Ascentium Capital LLC v. Central Medical Clinic of St. Paul, PLLC

Background

Ascentium Capital LLC entered into a 2018 loan agreement with Central Medical Clinic of St. Paul, PLLC (CMC) to finance CMC’s purchase of medical equipment or software from 7 Medical Systems, LLC. CMC agreed to pay $3,534 per month for 60 months, for total payments of $212,040. Alfonso Morales signed the agreement as CMC’s owner and as an individual guarantor.

CMC made payments totaling $45,942 and then stopped paying. Ascentium sued for breach of contract, seeking amounts due under the agreement’s acceleration clause, interest, costs, and attorneys’ fees. The defendants asserted equitable defenses, including unclean hands and laches, and counterclaimed for breach of contract, arguing that Ascentium had failed to provide the equipment or software.

After the defendants’ counsel withdrew, the court directed CMC to obtain counsel because a corporation cannot proceed without a lawyer in federal court. The defendants did not obtain counsel, did not participate in a later status conference, and did not respond to Ascentium’s summary-judgment motion. The court nevertheless stated that it still had to determine whether Ascentium was entitled to judgment as a matter of law.

Analysis

Summary judgment is appropriate when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. Applying this standard, the court found no dispute that the parties were bound by the loan agreement and that the defendants stopped making required payments.

The court rejected the defendants’ prior contention that Ascentium’s failure to provide the equipment or software justified stopping payments. The record contained no evidence supporting that contention. The court also relied on a commencement agreement in which CMC agreed to make payments under the loan agreement even though some equipment or software had not yet been delivered. In addition, the agreements did not show that Ascentium, rather than 7 Medical Systems, was obligated to provide the equipment or software. The defendants supplied no evidence supporting their equitable defenses.

The court granted summary judgment to Ascentium on its breach-of-contract claim and to Ascentium on the defendants’ breach-of-contract counterclaim. It determined that the acceleration clause entitled Ascentium to $162,520.54, consisting of $67,146.00 in past-due payments and $95,374.54 under the acceleration clause.

The court did not award the $891.80 in late charges, site-inspection charges, and returned-payment charges included in Ascentium’s calculation because Ascentium had not provided evidence explaining how those charges were incurred or otherwise shown that the loan agreement authorized them.

Relief Ordered

The court awarded Ascentium prejudgment interest on the $162,520.54 damages amount at 16% per year, beginning on the thirtieth day after Ascentium demanded payment under the acceleration clause and continuing until the initial judgment was entered. It also awarded post-judgment interest at 16% per year, accruing at $71.24 per day until payment.

The court awarded Ascentium the attorneys’ fees and costs it incurred in bringing the action, with the amount to be determined through later briefing. CMC and Morales were made jointly and severally liable for the damages, interest, attorneys’ fees, and costs. Judge Susan Richard Nelson ordered that judgment be entered accordingly.