USCA1 Opinion
UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
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No. 97-1252
CADLE COMPANY,
Plaintiff, Appellee,
v.
JOHN J. HAYES, III,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joyce London Alexander, U.S. Magistrate Judge]
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Before
Selya, Circuit Judge,
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Cyr, Senior Circuit Judge,
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and Keeton,* District Judge.
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John J. Kuzinevich, with whom Ellen Rappaport Tanowitz and
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Kuzinevich & Miller, P.C. were on brief, for appellant.
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Warren J. Hurwitz, with whom Goodman, Greenzang & Hurwitz
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was on brief, for appellee.
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June 26, 1997
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*Of the District of Massachusetts, sitting by designation.
SELYA, Circuit Judge. This diversity case involves a
SELYA, Circuit Judge.
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$150,000 promissory note, the conditions of its repayment, and a
heated dispute between the parties about whether the debt has
been satisfied. The court below thought not and entered summary
judgment in favor of the noteholder. We affirm.
I. A TALE OF TWO LETTERS
I. A TALE OF TWO LETTERS
In the summer of 1990, defendant-appellant John J.
Hayes, III, executed a promissory note for $150,000, secured by a
mortgage on premises owned by a real estate trust that he
controlled.1 The lender subsequently failed and plaintiff-
appellee Cadle Company (C-Co.) acquired the note (which was then
in arrears) from the Federal Deposit Insurance Corporation
(FDIC). Cecil C. Cadle (Cadle), C-Co.'s vice president, informed
Hayes of the transfer and the parties commenced negotiations.
The preliminary haggling is of no consequence because the parties
reached an agreement and reduced it to writing. Cadle wrote a
letter on February 2, 1993, which stated in pertinent part:
This will confirm our agreement that The
Cadle Company will delay the repayment period
of the subject loan until February 10, 1994
if we receive $80,000 by March 2, 1993.
The Cadle Company purchased your loan
from the FDIC in liquidation of Boston Trade
Bank and has full authority to release the
lien on the real estate in return for this
$80,000 payment. We hereby agree to release
the lien upon payment of the $80,000 by March
2, 1993.
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1There is some uncertainty about whether Hayes signed the
note personally or in his capacity as a trustee of the real
estate trust. The point is of purely academic interest, however,
as Hayes, acting for himself, also executed an unlimited
guaranty.
2
The appellant signed the letter the same day, thereby indicating
his assent to the proposed terms.
On March 3, Landmark Bank mailed a bank check for
$80,000 to C-Co.2 The accompanying transmittal letter, over the
signature of James Goodrich, a Landmark vice president, stated in
its entirety: "Enclosed is a check for $80,000 to satisfy in
full the loan you acquired from the FDIC between the Boston Trade
Bank and John J. Hayes. Please execute a release and forward it
to me as soon as possible. Thank you very much for your help."
Cadle endorsed and deposited the check and forwarded a release of
the mortgage lien as previously agreed. Hayes made no further
payments.
In September 1994 C-Co. sued Hayes and a co-guarantor,
Kevin O'Reilly, in federal district court, seeking to recover the
balance due on the promissory note, plus accrued interest and
collection costs.3 The battle lines were quickly drawn: Hayes
insisted that the $80,000 payment had satisfied in full his
obligations under the note, whereas C-Co. insisted with equal
adamance that the payment did no more than comply with the terms
of the February 2 letter agreement (which merely deferred, rather
than canceled, the obligation to pay the balance due under the
note).
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2Although this check was sent one day later than the outside
date specified in the February 2 letter agreement, neither party
contends that this delay matters and we deem any discrepancy to
be waived.
3O'Reilly is not a party to this appeal and we abjure any
further reference to him.
3
To make a tedious tale tolerably terse, the parties
agreed to have a magistrate judge, rather than a district judge,
preside over the case. See 28 U.S.C. 636(c)(1) (1994); Fed. R.
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Civ. P. 73(b). Thereafter, C-Co. moved for summary judgment,
proffering, among other supporting documents, the February 2
letter agreement. Hayes filed an opposition and an affidavit.
When C-Co. produced Goodrich's sworn statement that he had not
negotiated with either Hayes or Cadle about repayment of the loan
and that he had not been privy to any agreement that the $80,000
payment would discharge the entire debt, Hayes filed a
supplemental affidavit. The magistrate reviewed these and other
materials, discerned no genuine issue of material fact, granted
C-Co.'s motion, and entered judgment for a sum certain. This
appeal followed.
II. ANALYSIS
II. ANALYSIS
This appeal requires little more than an inquiry into
the permutations of the summary judgment standard. We begin with
some general principles and then move to a more case-specific
appraisal.
A.
A.
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At the summary judgment stage, the trial court examines
the entire record "in the light most flattering to the nonmovant
and indulg[es] all reasonable inferences in that party's favor."
Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir.
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1994). Only if the record, viewed in that manner and without
regard to credibility determinations, reveals no genuine issue as
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to any material fact may the court enter summary judgment. See
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Greenburg v. Puerto Rico Maritime Shipping Auth., 835 F.2d 932,
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936 (1st Cir. 1987).
The summary judgment machinery operates in two phases.
First, the movant must make a preliminary showing that there is
no genuine issue of material fact which requires resolution in
the crucible of a trial. Once this showing has been made, the
burden shifts to the nonmovant to demonstrate, through specific
facts, that a trialworthy issue remains. See National
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Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir.
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1995); Maldonado-Denis, 23 F.3d at 581.
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For the purpose of summary judgment, an issue of fact
is "genuine" if it "may reasonably be resolved in favor of either
party." Maldonado-Denis, 23 F.3d at 581 (citations and internal
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quotation marks omitted). For the same purpose, "material" facts
are those which possess "the capacity to sway the outcome of the
litigation under the applicable law." National Amusements, 43
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F.3d at 735. Still, establishing a genuine issue of material
fact requires more than effusive rhetoric and optimistic surmise.
"If the evidence [adduced in opposition to the motion] is merely
colorable, or is not significantly probative, summary judgment
may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
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249-50 (1986) (citations omitted). In other words, the "evidence
illustrating the factual controversy cannot be conjectural or
problematic; it must have substance in the sense that it limns
differing versions of the truth which a factfinder must resolve
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at an ensuing trial." Mack v. Great Atl. & Pac. Tea Co., 871
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F.2d 179, 181 (1st Cir. 1989). "[C]onclusory allegations,
improbable inferences, and unsupported speculation" will not
suffice. Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5,
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8 (1st Cir. 1990).
We proceed to apply these tested principles to the
record before us, mindful that we review the lower court's order
de novo. See Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st
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Cir. 1990).
B.
B.
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The case for summary judgment is simple and
straightforward. C-Co. says that Hayes owed money on the
promissory note; that it agreed to defer a portion of the
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indebtedness and release a security interest if Hayes made a
partial payment of $80,000; that the terms of this deferral were
commemorated in the February 2 letter agreement; and that, the
period of the deferment having elapsed, Hayes must now pay the
balance due under the note. Hayes does not deny the authenticity
of the February 2 letter agreement4 but nonetheless contends that
a genuine issue of fact exists as to whether the $80,000 payment
was made and accepted in full satisfaction of the entire
indebtedness. We think that the purported "proof" which Hayes
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4To be sure, the appellant alludes vaguely to certain prior
negotiations, but these cannot influence our decision as any such
negotiations were clearly superseded by the execution and
delivery of the letter agreement. See, e.g., Brennan v. Carvel
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Corp., 929 F.2d 801, 806 (1st Cir. 1991); Amerada Hess Corp. v.
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Garabedian, 617 N.E.2d 630, 634 (Mass. 1993).
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has assembled to substantiate his position is of a caliber which
courts regularly have held insufficient to defeat a summary
judgment motion.
On this record, certain facts cannot be gainsaid: the
promissory note was validly executed, it was not paid according
to its tenor, and its ownership was properly transferred to C-Co.
The February 2 letter agreement commemorates the parties' mutual
assent to an alternative payment arrangement and that document
contains the signatures of both parties signatures which Hayes
does not allege were procured by fraud, chicanery, coercion,
duress, or other untoward means. That agreement, on its face, is
clear and unambiguous. Moreover, it reflects valid consideration
given and received. It nowhere suggests that an $80,000 payment
by Hayes will discharge the indebtedness in full; to the
contrary, it states quite plainly that the receipt of $80,000 on
or before a day certain will enable the obligor to defer
repayment of the underlying debt for approximately one year and
will bring about the immediate release of the mortgage lien which
secured the debt.
The short of it is that, by presenting the letter
agreement in support of its motion for brevis disposition, C-Co.
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discharged its initial burden under Rule 56. The question, then,
is whether Hayes, as the party opposing summary judgment,
succeeded in adducing specific facts demonstrating that a
trialworthy issue remains on some material fact.
Hayes argues that there is a genuine issue as to the
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nature of the $80,000 payment. But this argument comprises more
cry than wool. First, he labors to create the impression that
the parties entered into a series of negotiations apart from the
February 2 letter agreement, and that these negotiations
culminated in a new understanding that a one-time payment of
$80,000 would discharge the entire debt. The problem with this
approach is that it consists entirely of gauzy generalities: in
his affidavits, Hayes does not say when or how this arrangement
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was consummated. Moreover, he does not claim that he and Cadle
entered into such an arrangement personally; indeed, he does not
even suggest that the two of them discussed the matter at all
between February 2 and March 3. He does state that Cadle and
Goodrich "had numerous conversations" during February of 1993,
but this statement which in all events is apparently based on
something less than personal knowledge proves nothing. Hayes
nowhere relates the details of any such conversations, nor does
he indicate that Goodrich was authorized to act as an agent on
his behalf. In the absence of specific facts, Hayes' innuendoes,
heatedly denied by C-Co. and refuted by Goodrich, are inadequate
to block summary judgment.5 See, e.g., Maldonado-Denis, 23 F.3d
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at 583; Vega v. Kodak Caribbean, Ltd., 3 F.3d 476, 479-81 (1st
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5Withal, the appellee's attempt to discount Hayes'
affidavits as "self-serving" misses the mark. A party's own
affidavit, containing relevant information of which he has first-
hand knowledge, may be self-serving, but it is nonetheless
competent to support or defeat summary judgment. See Nereida-
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Gonzalez v. Tirado-Delgado, 990 F.2d 701, 706 (1st Cir. 1993).
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The difficulty with Hayes' affidavits is not that they are self-
serving but that they neither contain enough specifics nor speak
meaningfully to matters within Hayes' personal knowledge.
8
Cir. 1993); Mesnick v. General Elec. Co., 950 F.2d 816, 825-26
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(1st Cir. 1991).
The appellant's ace in the hole, as he envisions it, is
Goodrich's transmittal letter. We do not believe that this
communiqu , repudiated by its author, can trump the February 2
letter agreement. After all, Goodrich has signed an affidavit
flatly rejecting Hayes' interpretation of his (Goodrich's) letter
and asserting that he never negotiated any agreement with either
party as to the nature of the $80,000 payment. Since Goodrich's
March 3 epistle lacks any evidence of mutual assent by the
parties, and since the record does not otherwise supply any such
evidence, the epistle cannot carry the day.6
To be sure, Hayes states in the climactic paragraph of
his main affidavit that:
I believe that the Cadle Company took the
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$80,000.00 from Landmark Bank under the terms
of an agreement between the Cadle Company and
the Bank that the $80,000.00 would constitute
payment in full of all of the obligations of
the trust and the guarantors under the terms
of the Note. [Emphasis supplied.]
However, neither Cadle nor Landmark acknowledge that any such
agreement ever existed. Thus, Hayes' contrary conclusion lacks
force. Statements made upon information and belief, as opposed
to personal knowledge, are not entitled to weight in the summary
judgment balance. See Griggs-Ryan v. Smith, 904 F.2d 112, 117-18
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(1st Cir. 1990); see also Fed. R. Civ. P. 56(e).
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6The fact that C-Co. deposited the $80,000 check proves
nothing, as that action was entirely consistent with the
provisions of the February 2 letter agreement.
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In sum, Hayes' "proof" is bereft of any significant
probative value. Consequently, we agree with the lower court
that a reasonable factfinder could not conclude on this record
that the clear and unambiguous agreement between the parties made
in February 1993 had been varied thereafter.
C.
C.
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Shifting rhetorical gears, the appellant makes another
tour around the track, attempting to persuade us that an accord
and satisfaction existed between the parties which relieved him
of any further obligations under the promissory note. This is
the same old whine in a slightly different bottle.
Under Massachusetts law, an accord and satisfaction
exists when:
(1) [] there has arisen between the
parties a bona fide dispute as to the
existence or extent of liability; (2) []
subsequent to the arising of that dispute the
parties entered into an agreement under the
terms of which the dispute is compromised by
the payment by one party of a sum in excess
of that which he admits he owed and the
receipt by the other party of a sum less in
amount than he claims is due him, all for the
purpose of settling the dispute; and (3) a
performance by the parties of that agreement.
Rust Eng'g Co. v. Lawrence Pumps, Inc., 401 F. Supp. 328, 333 (D.
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Mass. 1975). The evidence before us shows as a matter of law
that no accord and satisfaction transpired here.
In the first place, the record reveals no dispute as to
the extent of Hayes' liability under the promissory note at the
time of this asserted accord; the amount of indebtedness was not
then in question, merely the method by which repayment would
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occur. In the second place, the appellant has proffered no
significantly probative evidence only Hayes' bare allegations,
already considered and found wanting that the parties entered
into the sort of mutual agreement that could form the basis for
an accord and satisfaction.7 Massachusetts law is pellucid that,
in the absence of convincing evidence of mutual assent, mere
partial payment of an existing debt does not constitute an accord
and satisfaction. See Emerson v. Deming, 23 N.E.2d 1016, 1018-19
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(Mass. 1939); Lipson v. Adelson, 456 N.E.2d 470, 471-74 (Mass.
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App. Ct. 1983).
III. CONCLUSION
III. CONCLUSION
We need go no further. A party faced with a properly
documented summary judgment motion should not be able to keep his
case on life support merely by hurling conclusory allegations in
the movant's direction. So it is here: the appellant's
rhetorical flourishes are not sufficiently probative to create a
genuine issue of material fact concerning the nature of the
$80,000 payment. Hence, the magistrate appropriately granted C-
Co.'s motion for summary judgment.
Affirmed. Costs to appellee.
Affirmed. Costs to appellee.
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7On this point, Hayes' case stands in stark contrast to Bud
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McDevitt Real Estate, Inc. v. Corona, 537 N.E.2d 608, 609 (Mass.
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App. Ct. 1989), in which the Appeals Court held that a letter
from one party to another, explicitly stating that cashing an
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enclosed check would constitute settlement of any and all claims,
ripened into an accord and satisfaction when the check was
deposited.
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