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Firestone Financial LLC v. Meyer

United States Court of Appeals, Seventh Circuit

February 1, 2018

Firestone Financial LLC, Plaintiff-Appellee,
John R. Meyer, Defendant-Appellant.

          Argued January 24, 2018

         Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 13 C 7241 - Amy J. St. Eve, Judge.

          Before Bauer, Kanne, and Barrett, Circuit Judges.

          PER CURIAM.

         Firestone Financial sued John Meyer as guarantor of defaulted loans. Meyer, proceeding pro se, asserted promissory estoppel as both a defense and counterclaim. After an earlier trip to this court, see Firestone Fin. Corp. v. Meyer, 796 F.3d 822 (7th Cir. 2015), the district court entered summary judgment for Firestone. Meyer filed two notices of appeal, and we consolidated the appeals. We affirm the judgment in 17-1611 because a reasonable jury could not conclude that Meyer has satisfied any of the three elements of promissory estoppel. We dismiss 17-1712 as duplicative.

         I. BACKGROUND

         Meyer, a disbarred lawyer, is the founder and owner of three Illinois companies: J H M Equipment Leasing Company ("JHM"), which installed and maintained laundry machines in apartment buildings; Dolphin Laundry Services ("Dolphin"), which sold commercial laundry equipment to JHM and other customers; and J H Meyer Enterprises, which operated a laundry facility.

         In 2012 and 2013, Firestone Financial Corporation financed JHM's business with four loans totaling about $250, 000. (The lender, a Massachusetts corporation, later merged with appellee Firestone Financial LCC.) Because JHM obtained its equipment from Dolphin at little or no cost, the loans to JHM actually financed Dolphin's purchases from the manufacturer. Firestone retained a security interest in JHM's assets. Dolphin, J H Meyer Enterprises, and Meyer also guaranteed JHM's loan obligations.

         In 2013 Firestone sued JHM for defaulting on its repayment obligations and Meyer and his other two corporations for breaching the loan guaranties. The defendants raised the affirmative defense and counterclaim of promissory estoppel. They asserted that in November 2012, after Firestone had already issued JHM two loans of about $45, 000 each, Firestone's Vice President for Business Development, Dan McAllister, told Meyer that Firestone would set up a $500, 000 line of credit for JHM. He then made the promise that underlies the estoppel defense and counterclaim: McAllister assured Meyer that, until the line of credit was established, Firestone would finance "any" equipment that JHM needed on the "same" and "identical terms" to the first two loans. Firestone issued its third loan to JHM, this one for $98, 000, in February 2013. After McAllister left Firestone that spring, Firestone's CEO approved a final loan, for $66, 000. The defendants assert that Firestone's refusal to issue further loans, as McAllister supposedly promised, harmed them. Specifically, without further loans, Dolphin could not pay a manufacturer, Maytag, for machines that Dolphin had committed to buy; Maytag then refused to sell equipment to Meyer's companies, costing the defendants "millions."

         The case proceeded to judgment quickly. After the defendants answered the complaint, their lawyer withdrew, and the district court entered default judgment against the three unrepresented corporations. This left the claim of breach of guaranty against Meyer, who was now pro se. The court later dismissed Meyer's counterclaim and entered summary judgment for Firestone. It agreed with Firestone that Meyer's allegations were implausible because no financial firm would commit orally to loaning substantial sums to a startup. The court accepted Firestone's argument that the dismissal of Meyer's counterclaim doomed the defense as well. With no defense remaining, the court entered a judgment for Firestone.

         But the case was not over. Meyer appealed, and we reversed the dismissal of the counterclaim, reasoning that the district court had misapplied Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007). On remand Meyer conceded Firestone's main allegations. He admitted that JHM "did not make all the payments set forth in the payment terms of the four promissory notes" and that he "made no payments" to Firestone. He also clarified his promissory-estoppel defense and counterclaim, which in his view excused non-payment. Both were based on McAllister's "promise that Firestone would fund JHM's equipment purchases while Dan McAllister worked on putting in place the line of credit." Meyer also asserted a new defense: Firestone sold some collateral in a commercially unreasonable manner. This collateral consisted of over 300 laundry machines that JHM had placed in buildings owned by Pangea Ventures, LLC. JHM contracted with Pangea to maintain the machines and share with Pangea the revenue they generated. Firestone sold the machines to Pangea for $40, 000. Meyer swore that it would have been more commercially reasonable to sell the machines to a buyer who could take over the contract.

         The district court again entered summary judgment for Firestone. The court ruled that Meyer's reliance on McAllister's alleged promise of additional funding was "unreasonable as a matter of law." It also found that Meyer could not establish his damages because he presented no bank statements, accounting records, or invoices from the relevant years. Finally, the court rejected as undeveloped and unsubstantiated the argument that Firestone's sale of the laundry machines to Pangea was commercially unreasonable. The judgment was for $427, 131 against Meyer.

         After the district court entered summary judgment for Firestone, Meyer filed a notice of appeal (No. 17-1611) and a document he styled a "Motion Under Rule 52(b) to Amend the Findings and Judgment of [the] Court." The court denied the motion as procedurally improper, adding that it would deny the motion on the merits even if construed as a Rule 59(e) motion. Two days later Meyer filed an "amended notice of appeal" (No. 17-1712) in which he specified that he sought to appeal both the district court's entry of summary judgment for Firestone and its denial of his post judgment motion. We consolidated the two appeals for decision.

         II. ...

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