United States District Court, D. Maryland
Stephanie A. Gallagher, United States District Judge.
Nissan Motor Acceptance Corporation ("NMAC") filed
this lawsuit against Defendants Pensare, LLC
("Pensare") and Pensare's owner and operator,
Donato Sauro (collectively "Defendants") seeking to
collect sums owed to NMAC under various loan agreements. ECF
1. Currently pending before the Court is NMAC's motion
for summary judgment ("the Motion"), ECF 28, and
supporting memorandum of law, ECF 28-1. Defendants have not
filed an opposition, and the deadline has now expired. No.
hearing is necessary. See Loc. R. 105.6 (D. Md.
2018). For the reasons stated herein, the Motion will be
granted, and damages awarded as described.
owned and operated Pensare, which did business as a car
dealership known as "Tischer Acura/Nissan"
("the Dealership"). See, e.g., ECF 28-6;
ECF 28-14 ¶ 4. On June 14, 2002, NMAC entered into an
Automotive Wholesale Financing and Security Agreement with
Pensare ("the Floor Plan Agreement"), evidencing
floor plan financing that NMAC made available to Pensare. ECF
28-3; ECF 28-14 ¶ 8. The Floor Plan Agreement provided,
in relevant part, that NMAC would retain a security interest
in the vehicles in the Dealership's possession, and the
Dealership would make payment to NMAC upon disposition of any
vehicles or other property. ECF 28-3 ¶¶ 2.3.2, 2.4.
If the borrowed amounts were not remitted to NMAC in a timely
manner after sale of a vehicle, the amounts would be deemed
“out of trust.” ECF 28-14 ¶ 10.
February 15, 2016, NMAC and Pensare also signed a Capital
Loan and Security Agreement ("the Term Loan
Agreement"), documenting the terms of a $1, 000, 000.00
loan that NMAC made to Pensare. ECF 28-4. The Term Loan
Agreement again provided that NMAC had a security interest in
the Dealership's property, including the vehicles.
Id. In addition, Defendant Sauro signed a personal
guaranty on October 12, 2000, which he reaffirmed on June 14,
2002, under which he personally guaranteed payment of
Pensare's “present and future” liabilities to
NMAC (“the Sauro Guaranty”). ECF 28-5.
2018, NMAC determined that Pensare had not satisfied the
working capital and net cash requirements of the Floor Plan
Agreement and the Term Loan Agreement. ECF 28-6; ECF 28-14
¶ 15. On or about March 14, 2018, NMAC and the
Defendants executed a forbearance agreement ("the
Forbearance Agreement"), under which NMAC agreed to
forbear from enforcing its rights and remedies under the Loan
Agreements until June 8, 2018 or another default, whichever
occurred sooner, in exchange for Defendants' commitment
to capitalize the Dealership in accordance with agreed terms.
ECF 28-14 ¶ 16.
an audit conducted on October 15, 2018, revealed that Pensare
had sold fifty-eight vehicles from trust without remitting
the required proceeds to NMAC. See ECF 28-14 ¶
17; ECF 28-3 ¶ 3.4 (“All funds, Proceeds or other
property belonging to NMAC, or required to be delivered to
NMAC, and received by Dealer shall be received by Dealer in
trust for NMAC and shall be paid to NMAC
immediately.”). Those actions constituted an additional
default under the Loan Agreements, resulting in termination
of the forbearance period. ECF 28-7. As a result, NMAC
exercised its right under the Floor Plan Agreement to place a
contractor at the Dealership to monitor sales transactions,
in order to protect its collateral. ECF 28-14 ¶ 18.
Also, on October 16, 2018, NMAC sent a Default Notice to
Defendants, notifying them of the October 15, 2018 audit
findings, and demanding repayment of the balance owed on the
fifty-eight vehicles ($1, 626, 039.18) on or before October
18, 2018. ECF 28-14 ¶ 19; ECF 28-7.
failed to make the payment. ECF 28-14 ¶ 20. NMAC sent
another letter on October 17, 2018 ("the Termination
Notice"), stating that NMAC would terminate the
availability of floor plan financing as of December 17, 2018,
and would require immediate payment of amounts owed under the
loan agreements between NMAC and Pensare. ECF 28-8.
receiving the Termination Notice, the Dealership continued to
sell vehicles out of trust, without remitting the
contractually required amounts to NMAC. ECF 28-14 ¶ 22.
Accordingly, NMAC accelerated all amounts due under the Loan
Agreements in a demand letter dated November 7, 2018.
See ECF 28-3 ¶ 5.2 (stating remedies NMAC could
pursue in the event of a default). As of November
14, 2018, when the Complaint was filed, Defendants owed NMAC
approximately $17 million. ECF 28-14 ¶ 24.
NMAC's request, and with the consent of the Defendants,
the Court granted temporary injunctive relief to preclude
Defendants from selling additional vehicles out of trust, and
issued a writ of replevin for the Dealership's inventory.
ECF 14, ECF 20. The Court scheduled a preliminary injunction
and show cause hearing on January 2, 2019. Id. Prior
to that hearing, Defendants notified NMAC of their intent and
preliminary commitments to sell the Dealership (both the
Nissan and Acura segments). ECF 28-14 ¶ 25. The parties
entered a Stipulation and Consent Order allowing Defendants
to continue to pursue the sales, with certain restrictions.
ECF 19. The Stipulation and Consent Order included an
agreement that as of January 2, 2019, the out of trust
position was almost $ 4 million. Id. (“As of
January 2, 2019, the aforesaid out of trust position totals
$3, 979, 939.77.”).
first closed the sale of its Acura segment on March 1, 2019.
ECF 28-14 ¶ 27. In connection with the closing, the
Acura purchaser paid the full floor plan balance associated
with the Acura inventory. Id. ¶ 28. Defendants
executed a Payoff Letter agreeing that they would remain
liable to NMAC for the balance of the unpaid indebtedness.
Id. ¶ 27. Some portion of the other payments
made by the Acura purchaser to Defendants were remitted to
NMAC and applied to the balance on the Floor Plan Loan.
See Id. ¶ 29. The closing of the sale of the
Nissan segment, on March 15, 2019, resulted in similar
payments and transactions. Id. ¶ 30-34. In
total, as of August 23, 2019, there remains due and owing: 1)
under the Floor Plan Agreement, $1, 378, 610.31 in principal,
$178, 807.51 in accrued interest, $59, 500.00 in contractor
fees, and $69, 696.00 in security fees; and 2) under the Term
Loan Agreement, $129, 943.82 in principal, and $10, 395.36 in
unpaid interest. Id. ¶ 35. In total, as of
August 23, 2019, Pensare (and Sauro pursuant to the Guaranty)
owed $1, 826, 953.00 to NMAC. ECF 28-14 ¶ 35. In
addition, interest accrues on the principal for the Floor
Plan Agreement at the rate of $283.02 per diem, and under the
Term Loan Agreement at $56.85 per diem. Id.
Loan Agreements also entitle NMAC to its enforcement costs,
including attorneys' fees and expenses, in the event of
the Dealership's default. See ECF 28-3 ¶
5.2; ECF 28-4 ¶ 11F.
Rule of Civil Procedure 56(c) provides that summary judgment
“should be rendered if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(c)(2). The Supreme Court has clarified that
this does not mean that any factual dispute will defeat the
motion. “By its very terms, this standard provides that
the mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be
no genuine ...