Specialty Tires Of America, Inc. v. The Cit Group/Equipment Financing, Inc.

82 F.Supp.2d 434 (2000)

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Nature of the Case

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Facts

In December 1993, D entered into a sale/leaseback with Condere for eleven tire presses located at Condere's tire plant. D purchased the presses from Condere and leased them back to it for a term of years. D retained title to the presses, as well as the right to possession in the event of a default by Condere. In May 1997, Condere ceased making the required lease payments and filed for Chapter 11 bankruptcy. In September 1997, Condere rejected the executory portion of the lease agreement, and the bankruptcy court lifted the automatic stay as to D's claim involving the presses. D now had eleven tire presses it needed to sell. The CEO of Condere. Taylor stated his desire that the presses be removed quickly and advised D on how they might be sold. D brought two potential buyers to Condere's plant, where representatives of Condere conducted them on a tour of the facility. Subsequently, Taylor and D negotiated concerning Condere's purchase of the presses, but negotiations fell through, after which Taylor again offered his assistance in locating another buyer. D decided to advertise the presses. P responded, and in early December 1997, representatives of P, D, and Condere met to conduct an on-site inspection of the equipment. Condere's representative discussed with D's personnel and in the presence of P's agents the logistics concerning the removal of the presses. At that meeting, Condere's representative told P and D that D had an immediate right to possession of the tire presses, and the right to sell them. In December 1997, P and D entered into a contract for the sale of the presses for $250,000. D warranted its title to and right to sell the presses. D attempted to gain access to the presses to have them rigged and shipped to P. Condere refused to allow this equipment to be removed from the plant. Condere had just tendered a check to D for $ 224,000, without the approval of the bankruptcy court, in an attempt to cure its default under the lease. D rejected the offer and promptly filed a complaint in replevin to obtain possession. Condere then posted a bond and the replevin court removed the action from the expedited list, scheduling a case management conference for April 1998. D then advised P that the presses were subject to the jurisdiction of the bankruptcy court and suggested that P either withdraw its claim to the equipment and negotiate with D for a sum of liquidated damages or make a bid for the presses at any auction that might be held by that court. P affirmed the existing contract, demanding performance. The replevin court found that Condere wrongfully retained possession of the presses and that D is entitled to remove them immediately. D has informed P that it is still willing to deliver the presses as soon as it gains possession, and P has indicated its interest in accepting them, in a 'partial' settlement of its claims. Both parties moved for summary judgment.