# Mack Financial Services v. Ackel

> District Court, E.D. Louisiana · June 10, 2021

URL: https://www.frixlaw.com/law-library/cases/10186757

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** June 10, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10186757

## How later opinions describe it (automated extraction)

- finding denial of writ of sequestration to be a moot issue because prevailing litigant was able to collect costs through other means

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

MACK FINANCIAL SERVICES, ET AL CIVIL ACTION
VERSUS NO. 20-2814
c/w 21-669
GEORGE L. ACKEL III, ET AL SECTION "B"(5)
ORDER AND REASONS
Before the Court is plaintiffs’ Motion for Summary Judgment
(Rec. Doc. 17). No opposition or response was filed by defendants.
For the following reasons,
IT IS ORDERED that the motion (Rec. Doc. 17) is GRANTED;
IT IS FURTHER ORDERED that the Court shall retain jurisdiction
to decide plaintiffs’ motion for attorney’s fees, provided that
the motion and supporting materials are filed within fourteen (14)
days of this order and in accordance with local rules.
FACTS OF THE CASE AND PROCEDURAL HISTORY
This suit arises from a breach of guaranty claim wherein the
defendants Fleetstar, LLC (“Fleetstar”), George J. Ackel III
(“Ackel”), and Ackel Construction Company (“Ackel
Construction”)(collectively “defendants”) allegedly failed to make
payments owed to plaintiffs Mack Financial Services, a division of
VFS US LLC (“Mack Financial”) and Volvo Financial Services, a
division of VFS US LLC (“Volvo Financial”)(collectively
“plaintiffs”). Rec. Doc. 1.
On or about August 17, 2018, Fleetstar allegedly executed a
Master Loan and Security Agreement (“Master Agreement”) in favor
of Mack Financial. Rec. Doc. 17-3 at 1. Fleetstar executed a

secured promissory note and schedule (“Schedule 001 Contract”)
through which Fleetstar borrowed the principal amount of $547,708
from Mack Financial to finance its purchase of four 2019 Mack
Pinnacle 64T Daycabs (“Schedule 001 Equipment”). Id. at 1-2.
Fleetstar allegedly agreed to repay the amount borrowed plus
interest in 60 monthly payments of $10,713.97. Id. at 2.
Accordingly, to secure the payment due under the Schedule 001
Contract, Fleetstar allegedly granted Mack Financial a security
interest in the Schedule 001 Equipment (“Schedule 001
Collateral”), which Mack Financial perfected on August 21, 2018.
Id.
On or about February 28, 2018, A & Brothers Construction

Company of Louisiana, LLC (“A & Brothers”) executed a credit sales
contract (“Schedule 003 Contract”) through which A & Brothers
borrowed the principal amount of $127,436.77 from Old River of New
Orleans, LLC (“Old River”) to finance its purchase of a 2018 Mack
GU13 truck with 2018 OX Body (“Schedule 003 Equipment”). Id. at 3.
A & Brothers allegedly agreed to repay the amount borrowed plus
interest in 72 monthly installments of $2,524.01. Id. To secure
payments due under the Schedule 003 Contract, A & Brothers
allegedly granted Old River a security interest in the Schedule
003 Equipment (“Schedule 003 Collateral”). Id.
On or about February 28, 2018, A & Brothers assigned its

rights and interests in Schedule 003 Contract and Collateral to
Mack Financial. Id. On July 10, 2018, Mack Financial perfected its
interest in the Schedule 003 Collateral. Id. On September 18, 2018,
Mack Financial further perfected its interest in the Schedule 003
Collateral by filing a UCC-1 Financing Statement with the Louisiana
Secretary of State. Id. at 3-4.
On or about April 10, 2018, A & Brothers executed a credit
sales contract (“Schedule 004 Contract”) through which A & Brothers
borrowed the principal amount of $117,369.45 from Old River to
finance its purchase of a 2018 Mack GU713 truck (“Schedule 004
Equipment”). Id. at 4. A & Brothers allegedly agreed to repay the
amount borrowed plus interest in 72 monthly payments of $2,318.47.
Id. Accordingly, to secure payments due under the Schedule 004

Contract, A & Brothers allegedly granted Old River a security
interest in the Schedule 004 Equipment (“Schedule 004
Collateral”). Id.
On that same date, Old River assigned its rights and interests
in the Schedule 004 Contract and Collateral to Mack Financial. Id.
On April 19, 2018, Mack Financial perfected its interest in the
Schedule 004 Collateral. Meanwhile, on or about June 29, 2018, A
& Brothers merged with Fleetstar, with Fleetstar being the
surviving entity. Id. at 4-5.
On or about September 5, 2018, Fleetstar executed a secured

promissory note (“Schedule 005 Contract”) through which Fleetstar
borrowed the principal amount of $335,042.94 from Volvo Financial
to finance its purchase of two 2019 Volvo VHD84F trucks with an
attached 16 ft. steep dump bed (“Schedule 005 Equipment”). Id. at
5. Fleetstar allegedly agreed to repay the amount borrowed plus
interest in 60 monthly payments of $6,579.07. Id. Accordingly,
Fleetstar allegedly granted Volvo Financial a security interest in
the Schedule 005 Equipment (“Schedule 005 Collateral”), which was
properly perfected on September 21, 2018 and September 24, 2018.
Id. at 5-6. Volvo Financial further perfected its interest in the
Schedule 005 Collateral by filing a UCC-1 Financing Statement with
the Louisiana Secretary of State on September 11, 2018. Id.
On or about August 17, 2018, defendants Ackel and Ackel

Construction executed a continuing guaranty, pursuant to which,
for acknowledged consideration, guaranteed the full, prompt and
complete payment and performance of all sums owed by Fleetstar to
Mack Financial under Schedule 001, Schedule 003, and Schedule 004
Contracts (“Continuing Guaranty 001”). Id. at 6.
On or about September 5, 2018, Ackel and Ackel Construction
likewise executed a continuing guaranty, pursuant to which, for
acknowledged consideration, guaranteed the full, prompt, and
complete payment and performance of all sums owed by Fleetstar to
Volvo Financial under Schedule 005 Contract (“Continuing Guaranty
002”). Id.
All contracts provided that Fleetstar would be in default if

it failed to pay any amount due to Mack Financial or Volvo
Financial, and upon default, the latter may, at its option, declare
all indebtedness due to it immediately due and, without notice,
demand, or legal process, take possession of the collateral. Rec.
Doc. 1 at 9.
On April 2, 2019, Fleetstar filed a voluntary petition under
Chapter 11 of Title 11 of the United States Code in the United
States Bankruptcy Court for the Eastern District of Louisiana. Id.
at 8. Subsequently, on February 5, 2020, the bankruptcy court
granted plaintiffs’ motion to lift the stay, specifically as to
the Schedule 001, Schedule 003, Schedule 004 and Schedule 005
Collateral. Id. The court’s decision to grant the motion allowed
plaintiffs to pursue the underlying collateral. Id.

In an effort to avoid judicial intervention, plaintiffs
allegedly contacted Fleetstar to see if it would voluntarily
surrender the collateral. Rec. Doc. 17-3 at 7. In response, Ackel
Construction sent plaintiffs an invoice for storage of the
collateral and informed plaintiffs that they would not turn over
the collateral until the invoice was paid. Id. Although plaintiffs
disputed liability on the invoice, they agreed to pay the purported
“storage costs” to attempt to effectuate immediate return of the
collateral. Id. at 8. Despite this agreement, plaintiffs allege
that Ackel Construction and Fleetstar did not return the collateral
and ceased further communication. Id.

On October 15, 2020, plaintiffs filed a complaint against
Ackel and Ackel Construction. Rec. Doc. 1. Plaintiffs alleged that
Fleetstar defaulted under the terms of the Schedule 001, Schedule
003, and Schedule 004 Contracts (“Mack Financial Contracts”) for
failure to pay any amount due thereunder. Id. According to
plaintiffs, as of March 30, 2021, the total balance due under the
Mack Financial Contracts was $845,915.28 plus interest and late
fees, reasonable attorney’s fees, and all costs of the proceedings.
Rec. Doc. 17-3 at 12-13.
Plaintiffs also alleged that Fleetstar defaulted under the
terms of the Schedule 005 Contract (“Volvo Financial Contract”)
for failure to remit payments due thereunder. Rec. Doc. 1 at 9.

According to plaintiffs, as of March 30, 2021, the balance due on
the Volvo Financial Contract was $349,013.84, plus interest and
late fees, reasonable attorney’s fees, and all costs of the
proceedings. Rec. Doc. 17-3 at 13.
On October 16, 2020, plaintiffs filed a motion for writ of
sequestration against Ackel and Ackel Construction, requesting
that the collateral be sequestered. Rec. Doc. 3. On November 12,
2020, this Court dismissed the motion without prejudice because
the plaintiffs failed to indicate whether the property was within
the defendants’ possession. See Rec. Doc. 8.
On April 1, 2021, plaintiffs filed a separate lawsuit against

Fleetstar based on the same contracts and collateral, seeking
recognition and enforcement of their purported security rights.
Mack Financial Services, et al v. Fleetstar, LLC, (CA 21-669), ECF
No. 1. Plaintiffs prayed that the Court’s recognition and
enforcement of their security interests would permit them to seize
the collateral which would be sold at private sale in satisfaction
of the amounts owed by leetstar. Id. at 11. On May 7, 2021, this
Court consolidated the two related actions. Rec. Doc. 18.
On April 4, 2021, plaintiffs filed the instant motion for
summary judgment against Ackel and Ackel Construction (Rec. Doc.
20), alleging that there is no genuine issue of material fact that
Fleetstar, Ackel, and Ackel Construction defaulted on the

underlying contracts and thus plaintiffs are entitled to
recognition and enforcement of their security interests in and to
the relevant collateral. Rec. Doc. 20 at 1. Defendants failed to
file any response to the motion for summary judgment.1
LAW AND ANALYSIS
A. Summary Judgment Standard

1 It appears that Fleetstar never retained counsel to represent its corporate
interests in this matter, which is strictly prohibited by the Fifth Circuit.
See Southwest Express Co. v. Interstate Commerce Comm’n, 670 F.2d 53, 55 (5th
Cir. 1982)(“A corporation can appear in a court of record only by an attorney
at law.”).
Pursuant to Federal Rule of Civil Procedure 56, summary
judgment is appropriate when “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (quoting Fed. R. Civ. P. 56(c)). A genuine issue of material
fact exists if the evidence would allow a reasonable jury to return
a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). As such, the court should view all facts
and evidence in the light most favorable to the non-moving party.
United Fire & Cas. Co. v. Hixon Bros. Inc., 453 F.3d 283, 285 (5th
Cir. 2006).
Courts are discouraged from automatically granting a motion
for summary judgment simply because it is unopposed. Skinner v.
Schlumberger Technology Corp., No. 13-03146, 2014 WL 12543925, at

*1 (W.D.La. Nov. 21, 2014). Thus, the movant is still required to
establish the absence of a genuine issue of material fact, and if
he fails to do so, the court must deny the motion, even if there
was no response. Id. (citing Hetzel v. Bethlehem Steel Corp., 50
F.3d 360, 362 n. 3(5th Cir. 1995)). Nevertheless, in the absence
of an opposition to summary judgment, the court may deem the
movant’s statement of facts as undisputed. Loeber v. Bay Tankers,
Inc., 924 F.2d 1340, 1345 (5th Cir. 1991)(per curiam), cert.
denied, 502 U.S. 819 (1991); see also Fed. R. Civ. P. 56(e).
Furthermore, “the court has no obligation to sift through the
record in search of evidence to support the nonmovant’s opposition
to the motion for summary judgment.” Morgan v. Federal Exp. Corp.,

114 F.Supp.3d 434, 437 (5th Cir. 2015)(internal quotes omitted).
B. Breach of Guaranty Claim
As provided in the underlying contracts and continuing
guaranties, the law of the state of North Carolina shall govern.
Rec. Doc. 17-5 at 4; Rec. Doc. 17-13 at 3. Under North Carolina
law, a continuing guaranty is defined as “a guaranty the object of
which is to enable the principal debtor to have credit over an
extended time and to cover successive transactions.” Amoco Oil Co.
v. Griffin, 78 N.C.App. 716, 718, 338 S.E.2d 601, 602 (1986)(citing
Hickory Novelty Co. v. Andrews, 188 N.C. 59, 123 S.E. 314 (1924)).
“A guaranty of payment is an absolute promise to pay the debt of
another if the debt is not paid by the principal debtor.” Amoco
Oil, 78 N.C.App. at 718, 338 S.E.2d at 602. In the event of a

breach of guaranty, “the creditor’s cause of action against the
guarantors is separate and independent of the obligation of the
principal debtor, and it ripens immediately upon the failure of
the principal debtor to pay the debt at maturity.” Cameron-Brown
Capital Corp. v. Spencer, 31 N.C.App. 499, 502, 229 S.E.2d 711,
712 (1976). “The creditor need not have diligently prosecuted the
principal debtor without success before seeking payment from the
guarantor of payment.” Id.
To prevail in a claim for breach of guaranty, the plaintiff

must show (1) the existence of a valid contract and (2) breach of
the terms of the contract. Poor v. Hill, 138 N.C.App. 19, 26, 530
S.E.2d 838, 843 (2000). In North Carolina, a valid contract
requires assent, mutuality of obligation, and definite terms.
Charlotte Motor Speedway, LLC v. County of Cabarrus, 230 N.C.App.
1, 7, 748 S.E.2d 171, 176 (2013).
In similar unopposed motions for summary judgment filed by
plaintiffs, courts have generally granted the requested relief
upon satisfaction that the evidence establishes the defendant’s
default and subsequent breach of continuing guaranty. VFS U.S. LLC
v. Abel Property Improvements, LLC, No. 09-1096, 2010 WL 445936
(W.D.La. Feb. 5, 2010); VFS US LLC v. Wooten, No. 3:09-CV-1880-O,
2010 WL 11570202 (N.D.Tex. Dec. 17, 2010); VFS U.S. LLC v. J & F
Excavating, Inc., No. 3:10-00810, 2011 WL 703550 (M.D.Tenn. Feb.

17, 2011); Volvo Financial Services v. Gartner, No. CIV 08-4196-
RAL, 2010 WL 1872920 (D.S.D. May 4, 2010).
Regarding the Mack Financial Contracts, plaintiffs offer
Continuing Guaranty 001 and the sworn declaration of their
Bankruptcy and Litigation Specialist Ashley Bullins, who is the
custodian of records pertaining to the Fleetstar Account. Rec.
Docs. 17-16; 17-4. By executing Continuing Guaranty 001, Ackel and
Ackel Construction jointly and severally guaranteed Fleetstar’s
full and complete performance in repaying its loans and
acknowledged plaintiffs’ right to proceed against them directly to
satisfy any outstanding obligation. Id. at 1. The Master Agreement

expressly provided that any failure by the borrower or its
guarantor to make a payment when due constitutes an “event of
default.” Rec. Doc. 17-5 at 3. As such, Bullins testifies that
Mack Financial never received any payment by Fleetstar, Ackel or
Ackel Construction and that Fleetstar defaulted under the terms of
the Master Agreement. Rec. Doc. 17-4 at 6.
The undisputed facts clearly establish that the parties
executed a valid guaranty agreement. By defaulting on the payments
owed to Mack Financial, Fleetstar breached under the terms of the
Master Agreement and triggered Ackel and Ackel Construction’s
liability for the unpaid aggregate amount of $845,915.28. Further,

Ackel and Ackel Construction’s failure to pay Mack Financial placed
them in breach of Continuing Guaranty 001. Thus, we find that no
genuine issue of material fact exists as to the breach of guaranty
claim related to the Mack Financial Contracts.
Regarding the Volvo Financial Contract, plaintiffs also offer
Continuing Guaranty 002 as well as Bullins’ declaration. Rec. Docs
17-17; 17-4. In Continuing Guaranty 002, defendants jointly and
severally guaranteed Fleestar’s full and complete repayment to
Volvo Financial. Rec. Doc. 17-17 at 1. Likewise, the guaranty
clearly sets forth defendants’ acknowledgment, as Fleestar’s
guarantors, that plaintiffs have the right to proceed against them
directly to satisfy any outstanding obligation. Id. The Volvo

Financial Contracts also provided that any failure by the borrower
or its guarantor to make a payment when due constituted “an event
of default.” Rec. Doc. 17-13 at 3. Bullins’ testimony confirms
plaintiffs’ allegation that Volvo Financial never received any
payment by Fleetstar, Ackel or Ackel Construction, and as a result,
Fleetstar defaulted under the contract’s terms. Rec. Doc. 17-4 at
7.
As it pertains to the Volvo Financial Contract, the undisputed
facts establish that the parties executed a valid guaranty
agreement. By defaulting on the payments owed to Volvo Financial,
Fleetstar breached under the terms of the Volvo Financial Contract
and triggered Ackel and Ackel Construction’s liability for the

unpaid aggregate amount of $349,013.84. Ackel and Ackel
Construction’s failure to pay Volvo Financial placed them in breach
of Continuing Guaranty 002. Therefore, no genuine issue of material
fact exists as to the breach of guaranty claim related to the Volvo
Financial Contract.
Upon review of the plaintiffs’ motion and the attached summary
judgment evidence supporting plaintiffs’ assertion that defendants
are liable for the amounts claimed, summary judgment in favor of
Mack Financial and Volvo Financial is proper. As such, plaintiffs
are entitled to the amounts owed for the default of Fleetstar as
well as attorney’s fees and costs. See Wooten, 2010 WL 11570202,
at *4 (concluding that plaintiffs may be awarded attorney’s fees

and costs as permitted by Section 6-21.2 of the North Carolina
General Statutes). Furthermore, because judgment shall be awarded
to plaintiffs to satisfy the amounts owed by defendants,
plaintiffs’ pre-consolidation writ of sequestration against
Fleetstar and all other pending motions shall be DISMISSED AS MOOT.
See Amar v. Whitley, 100 F.3d 22, 23 (5th Cir. 1996)(finding denial
of writ of sequestration to be a moot issue because prevailing
litigant was able to collect costs through other means).
New Orleans, Louisiana this 9th day of June, 2021

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10186757. Public record. Not legal advice.