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Deer Valley Trucking Inc. v. Lease One Corp.

United States District Court, D. Idaho

January 7, 2015

DEER VALLEY TRUCKING INC., an Idaho corporation, Plaintiffs,
LEASE ONE CORP., a Massachusetts corporation, JOSEPH L. ANGELO, RICK LOPEZ, FIRST FINANCIAL BROKERAGE, INC., a New Jersey corporation, and ROBERT SEARCY, Defendants.


B. LYNN WINMILL, District Judge.

Before the Court is Defendants Lease One Corp, Joseph L. Angelo and Rick Lopez's (collectively, "Lease One") Motion for Partial Summary Judgment (Dkt. 44) and Plaintiff Deer Valley Trucking Inc.'s Motion for Extension of Time to Complete Discovery Pursuant to F.R.C.P. 56(d) (Dkt. 48). The Court heard oral argument on October 21, 2014, and took the matter under advisement. For the reasons set forth below, the Court will grant the motion in part and deny in part. The Court will allow all of Deer Valley's claims to survive except for the racketeering claim. With respect to the racketeering claim, the Court will deny Deer Valley's motion for extension of time to complete discovery and dismiss its racketeering claim.


Plaintiff Deer Valley Trucking Inc. is an Idaho corporation headquartered in Idaho Falls. Deer Valley provides trucking and transportation services to oil companies. In late summer of 2011, Deer Valley sought commercial financing for the acquisition of 100 vacuum trailers, a specialized trailer used to transport oil. Deer Valley had ordered the 100 trailers from CT Fabrication, LLC and was searching for financing to cover the cost. Chapman Aff. ¶ 5, Dkt. 47-2.

Wade Chapman, Deer Valley's CEO, was provided information about Joe Mardesich, a Utah-based broker associated with Defendant Lease One Corporation, as a potential source of funding. Mardisch began negotiating with Deer Valley over the lease of the 100 vacuum trailers. Id. ¶ 8. After receiving Deer Valley's initial financial disclosures, Mardisch turned over negotiations to Lease One's president, Defendant Joseph Angelo, and vice president, Defendant Rick Lopez, who worked in Lease One's headquarters in Lynnfield, Massachusetts. Id. ¶ 9. Lease One proposed to provide the $5, 384, 000.00 Deer Valley needed to lease the vacuum trailers at a "promising interest rate." Compl, ¶ 38, Dkt. 1-1.

On November 3, 2011, Lopez sent an email to Chapman providing Deer Valley with lease documents for signing. The lease document, titled Equipment Lease Agreement, identified Lease One as the lessor and owner of the equipment and provided for a 36-month lease of 100 trailers, at a lease rate of $159, 958.00 per month, with an option to acquire the equipment at the conclusion of the term for 10% of the original purchase price. In addition to monthly payments, the Equipment Lease Agreement required Deer Valley to provide a nonrefundable down payment of $344, 918.00. Equipment Lease Agreement, Dkt. 47-3 at 4.

The nonrefundable nature of the sizable down payment caused Deer Valley consternation. To alleviate these concerns, Angelo and Lopez arranged for a conference call with Deer Valley and Defendant Robert Searcy, president of Defendant First Financial Brokerage, Inc., of New Jersey. Angelo assured Deer Valley that the down payment was nonrefundable only in the event that Deer Valley failed to go through with the lease arrangement provided for in the Equipment Lease Agreement. Chapman Aff. ¶ 16. The individual identifying himself as Searcy on the call represented that First Financial was the source of the money behind the Lease One transaction with Deer Valley. Searcy further represented that he stood ready and willing to execute the necessary documents to release the funds for Lease One to provide the financing as soon as Deer Valley signed the lease agreement and wired the down payment. Id.

Deer Valley claims that none of the individuals on the conference call - Angelo, Lopez, nor Searcy - disclosed the nature of the relationship between Lease One and First Financial. Nor did they disclose that Lease One and First Financial were both brokers and did not provide direct financing. Id. ¶ 18. Based on the representations Angelo, Lopez, and Searcy made, Deer Valley believed that (1) Lease One, with First Financial providing the funds, would lease the equipment to Deer Valley in accordance with the terms of the Equipment Lease Agreement, and (2) the money would be available as soon as documents were signed by Deer Valley and the down payment was wired. Id. ¶¶ 19, 21. Deer Valley therefore wired the down payment of $344, 918.00 and signed the lease agreement and returned it to Lease One.

On December 9, 2011, Deer Valley requested a draw or take town of $488, 566.40 against the promised financing to cover the purchase price of the first ten trailers CT Fabrication was prepared to deliver. Chapmen Aff. ¶¶ 24-25. However, rather than providing the requested financing, Lopez asked Deer Valley to provide the lender with additional information. Id. ¶ 26. According to Deer Valley, this was the first sign that Lease One had misrepresented its ability to provide the financing on the promised terms. Id. ¶ 27.

Although Lease One told Deer Valley on several occasions throughout the month of December that the lease documents were forthcoming "very soon, " Lease One never came through with the promised financing in December. So, on December 29, Deer Valley informed Lease One that it had been forced to seek out other lending sources because it could not wait for funding from Lease One. Id. ¶ 31.

Then, on January 5, 2012, Angelo contacted Deer Valley and again represented that the lease documents were being prepared. Id. ¶ 32. Yet, four days later, on January 9, 2012, Lease One still had not produced the lease documents; instead, Lopez emailed to say that the lender now required tax returns for 2008 and 2009. Id. ¶ 33. Lopez explained that. "[t]his looks like the final piece of the puzzle that is missing before documents are released." January 9 Email, Dkt. 47-3 at 14. Deer Valley immediately responded that 2010 was its first return based on the date of origination. Chapman Aff. ¶ 33. Again, no lease documents were forthcoming. Instead, Lopez emailed on January 12, 2012, requesting year-end financials for 2011, which Deer Valley provided on January 13, 2012. Id. ¶ 34.

On January 24, 2012, First Financial produced a new and separate lease proposal to Deer Valley from a company known as Sentry Financial Corporation. Id. ¶ 35; Lease Proposal, Dkt. 47-3 at 16-17. The lease proposal called for a 60-month term rather than 36 months, required a $35, 000 commitment fee, and provided an option to purchase at the end of the term for fair market value. Lease Proposal, Dkt. 47-3 at 16-17. Lease One was not a party to this Lease Proposal submitted by Sentry Financial Corporation. Id.

Although the terms of the Lease Proposal were different from the original lease agreement provided by Lease One, Deer Valley signed this second lease contract on January 29, 2012, and made a $25, 000 deposit. Angelo Decl. ¶ 8; Lease Proposal, Dkt. 47-3 at 16-17. However, the next week, Deer Valley informed Lease One that it had obtained financing elsewhere and was not going through with the deal with Lease One. Angelo Decl. ¶ 11.

Deer Valley maintains that the terms of the new proposal were "substantially less favorable than and entirely inconsistent with the terms originally promised by Lease One, and [Deer Valley] elected to not obtain financing through Sentry. Id. ¶ 36. "Specifically, the total cost to [Deer Valley] of the new proposal was approximately $900, 000 greater than the cost under the Agreement, the period of the lease was 60 months rather than 36 months, and the end-of-term options were considerably less ...

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