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Farm Credit Leasing Services Corp. v. 5 K Farms, Inc.

United States District Court, S.D. Mississippi, Eastern Division

February 10, 2014

FARM CREDIT LEASING SERVICES CORPORATION, Plaintiff,
v.
5 K FARMS, INC., DAVID KITTRELL and JANET KITTRELL, Defendants.

MEMORANDUM OPINION AND ORDER

KEITH STARRETT, District Judge.

This matter is before the Court on the Plaintiff Farm Credit Leasing Services Corporation's Motion for Summary Judgment [14]. For the reasons stated below, the Court finds that the motion should be granted in part and denied in part.

I. BACKGROUND

This is a breach of contract action in which the Plaintiff Farm Credit Leasing Services Corporation ("Farm Credit") seeks to recover payments from the Defendants purportedly owed under a lease agreement and related instruments. The Defendants David Kittrell and Janet Kittrell are adult resident citizens of the State of Mississippi. Janet Kittrell is also the corporate president and registered agent of the Defendant 5 K Farms, Inc. ("5K Farms"), a Mississippi corporation.

The following matters are established by the pleadings or the undisputed facts presented by Farm Credit in support of summary judgment. On March 14, 2008, Farm Credit, as lessor, entered into a lease agreement with 5K Farms, as lessee, for the lease of a 2008 Blueberry Processing Line (the "Leased Equipment"). ( See Lease [14-1].) The Lease required an initial rental payment in May of 2008 and five (5) subsequent payments due each November. Contemporaneously with the execution of the Lease, Farm Credit and 5K Farms entered into an Interim Funding Agreement ("IFA") for the procurement of the Leased Equipment. ( See IFA [14-2 at ECF pp. 1-2].) Also on March 14, David Kittrell and Janet Kittrell executed a Guaranty in favor of Farm Credit, under which they unconditionally (and jointly and severally) guaranteed payment and full performance by 5K Farms under the Lease and IFA. ( See Guaranty [14-2 at ECF pp. 4-5].)

On December 30, 2011, Farm Credit issued Notices of Default to David Kittrell and Janet Kittrell, in their capacities as Guarantors, and to 5K Farms. ( See Notices of Default [14-4].) Each Notice of Default provided that 5K Farms failed to make a rental payment in the amount of $22, 948.25, and that "all available remedies" would be pursued if payment was not made within ten (10) days. On February 28, 2012, Farm Credit issued Notices of Acceleration to David Kittrell and Janet Kittrell, in their capacities as Guarantors, and to 5K Farms. ( See Notices of Acceleration [14-5].) Each Notice of Acceleration indicated that the Lease was placed in default on December 30, 2011; that the default had not been cured; and, that Farm Credit declared the "entire amount of rental and other charges due, and to become due, for the entire Lease Term... immediately due and payable" pursuant to paragraph 19(a) of the Lease. This amount totaled $82, 547.23 per the Notices of Acceleration.

On January 16, 2013, Farm Credit filed its Complaint [1] against the Defendants in this Court. Subject matter jurisdiction is asserted on the basis of diversity of citizenship under Title 28 U.S.C. § 1332. The Complaint alleges that the Defendants are in default under the Lease and IFA in the total amount of $84, 682.93. ( See Compl. [1] at ¶ 13.) The Complaint further posits that David Kittrell and Janet Kittrell are liable for damages as guarantors of 5K Farms' payment and performance obligations. ( See Compl. [1] at ¶ 14.) Farm Credit seeks a judgment awarding damages, pre-judgment and post-judgment interest, and reasonable attorney's fees.

On December 18, 2013, Farm Credit filed its Motion for Summary Judgment [14]. Farm Credit requests that the Court issue the following summary judgment rulings in its favor:

(1) 5K Farms is liable to Farm Credit in the amount of $87, 797.48 due to its breach of the Lease and IFA.
(2) 5K Farms is liable to Farm Credit for reasonable attorney's fees incurred by Farm Credit in seeking payment and prosecuting its claims.
(3) David Kittrell and Janet Kittrell are personally liable for damages and attorney's fees due to their execution of the Guaranty in favor of Farm Credit.

The Defendants have not responded to the motion and the time for their response has expired.

II. DISCUSSION

A. Standard of ...


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