Capital One Equipment Finance Corp. v. Big 3 Taxi, Corp.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

CAPITAL ONE EQUIPMENT FINANCE

CORP. f/k/a ALL POINTS

CAPITAL CORP., d/b/a CAPITAL

ONE TAXI MEDALLION FINANCE,

Plaintiff,

v.

BIG 3 TAXI CORP.; CHARLEY Case No. 17 C 234

TAXI CORP., II; ELVIN’S TAXI

CORP.; EUPHORIA TAXI CORP.; Judge Harry D. Leinenweber

HARVARD TAXI CORP.; MYSTIC

TAXI CORP.; SUNRISE TAXI

CORP.; TWINKY’S TAXI CORP.;

ELVIN SHTAYNER; STANLEY

SHTAYNER; and YASYA SHTAYNER,

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiff Capital One Equipment Finance Corp. (“Capital One”)

moved for and won summary judgment as to liability against the

Defendants, Big 3 Taxi Corp., Charley Taxi Corp., Elvin’s Taxi

Corp, Euphoria Taxi Corp., Harvard Taxi Corp., Hymes Taxi Corp.,

Mystic Taxi Corp., Sunrise Taxi Corp., Twinky’s Taxi Corp., Elvin

Shtayner, Stanley Shtayner, and Yasya Shtayner, based on

promissory notes and guaranties related to Defendants’ defaulted-

upon loans. Having won on liability, Capital One now moves for

summary judgment as to damages and seeks costs and fees. (Dkt.

No. 113.) For the reasons stated herein, that Motion is granted

in part and denied in part.

I. BACKGROUND

The Court has already found in Capital One’s favor on the

question of liability. (See generally Mem. Op. & Order, Dkt.

No. 98.) Though that ruling sets forth this suit’s background in

detail, the Court includes here a brief summary for clarity’s sake.

In 2012, non-party Tri-Global Financial Services, Inc.

originated loans for each of the nine Defendant companies owned by

the Shtayner brothers, Elvin—who owns six of the companies—and

Stanley—who owns three. Each brother executed promissory notes

for the sums loaned to each of their respective companies. At the

same time, each brother signed guaranties for each of their

respective companies’ loans. Finally, Yasya Shtayner, mother to

Elvin and Stanley, signed a guaranty for all nine loans.

Tri-Global exited the picture soon thereafter, having

transferred the notes and their attendant guaranties to Capital

One. Then, when Defendants universally failed to pay up on the

obligations reflected in the notes, Capital One initiated this

action to collect what it was due. The parties filed competing

motions for summary judgment as to liability, and the Court found

in Capital One’s favor. All that remains now is the question of

damages.

On July 11, 2018, Capital One moved for summary judgment as

to damages, seeking both the amounts due on the nine notes and

attorneys’ fees and costs accumulated via these collection

efforts. (Pl.’s Summ. J. Mot., Dkt. No. 113.) The parties

appeared before the Court shortly thereafter, and Defendants asked

for leave to conduct damages discovery before responding to Capital

One’s Motion. The Court granted Defendants one month to conduct

discovery and set a response deadline of September 18, 2018. (See

Hearing Tr. 5:20-25, Dkt. No. 121.) Then, on joint motion of the

parties, the Court extended that deadline to October 5th. That

date came and went, yet Defendants never filed a response to

Capital One’s Motion. The Court must rule without it.

In its Statement of Material Facts (“SOF”), Capital One

explains that prior to the November 1, 2015, maturity date, each

loan was subject to an interest rate of 5.5% per year, calculated

on the basis of a 360-day year comprised of twelve, 30-day months.

(Capital One’s SOF ¶¶ 5, 12, 19, 26, 33, 40, 47, 54, 61.) Once

Defendants failed to repay the loans on the maturity date, however,

Capital One became entitled under those notes’ terms to collect

post-maturity default interest at the “highest rate permitted by

law.” (Id. ¶¶ 7, 14, 21, 28, 35, 42, 49, 56, 63.) As each loan’s

payment history indicates, Capital One has chosen 9.0% as the post-

maturity interest rate. (Id. ¶¶ 7, 14, 21, 28, 35, 42, 49, 56,

63; accord 815 ILCS 205/4 (setting a 9% ceiling on interest rates

agreed to in contracts governed by Illinois law).) In addition,

each note contains a late-charge provision stating that in the

event the signatory fails to pay any amount within ten days of the

due date for said payment, “a late charge of five cents ($0.05)

for each dollar ($1.00) so overdue may be charged by the Lender.”

(Id. ¶¶ 8, 15, 22, 29, 36, 43, 50, 57, 64.) That five-cent charge

effectively amounts to a five-percent late fee on each loan’s

principal.

Defendants, who fail to respond to Capital One’s Motion, do

not dispute any of the above. Because Defendants do not present

any statements of their own controverting those set forth by

Capital One, “[a]ll material facts set forth in [Capital One’s]

statement . . . will be deemed to be admitted.” Friend v. Valley

View Cmty. Unit Sch. Dist. 365U, 789 F.3d 707, 710 (7th Cir. 2015)

(citing N.D. Ill. L.R. 56.1(b)(3)(C)).

Against this backdrop, Capital One provides the three summary

tables reproduced below. These tables showcase the amount due

under each loan as of July 11, 2018, the date Capital One filed

the instant Summary Judgment Motion.

Amounts Due on Elvin Shtayner Company Loans

Borrower Defendant Amount Due — July 11, Per Diem Interest

2018 Post-July 11, 2018

Big 3 Taxi Corp. $1,261,680.69 $250.00

Charley Taxi $313,707.37 $62.22

Corp., II

Elvin’s Taxi Corp. $315,370.27 $62.50

Euphoria Taxi $1,576,850.56 $312.50

Corp.

Harvard Taxi Corp. $315,370.27 $62.50

Twinky’s Taxi $315,370.24 $62.50

Corp.

Total: $4,098,349.40 $812.22

Amounts Due on Stanley Shtayner Company Loans

Borrower Defendant Amount Due — July 11, Per Diem Interest

2018 Post-July 11, 2018

Hymes Taxi Corp. $1,576,850.56 $312.50

Mystic Taxi Corp. $942,793.82 $186.94

Sunrise Taxi Corp. $1,576,850.56 $312.50

Total: $4,096,494.94 $811.94

Amounts Due on All Loans

Loan Pool Amount Due — July 11, Per Diem Interest

2018 Post-July 11, 2018

Elvin Shtayner $4,098,349.40 $812.22

Company Loans

Stanley Shtayner $4,096,494.94 $811.94

Company Loans

Total: $8,194,844.34 $1,624.16

(SOF ¶¶ 67-69.)

II. LEGAL STANDARD

“Legal damages, like liability, can be determined via the

summary judgment mechanism.” Hanover Ins. v. N. Bldg. Co., 751

F.3d 788, 795 (7th Cir. 2014). Summary judgment must be granted

“if the movant shows 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). A genuine issue of material fact

exists if “the evidence is such that a reasonable jury could return

a verdict for the nonmoving party.” Zaya v. Sood, 836 F.3d 800,

804 (7th Cir. 2016) (quoting Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986)). When evaluating summary judgment motions,

courts must view the facts and draw reasonable inferences in the

light most favorable to the nonmovant. Scott v. Harris, 550 U.S.

372, 378 (2007). “Once a party has made a properly-supported

motion for summary judgment, the nonmoving party may not simply

rest upon the pleadings but must instead submit evidentiary

materials that ‘set forth specific facts showing that there is a

genuine issue for trial.’” Siegel v. Shell Oil Co., 612 F.3d 932,

937 (7th Cir. 2010) (quoting FED. R. CIV. P. 56(e)).

III. DISCUSSION

The Court has already found Defendants liable and now because

there are no genuine issues of material fact as to damages, the

Court finds Capital One entitled to the following damages as a

matter of law. The Court has calculated these sums by adding to

the July 11, 2018, amounts the respective per diem multiplied by

142, the number of days between July 11th and today, November 29,

2018, the date the Court enters judgment in this case. Each

guarantor—Elvin, Stanley, and Yasya—shall be jointly and severally

liable with each borrower Defendant on those loans the respective

Shtayners guarantied.

Total Damages Owed by Elvin Shtayner Companies

Borrower Defendant Total Amount Due as of Date of

Judgment: November 29, 2018

Big 3 Taxi Corp. $1,297,180.69

Charley Taxi Corp., II $322,542.61

Elvin’s Taxi Corp. $324,245.27

Euphoria Taxi Corp. $1,621,225.56

Harvard Taxi Corp. $324,245.27

Twinky’s Taxi Corp. $324,245.24

Elvin Shtayner Personal

Guaranty Total: $4,213,684.64

Total Damages Owed by Stanley Shtayner Companies

Borrower Defendant Total Amount Due as of Date of

Judgment: November 29, 2018

Hymes Taxi Corp. $1,621,225.56

Mystic Taxi Corp. $969,339.30

Sunrise Taxi Corp. $1,621,225.56

Stanley Shtayner Personal

Guaranty Total: $4,211,790.42

Total Damages Owed by Yasya Shtayner, Personal Guarantor of All

Nine Loans Recited Above

Loan Pool Amount Due — July 11, 2018

Elvin Shtayner Company Loans $4,213,684.64

Stanley Shtayner Company

Loans $4,211,790.42

Yasya Shtayner Personal

Guaranty Total: $8,425,475.06

These calculations answer the damages question. What remains

are Capital One’s requests for attorneys’ fees and costs. Whether

a party is entitled to fees and costs under a contract is a

substantive issue governed by state law, but the method of

quantifying costs and fees is a procedural issue which, in

diversity cases like this one, is governed by federal law. Taco

Bell Corp. v. Cont’l Cas. Co., 388 F.3d 1069, 1076-77 (7th Cir.

2004). In Illinois, a party is entitled to attorneys’ fees only

when a statute or contract specifically directs them. Prudential

Ins. Co. of Am. v. Curt Bullock Builders, Inc., 626 F. Supp. 159,

170 (N.D. Ill. 1985) (citations omitted) (observing that such terms

could appear in the promissory note itself or in the loan agreement

which accompanies it). Contracts may direct costs as well. See

Penn. Truck Lines, Inc. v. Solar Equity Corp., 127 F.R.D. 127, 128

(N.D. Ill. 1988), aff’d, 882 F.2d 221 (7th Cir. 1989).

Here, the promissory notes and the guaranties specifically

direct fees and costs expended in post-default collection efforts.

(See, e.g., Big 3 Taxi Promissory Note, Ex. 2 to Hussain Aff.,

Dkt. No. 44-2 (“The undersigned, and all persons liable or to

become liable on this Note, agree, jointly and severally, to pay

all costs of collection, including reasonable attorneys’ fees and

disbursements, in case the unpaid principal balance of this Note

. . . is not paid when due[.]”); Elvin Shtayner Big 3 Taxi Guaranty,

Ex. 12 to Hussain Aff., Dkt. No. 44-12 (imposing on guarantor all

liabilities of the borrower, including all interest and

“attorneys’ fees, costs and expenses of collection incurred by the

Lender in enforcing any of such liabilities”).) As such, the Court

need only decide whether the fees and costs sought are reasonable.

When the terms of a contract entitle a party to fees and

costs, that entitlement carries an implied requirement that the

fees sought be “commercially reasonable,” “meaning that a party’s

aggregate costs must be reasonable in light of the stakes of the

case and the opposing party’s litigation strategy.” Sellars

Absorbent Materials, Inc. v. Sustainable Textile Grp., LLC,

No. 11-CV-00400, 2012 WL 2415544, at *1 (E.D. Wis. June 25, 2012)

(citing Matthews v. Wis. Energy Corp., Inc., 642 F.3d 565, 572

(7th Cir. 2011)). “In other words, fees are to be awarded at

market value, and ‘the best evidence of the market value of legal

services is what people pay for it.’” JPMorgan Chase Bank, N.A.

v. PT Indah Kiat Pulp & Paper Corp. Tbk, 729 F. Supp. 2d 1014,

1021-22 (N.D. Ill. 2010) (quoting Balcor Real Estate Holdings,

Inc. v. Walentas-Phoenix Corp., 73 F.3d 150, 153 (7th Cir. 1996)),

aff’d sub nom. JPMorgan Chase Bank, N.A. v. Asia Pulp & Paper Co.,

707 F.3d 853 (7th Cir. 2013). Costs directed under contract must

be reasonable as well. See id.

Capital One seeks $294,897.48 in attorneys’ fees. In support

of that request, Capital One submits invoices and billing sheets

reflecting $283,253.98 of their sought-after sum. Defendants meet

this evidence with silence, so they have clearly not identified

any evidence showing that the requested fees are unreasonable.

Based on the Court’s review of Capital One’s records, the Court

sees nothing unreasonable about the $283,253.98, and so that amount

shall be awarded. Capital One explains that the additional

$11,643.50 it seeks represents legal services rendered in June

2018 but not yet paid as of this Motion’s July 2018 filing date.

(SOF ¶ 75; Browne Decl. ¶ 51, Dkt. No. 118.) Presumably, those

June expenses represent counsels’ work on the instant Motion, which

Capital One filed on July 11, 2018. This Motion was necessary to

advance the litigation, and Capital One could reasonably be

expected to have accumulated some legal fees via the Motion’s

development. And yet, without the aid of billing sheets attesting

to that work, the Court cannot be assured these fees were

reasonable (notwithstanding Defendants’ failure to object). The

Court will accordingly reduce that final $11,643.50 by two-thirds,

to $3,881.17, and then add that reduced amount to the earlier-

described sum to reach a final fee award of $287,135.15. See Vocca

v. Playboy Hotel of Chi., Inc., 686 F.2d 605, 607 (7th Cir. 1982)

(“District courts have broad discretion in making attorney’s fee

awards.”).

Capital One also seeks costs in the amount of $5,322.92. The

sole support Capital One submits for this request is a single

pronouncement, recited without citation to any supporting

evidence, by one of their attorneys. (Browne Decl. ¶ 49 (stating

simply that Capital One paid $5,322.92 in costs).) This will not

do. The Court must be given some insight into the source of costs

to determine their reasonableness. It makes sense that Capital

One accrued some costs over the course of this nearly two-years-

long litigation, but absent some documentation the Court is in no

position to judge these costs with precision. Accordingly, and

noting once more that Defendants do not object to the request for

costs, the Court reduces Capital One’s costs by two-thirds and

awards $1,774.31.

One issue remains. Capital One contends that post-judgment

interest should accrue on all of the amounts ordered above. The

Court agrees. 28 U.S.C. § 1961 recites that “[i]nterest shall be

allowed on any money judgment in a civil case recovered in a

district court . . . at a rate equal to the weekly average 1-year

constant maturity Treasury yield . . . for the calendar week

preceding the date of judgment.” 28 U.S.C. § 1961(a). Said

interest shall compound annually. 28 U.S.C. § 1961(b). Last

week’s average for the 1-year constant maturity treasury yield was

2.67%. U.S. Dep’t of the Treasury, Daily Treasury Yield Curve

Rates (Nov. 27, 2018, 1:44 PM), https://www.treasury.gov/resource-

center/data-chart-center/interest-rates/Pages/TextView.aspx?data

=yield. The Court accordingly imposes that interest rate on all

sums imposed by this judgment.

IV. CONCLUSION

For the reasons stated herein, the Court grants Capital One’s

Motion for Summary Judgment as to damages and imposes awards

against each Defendant as follows: $1,297,180.69 against Big 3

Taxi; $322,542.61 against Charley Taxi Corp., II; $324,245.27

against Elvin’s Taxi Corp.; $1,621,225.56 against Euphoria Taxi

Corp.; $324,245.27 against Harvard Taxi Corp.; $324,245.24 against

Twinky’s Taxi Corp.; $1,621,225.56 against Hymes Taxi Corp.;

$969,339.30 against Mystic Taxi Corp.; and $1,621,225.56 against

Sunrise Taxi Corp. Elvin Shtayner shall be jointly and severally

liable for the damage awards against the first six companies,

totaling $4,213,684.64. Stanley Shtayner shall be jointly and

severally liable for the damage awards against the final three

companies, totaling $4,211,790.42. Yasya Shtayner shall be

jointly and severally liable for the damage awards against all

nine companies, totaling $8,425,475.06. The Court also awards

Capital One $287,135.15 in attorneys’ fees and $1,774.31 in costs.

This judgment shall carry a 2.67% interest rate until it is

satisfied.

IT IS SO ORDERED.

Chttwhe

«Harry D. Leinenweber, Judge

United States District Court

Dated: 11/29/2018

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