Javelin Global Commodities Ltd. v. Booth

Background

Javelin and Cambrian Coal LLC entered into agreements concerning the purchase, sale, and shipment of coal. Under a related confirmation, Cambrian affiliate Clintwood Elkhorn Mining LLC was to supply coal to Javelin, and Javelin made a $4 million prepayment. James Booth, described in the opinion as an indirect owner of Cambrian, signed a guaranty in favor of Javelin.

The guaranty stated that Booth absolutely, unconditionally, and irrevocably guaranteed Cambrian’s obligations under the Master Coal Purchase and Sale Agreement and the Confirmation, including repayment of the prepayment and related interest, subject to a maximum liability of $4 million plus certain interest and enforcement costs. The guaranty also waived various defenses, claims, offsets, and counterclaims, other than defenses based on payment or performance.

Clintwood later stopped shipping coal, and the parties did not complete the planned transaction. Javelin stated that Cambrian failed to repay the remaining prepayment balance. Javelin also credited amounts relating to unpaid balances on two coal shipments and amounts Javelin owed to another Cambrian affiliate. Javelin demanded payment from Booth under the guaranty, but Booth did not pay.

Prior Proceedings and Motion

Javelin sued Booth. Booth initially failed to answer on time, later answered, and paid costs required by the court for accepting his late appearance. Javelin first moved for summary judgment, but the court denied that motion without prejudice because it was premature and allowed Booth to take discovery. Javelin then renewed its motion after discovery.

Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. Javelin argued that the signed guaranty, Cambrian’s nonpayment, and Booth’s nonpayment established its right to recover.

Court’s Analysis

The court found that Booth did not dispute his liability under the guaranty. Javelin established that Booth signed an unconditional guaranty, Cambrian failed to pay its debt to Javelin, and Booth also failed to pay. Booth offered no defense to liability and no evidence contradicting Javelin’s proof of Cambrian’s nonpayment. Because the guaranty was absolute and unconditional, the court held that Booth could not assert the waived defenses or offsets after the debt and nonpayment were established.

Booth’s remaining objections concerned the amount owed. He challenged the evidence supporting one provisional payment, argued that Javelin had failed to apply a fifth $270,000 prepayment discount, and questioned the support for Javelin’s interest calculation. The court rejected the evidentiary challenge, finding that sworn testimony and supporting business records established the payment. The court agreed that Javelin’s original calculation had not properly reflected the fifth discount, but found that Javelin’s amended declaration corrected the figures. The court also found that Javelin adequately explained the interest calculation and that Booth identified nothing showing the corrected calculation was wrong.

Disposition

Judge Colleen McMahon granted Javelin’s motion for summary judgment. The clerk was directed to enter judgment for Javelin, with interest at the contract rate through the date Javelin submitted the judgment form and interest at the federal judgment rate after judgment was entered. The court stated that the case should be closed once judgment was entered.