processing orders in order to earn the work for
existing customers (Tr. 1 at 25:3-26:6)
and JBP were unable to come to terms on an operating
agreement or asset purchase agreement. (Tr. 1 at 27:23-28:12)
Bozzi never purchased any assets of 601 Direct. (Tr. 1 at
78:11-15). However, according to Bozzi, by May 9, 2014, TCP
was providing the funding and working capital necessary to
keep 601 Direct from shutting down. (Tr. 1 at 26:14-25)
Enterprise was aware that TCP had some involvement in
JPB's operations, but assumed TCP was just providing
“working capital” until it could purchase some or
all of JPB's assets. (Tr. 1 at 143-144)
May 22, 2014, JPB, Enterprise, and TCP entered into an
Agreement Relating to Collateral (“the Collateral
Agreement”) (Ex. P-10) to facilitate TCP's purchase
of JPB's assets, and specifically its equipment.
parties agree the Collateral Agreement was unambiguous. By
its terms, the proceeds of all JPB inventory, accounts
receivable and work in progress identified on a schedule
attached to the Collateral Agreement as Exhibit A would be
paid to Enterprise and applied to the outstanding loan
balance. (Id. at ¶¶ 4, 5).
Paragraph 3 of the Collateral Agreement provided that
“[a]ll of the inventory listed on Exhibit A will be
segregated and identified separately from all inventory
purchased through funds provided by TCP.” (Id.
at ¶ 3).
Paragraph 6 of the Collateral Agreement provided that any
proceeds from post-closing work funded by TCP and not listed
on Exhibit A would be outside the scope of Enterprise's
lien, and belong to TCP:
Lender's Release of Lien Regarding Inventory
and Work-in Progress Funded by TCP. Lender
agrees to not assert its lien, security interest or any claim
regarding the Borrower's Inventory and Work-in-Progress
that is funded by TCP and is not listed on Exhibit A thereto.
(Id. at ¶ 6).
Collateral Agreement does not define “Work-in-Progress
that is funded by TCP, ” i.e., “TCP-funded
Paragraph 7 of the Collateral Agreement,
Equipment Purchase and Release of
Lien, provided that TCP would purchase from
JPB, for $885, 800.00 (Equipment Purchase Price), such of
JPB's equipment as was listed on a schedule attached to
the Collateral Agreement as Exhibit B. (Id. at
Under Paragraph 8 of the Collateral Agreement,
Expiration Date, in the event TCP
failed to receive a commitment letter from its bank in an
amount greater than or equal to the Equipment Purchase Price
on or before May 30, 2014, then TCP would be obligated to
“immediately vacate [JPB]'s premises and all of
TCP's rights under this Agreement with regard to the
property listed on Exhibits A and B hereto shall cease and
terminate.” (Id. at ¶ 8).
Under Paragraph 16 of the Collateral Agreement,
Collateral, the parties agreed that
upon the Expiration Date, Enterprise could dispose of all of
JPB's collateral (including all accounts receivable).
(Id. at ¶ 16(b)).
Collateral Agreement further provided at Paragraph 17 that
TCP's failure to “pay any amounts due hereunder on
the date on which such amounts are due” shall