United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT AND MOTION TO STRIKE CLAIM OF TRIAL BY JURY
F. DENNIS SAYLOR, IV, District Judge.
This is a dispute over the repayment of five loans. Plaintiff KIT-USA, Inc., is the holder of five promissory notes executed by defendant PayByClick Corporation ("PBC"). The five notes are for $750, 000; $761, 000; ¥50, 000, 000; ¥50, 000, 000; and ¥100, 000, 000. Defendant Marvin T. Ling allegedly guaranteed all five notes. Plaintiff has brought suit for breach of contract against defendants, alleging that it has not been paid for the notes and that the notes have become due. Jurisdiction is based on diversity of citizenship.
Defendants have moved for partial summary judgment, contending that their obligations under the first, second, and fifth notes were extinguished because they were converted into PBC stock. They also contend that Ling's guaranty does not cover the other two notes. Plaintiff has moved to strike defendants' demand for a trial by jury.
For the following reasons, the motion for partial summary judgment will be denied. The motion to strike defendants' demand for a trial by jury will be granted.
A. Factual Background
The following facts are undisputed or stated in the light most favorable to the nonmoving party.
KIT-USA, Inc. is a Massachusetts corporation with a principal place of business in Malden, Massachusetts. (Compl. ¶ 1). Toshio Izumiya is the chairman of the board of directors of KIT. (Izumiya Aff., Docket No. 20, Ex. I ¶ 4).
PayByClick Corporation is a Delaware corporation that appears to have a principal place of business in Scottsdale, Arizona. (Compl. ¶ 2). Marvin Ling is the president and chief executive officer and a director of PBC, and a citizen of Arizona. (Nov. 1, 2005, Board Minutes, Docket No 17, Ex. I; Compl. ¶ 3).
In 2000 or 2001, Ling asked Izumiya for an investment in his company. (Izumiya Aff. ¶ 6). Izumiya agreed to make a loan from KIT to PBC.
On June 5, 2001, KIT and PBC signed a loan agreement for $750, 000, to be repaid within two years, and secured by a promissory note executed and delivered by PBC to KIT. (Izumiya Aff., Exs. A, B). The agreement included a provision that allowed KIT to convert the loan into PBC stock. ( Id. Ex. B). The promissory note stated that the parties expressly "waive... any right... to a trial by jury of any dispute arising under or relating to this note and agrees that any such dispute shall be tried before a judge sitting without a jury." ( Id. ).
On June 5, 2001, Ling also executed and delivered a guaranty of PBC's obligations to KIT. (Guaranty, Docket No. 17, Ex. C). The guaranty stated:
For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of KIT-USA, Inc. (hereinafter called the "Lender") having made, or now or in the future making, advances or otherwise giving credit to PayByClick Corporation, ... (hereinafter called the "Borrower"), however such advances or credit may be made or evidenced, the undersigned does hereby unconditionally guarantee to Lender, its successors and assigns, full and prompt payments and performance of all present and future obligations of Borrower to Lender, including all renewals and extensions thereof or substitutions therefor.
Notice of acceptance of and action taken by Lender from time to time under this Guaranty are hereby waived, and this Guaranty shall operate as continuing, absolute and irrevocable Guaranty covering all obligations of Borrower to Lender (and renewals and extensions thereof or substitutions therefor) now existing or hereafter arising.
For the purposes of this Guaranty, the term "obligations" shall mean and include, without limitation, the payment and performance of all loans, indebtedness, notes, liabilities... and amounts, owing by Borrower to Lender at any time, each of every kind, nature and description, and whether secured or unsecured, direct or indirect (that is, whether the same are due directly by Borrower to Lender; or are due indirectly by Borrower to Lender as endorser or guarantor, or as obligor of obligations due to third persons, firms, or corporations which ...