United States District Court, District of Columbia
ALAN KAY, Magistrate Judge.
Pending before this Court is Plaintiff V. James Adduci's Motion for Summary Judgment and Statement of Material Facts as to which there is no genuine issue (collectively, "Motion") ; Pro Se Defendant Leonard W. Krane's Request for Continuance and Extension of Time ("Opposition") , and Plaintiff's Reply Memorandum in support of Motion ("Reply") . Upon consideration of the Motion, the Opposition, and the Reply, and the record in this case, for the reasons set forth herein, the Plaintiff's Motion is granted in part and denied in part. A separate Order accompanies this Memorandum Opinion.
I. Factual Background
On March 9, 2012, Defendant Leonard W. Krane ("Defendant") entered into a Promissory Note ("Note") for the purpose of borrowing the principal sum of One Hundred Thousand Dollars ($100, 000.00) from Plaintiff V. James Adduci ("Plaintiff"). See Promissory Note (Motion, Exh. 1.) The Note states that "Maker [Defendant] hereby represents and warrants that the Loan evidenced hereby is made and transacted solely for the purpose of acquiring or carrying on a business, professional or commercial activity." (Motion, Exh. 1.)
The "Maturity Date" was defined thereunder as ninety (90) days after the date of the Note. (Motion, Exh. 1 at (A).) Pursuant to the Promissory Note, the Defendant was also required to pay a "Loan Exit Fee" to the Plaintiff, in the amount of Nine Hundred Thousand Dollars ($900, 000.00), which is due at the time the Note is paid in full. (Motion, Exh. 1 at (B).) Defendant is further responsible for payment of a "late charge" equivalent to five percent (5%) "[i]n the event any installment of principal and/or the Exit Fee due under this Note is not actually received by the holder thereof within fifteen (15) days after the date when the same is due...." (Motion, Exh. 1.) Overdue payments of the principal and/or Exit Fee also incur "interest at the rate of ten percent (10%) per annum until paid." ( Id. ) As of February 4, 2015, Defendant has made no payment to Plaintiff. (Motion .) Plaintiff requests payment of the loan amount, the Loan Exit Fee, late charge, and accrued interest. (Motion .)
II. Legal Standard
A court should grant summary judgment if the pleadings, depositions, answers to interrogatories, and affidavits demonstrate that there is no genuine issue of material fact in dispute and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir 2006). The burden is on the moving party to show that there are no material facts in dispute and that they are entitled to judgment as a matter of law. Branch Banking & Trust Co. v. Rappaport, 982 F.Supp.2d 66, 68 (D.D.C. 2013); see also Sage v. Broadcasting Publications, Inc., 997 F.Supp. 49 (D.D.C. 1998).
In determining whether there exists a genuine issue of material fact sufficient to preclude summary judgment, the court must regard the non-movant's statements as true and accept all evidence and make all inferences in the non-movant's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); see also Mastro v. Potomac Elec. Power Co., 447 F.3d 843, 850 (D.C. Cir. 2006). The adverse party's pleading must demonstrate the existence of a genuine issue of material fact. See Liberty Lobby, 477 U.S. at 248. To be genuine, the issue must be supported by sufficiently admissible evidence such that a reasonable trier of fact could find for the nonmoving party. In determining materiality, the factual assertion must be capable of affecting the substantive outcome of the litigation. See id. ; see also Laningham v. U.S. Navy, 813 F.2d 1236, 1242-43 (D.C. Cir. 1987).
1. The Loan Exit Fee Provision Is Unreasonable
Plaintiff and Defendant entered into a contract on March 9, 2012 whereby Plaintiff loaned Defendant $100, 000.00. See Promissory Note (Motion, Exh. 1.) Defendant does not dispute that he entered into the contract but claims that certain provisions in the Note are "invalid, illegal, or unenforceable." ( See Opposition .) The usual remedy in a breach of contract dispute is to make Plaintiff whole by Defendant paying damages in the amount Plaintiff would have received had the contract been performed as written. See Colletti v. Aina, No. Civ. A. 93-0394-LFO, 1995 WL 170380, at *2 (D.D.C. Mar. 29, 1995).
A court may refuse to enforce the contract, or a questionable provision in the contract, if the court determines that clause is unconscionable. See D.C. Code § 28:2-302(1) (2014). The court uses a two prong test for unconscionability: (1) whether one of the parties had no meaningful choice, and (2) whether the contract terms unreasonably favored one party. See Fox v. Computer World Servs. Corp., 920 F.Supp.2d 90, 97-99 (D.D.C. 2013); Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C. Cir. 1965). To ascertain if a meaningful choice existed, the court looks at the totality of the circumstances surrounding the deal, including the parties' education, reasonable opportunity to understand the terms of the contract, or whether the terms were "hidden" or otherwise deceptive. Fox, 920 F.Supp.2d at 98; see also Williams, 350 F.2d at 449.
Turning to the first prong of the test, the record contains no indication that Defendant did not have a fair opportunity to review the contract. ( See Motion .) Further, Defendant does not contend that he did not understand the terms of the contract. ( See Opposition .) Because Defendant had an opportunity to review the contract and does not show he failed to understand any term in the contract, the Court finds that Defendant had a meaningful choice to enter ...