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KCI Auto Auction, Inc. v. Anderson

United States District Court, W.D. Missouri, St. Joseph Division

April 13, 2018

KCI AUTO AUCTION, INC., Plaintiff,
v.
ALONZO ANDERSON, et al., Defendants.

          ORDER

          NANETTE K. LAUGHREY UNITED STATES DISTRICT JUDGE

         Pending before the Court is Plaintiff KCI Auto Auction's Motion for Summary Judgment, Doc. 105. For the following reasons, the motion is granted.

         I. Background[1]

         Plaintiff KCI Auto Auction, Inc. is a wholesale motor vehicle auction located in Kansas City, Missouri. In January 2014, Defendants Barry Ristick, Angelo Jefferson, and Tom Ephrem visited KCI on behalf of the used car business, Defendant Lucky 7 Used Cars, LLC, seeking to gain access to KCI's weekly auctions. These Defendants were told that in order to participate in the auctions, KCI would require proof that they are licensed vehicle salespersons and/or a licensed vehicle dealer, and that their used vehicle dealership was registered with AuctionACCESS.[2] KCI also told these Defendants that they must obtain a dealer card and salesperson badges, and agree to all of KCI's auction policies and terms of sale.

         In April 2014, these Defendants completed a registration application with KCI, in the name of “Lucky 7 Used Cars.” The application included a dealership authorization form that listed Defendant Alonzo Anderson as the dealership's owner, and listed Angelo Jefferson, Jason Ephrem, Barry Ristick, and Tom Ephrem, as the dealership's representatives. These Defendants also provided KCI with the Used Vehicle Dealer number that they would be operating under, which was issued by the State of Kansas, and showed that they had registered their dealership with AuctionACCESS. These Defendants also provided an “Auction Guarantee, ” signed and executed by Anderson, which represented that he was the owner of Lucky 7 Used Cars, and that in consideration of KCI allowing Lucky 7 Used Cars to participate at the auctions, he personally guaranteed full payment of any debts. Upon receiving the Defendants' registration application, KCI permitted them to participate in the auctions.

         In June 2014, Tom Ephrem and Barry Ristick approached KCI, on behalf of Anderson and Lucky 7 Used Cars, and established a “floor plan” account (the “Lucky 7 Account”). According to the agreement, which was not reduced to writing, KCI would allow the Defendants to purchase vehicles without full payment at the time of sale, and instead required only that they pay the amounts due within sixty days. If the vehicles were not paid for at the time of sale, however, KCI would assess a service charge. The Defendants were also permitted to take immediate possession of the vehicles, but KCI retained the original titles, and the Defendants agreed not to sell or transfer the vehicles until full payment was made and the titles were transferred.

         Over the next three years, the Defendants purchased 293 used vehicles on the Lucky 7 Account, for which the sales price and buyers fees totaled $1, 156, 205.62. Although there is an individual sale contract for each purchase, all of the Defendants' purchases were made according to the floor plan, and the Defendants often made payments on the Lucky 7 Account that were generic, and did not reference any specific transaction. Beginning in 2015, the Lucky 7 account became delinquent. However, over the course of 2015 and 2016, Barry Ristick and Tom Ephrem regularly called and personally visited KCI, and always made promises, assurances, and representations that they would get the account paid in full soon. In reliance on these representations, KCI continued to allow the Defendants to participate at the auctions. In early 2017, KCI finally prohibited the Defendants from attending any more auctions, and demanded payment of the outstanding balance on the Lucky 7 Account.

         In July 2017, with the Lucky 7 Account balance at $248, 880.38, KCI brought suit against Alonzo Anderson, Danny Ephrem, David Ephrem, Jason Ephrem, J.J. Ephrem, Tom Ephrem, Angelo Jefferson, and Barry Ristick, as well as Lucky 7 Used Cars, L.L.C., Lucky 7 Discount Auto Sales LLC, and Quality Used Cars, LLC. In December, 2017, the parties notified the Court that KCI had reached a settlement with Defendants Tom Ephrem, David Ephrem, Danny Ephrem, Barry Ristick, Angelo Jefferson, and Quality Used Cars, LLC (the “Settling Defendants”). Doc. 89. In January, 2018, pursuant to the settlement agreement, the Court entered a consent judgment against the Settling Defendants. Doc. 97. One week later, the Court entered a default judgment against Lucky 7 Used Cars, L.L.C. and Lucky 7 Discount Auto Sales LLC, Doc. 100, and KCI voluntarily dismissed Defendants Jason Ephrem and J.J. Ephrem from the suit. Docs. 102, 103. Thus, there is only one defendant remaining, Alonzo Anderson, who proceeds pro se.

         III. Discussion

         KCI seeks summary judgment against Anderson on nine claims: Breach of Contract, Action on Account, Account Stated, Fraudulent Misrepresentation, Fraudulent Conveyance, Unjust Enrichment and Quantum Meruit, Conversion, Negligence Per Se, and Alter Ego/Piercing the Corporate Veil. The purpose of summary judgment is to “pierce the pleadings and assess the proof in order to see whether there is a genuine need for trial.” Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). To obtain summary judgment, the movant must show 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). If the movant satisfies this burden, then the non-moving party “must set forth specific facts sufficient to raise a genuine issue for trial and cannot rest on allegations in the pleadings.” Ryan v. Capital Contractors, Inc., 679 F.3d 772, 776 (8th Cir. 2012) (quoting Nw. Airlines, Inc. v. Astraea Aviation Servs., Inc., 111 F.3d 1386, 1393 (8th Cir.1997)).

         In deciding whether to grant summary judgment, the Court must view all facts in a light most favorable to the nonmoving party, and give that party the benefit of all reasonable inferences drawn from the facts. Robinson v. Monaghan, 864 F.2d 622, 624 (8th Cir. 1989). Both parties, however, must support their assertions “by citing to particular parts of materials in the record . . . or showing that the materials cited do not establish the absence or presence of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). Anderson does not address KCI's section of uncontroverted facts, nor does his response provide its own. Moreover, despite relying on new facts, Anderson supports only some of his assertions by swearing to them in a single, self-serving affidavit.

         KCI has also represented to the Court that it submitted to Anderson a written request to admit, which he failed to answer. When a party serves a written request to admit, every matter included in that request “is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney.” Fed.R.Civ.P. 36(a)(3). “A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended.” Fed.R.Civ.P. 36(b). Anderson does not dispute KCI's contentions with regard to the request to admit, and has not moved for the Court to withdraw or amend the admissions. Accordingly, the Court must treat the admissions as conclusively established. See Doc. 106-2 (KCI's Request for Admissions).

         A. Count I: Breach of Contract

         To obtain summary judgment on its breach of contract claim, KCI must show that there is no genuine dispute as to the material facts that establish “(1) the existence of a valid contract; (2) [Anderson's] obligation under the contract; (3) a breach by [Anderson] of that obligation; and (4) resulting damages.” Clayborne v. Enter. Leasing Co. of St. Louis, LLC, 524 S.W.3d 101, 106 (Mo.Ct.App. 2017) (citing C-H Building Associates, LLC v. Duffey, 309 S.W.3d 897, 899 (Mo.Ct.App. 2010).

         KCI maintains that it has a valid contract with Anderson, imposing mutual obligations on the parties, as a result of the Lucky 7 Account “floor plan” and Anderson's personal guarantee. In support, KCI provides the affidavit of Tom Ephrem, Danny Ephrem, David Ephrem, Barry Ristick, and Angelo Jefferson, Doc. 106-1, and the request for admissions that Anderson failed to respond to. Doc. 106-2. According to both the affidavit and the unanswered request for admissions, Barry Ristick and Tom Ephrem approached KCI and set up the Lucky 7 Account floor plan agreement on behalf of Anderson. Doc. 106-1, p. 4; Doc. 106-2, p. 15. Under the agreement, the Defendants would purchase vehicles on Anderson's behalf, and charge them to the Lucky 7 Account. The Defendants would then be allowed to take immediate possession of the vehicles, and Anderson would be permitted up to 60 days to pay the full sale price. Doc.106-1, p. 8; Doc. 106-2, p. 15. If the Defendants did not pay for the vehicles at the time of sale, KCI would assess a service charge based on the amount of time between the sale and payment. Doc. 106-1, p. 4. According to both the affidavit and the unanswered request for admissions, Barry Ristick and Tom Ephrem were acting on behalf of and as agents for Anderson when they agreed that he would be responsible and obligated on the Lucky 7 Account. Doc. 106-1, p. 4.

         In addition to the orally agreed to Lucky 7 Account floor plan, KCI also bases its breach of contract claim on a document entitled “KCI Kansas City Auction Guarantee” (the “Auction Guarantee”). Doc. 106-2, p. 62. According to the Auction Guarantee, which is signed by Anderson and was delivered to KCI with the registration forms in April 2014, in consideration of KCI allowing the Defendants to participate at the auctions, Anderson personally guaranteed full payment of any debts of Lucky 7 Used Cars to KCI. Doc. 106-4, p. 46.

         Anderson first argues that the Auction Guarantee and 293 sales contracts are forged. Doc. 111-1, p. 2. This is the first time that Anderson has raised any issues of forgery or falsified documents, however, and indeed on several prior occasions he has affirmed the Guarantee's authenticity. In his answer to the First Amended Complaint, Anderson states that “[a]ll documents that Defendant faxed or sent to KCI (Plaintiff) are true and correct.” Doc. 81, p. 2. Additionally, KCI included the Auction Guarantee in its request for admissions, and requested that Anderson admit its authenticity. Doc. 106-2, pp. 11-12. Anderson did not respond, much less raise any claim of forgery at that time, and pursuant to Federal Rule of Civil Procedure 36(a)(3) admitted the document's authenticity. Although he supports his argument with an affidavit, it does not create a disputed issue of fact because his admission is conclusive. See Quasius v. Schwan Food Company, 596 F.3d 947 (8th Cir. 2010).

         Anderson also argues that Tom Ephrem and Angelo Jefferson had no authority to enter into any agreements on his behalf. However, he does not include this contention in his affidavit, and offers no evidence to support it, let alone any that overcomes KCI's affidavits. Tom Ephrem and Barry Ristick have both sworn under oath that they were acting as Anderson's agents when they set up the Lucky 7 Account floor plan, and when they entered into the purchase agreements on the account. Doc. 106-1, pp. 4-6. Additionally, Anderson failed to deny that Tom Ephrem and Barry Ristick were his agents and had his authority to enter into the Lucky 7 Account floor plan with KCI when he was served with KCI's request for admissions. Doc. 106-2, p. 14. Anderson's completely unsupported argument that there was no authority to enter into the agreements on his behalf does nothing to refute KCI's evidence.

         Finally, Anderson argues that the Mo. Rev. Stat. § 432.047 required the Lucky 7 Account floor plan agreement to be in writing. However, Section 432.047 states that “[a] debtor party may not maintain an action upon or a defense . . . .” Mo. Rev. Stat. § 432.047(2) (emphasis added). It also states that “[n]othing contained in this section shall affect the enforceability by a creditor of any . . . agreement . . . evidencing or creating an obligation for the payment of money or other financial accommodation, lien, or security interest.” Mo. Rev. Stat. § 432.047(4). Here, KCI is the creditor, not the debtor, and thus it is unclear that the statute applies. See BancorpSouth Bank v. Paramont Properties, L.L.C., 349 S.W.3d 363, 368 (Mo.Ct.App. 2011) (“The Missouri Credit Agreement Statute acts as a statute of frauds to protect banks from losing their right to enforce a loan according to the terms of the written loan documents, if they informally attempt to accommodate debtors.”). Even if the statute does apply, however, Anderson is unable to overcome the “Kansas City Auction Guarantee, ” which is in writing, signed by Anderson, and personally guarantees all of Lucky 7 Used Cars' debts. Doc. 106-2, p. 62.

         The final two elements of KCI's breach of contract claim are undisputed. At the time this lawsuit was filed, the Lucky 7 Account balance was $248, 880.38, which Anderson refused to pay. In addition to the outstanding balance, KCI also suffered damages in the form of attorney's fees and costs spent attempting to collect. Anderson has failed to overcome KCI's showing that there is no genuine dispute of material facts, and establish that he is liable. Therefore, summary judgment must be entered against Anderson on Count I, breach of contract, in the amount of $443, 957.85.

         B. Count II: Action on Account

         KCI also seeks summary judgment on its claim for action on account, which is based on the Lucky 7 Account floor plan agreement. To prevail, KCI must show that there is no genuine dispute as to the material facts establishing that “1) [Anderson] requested plaintiff to furnish merchandise or services, 2) [KCI] accepted [Anderson's] offer by furnishing such merchandise or services, and 3) the charges were reasonable.” Helmtec Industries, Inc. v. Motorcycle Stuff, Inc., 857 S.W.2d 334, 335 (Mo.Ct.App. 1993).

         Here, KCI relies on the same evidence that supported its breach of contract claim: the affidavit of Tom Ephrem, Danny Ephrem, David Ephrem, Barry Ristick, and Angelo Jefferson, and the unanswered requests for admission. Docs. 106-1, 106-2. According to the affidavit and unanswered requests for admission, the Defendants approached and solicited KCI, as Anderson's agents, and requested that KCI agree to establish the Lucky 7 Account floor plan for Anderson. KCI accepted the request, and furnished 293 vehicles to Anderson. The affidavit and requests for admissions also conclusively establish that the charges on the Lucky 7 Account were “reasonable, true and accurate.” Doc. 106-1, p. 9.

         Anderson does not dispute that KCI furnished the vehicles to Anderson, or that the charges were reasonable. His only argument relevant to KCI's action on account is the same as was discussed above, that his agents did not have any authority to enter into the agreements on his behalf. However, for the same reasons as discussed, Anderson's arguments are insufficient. Therefore, summary judgment must be entered in KCI's favor on Count II, action on account, in the amount of $443, 957.85.

         C. Count IV: ...


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