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Change Capital Partners Fund I, LLC v. OTI Fiber LLC

United States District Court, S.D. Florida

October 28, 2019

CHANGE CAPITAL PARTNERS FUND I, LLC, Plaintiff,
v.
OTI FIBER LLC, Defendant.

          ORDER

          CECILIA M. ALTONAGA UNITED STATES DISTRICT JUDGE

         THIS CAUSE came before the Court on Defendant, OTI Fiber LLC's Motion for Summary Judgment [ECF No. 76], filed August 18, 2019. Plaintiff, Change Capital Partners Fund I, LLC, filed a Memorandum in Opposition [ECF No. 80]; to which Defendant filed a Reply [ECF No. 88]. The Court has carefully considered the Amended Complaint [ECF No. 39], the parties' written submissions, [1] the record, and applicable law. For the following reasons, the Motion is denied.

         I. BACKGROUND

         This is an action for breach of contract. (See generally Am. Compl.). Plaintiff, Change Capital Partners Fund I, LLC, is a Delaware limited liability company with its principal place of business in New York; and Defendant, OTI Fiber LLC, is a Florida limited liability company with its principal place of business in Florida.[2] (See Am. Compl. ¶¶ 2-3). Plaintiff contends Defendant failed to make payments Plaintiff, as an assignee, was owed under certain agreements. (See generally id.). Plaintiff's claim arises from a basic set of facts.

         Between June 6, 2016 and August 19, 2016, non-parties, Azadian Group LLC (“Azadian”) and Florida Fiber Networks LLC (“FFN”), entered into three Merchant Receivables Purchase and Security Agreements.[3] (See Def.'s Facts ¶ 1). Under the Merchant Agreements, Azadian purchased FFN's right, title, and interest in a percentage of future receivables. (See generally Merchant Agreements). The terms of the Merchant Agreements are essentially identical. (See id.).

         In February 2017, Azadian assigned “all of its rights and obligations” under the Merchant Agreements to Plaintiff. (Am. Compl., Ex. 7, Assignment [ECF No. 39-7]). The Assignment provides:

1. [Azadian] and [Plaintiff] hereby agree that [Azadian] shall assign all its right, title, and interest, and delegate all its obligations, responsibilities and duties in and to the [Merchant] Agreements, to [Plaintiff].
2. [Plaintiff] hereby accepts the assignment of all of [Azadian's] obligations, responsibilities and duties under the [Merchant] Agreements and all of [Azadian's] right, title and interest in and to the [Merchant] Agreements.

(Id. (alterations added)). Plaintiff acknowledges with the Assignment, Azadian assigned all of its rights, title, and interest in the Merchant Agreements to Plaintiff. (See Def.'s Facts ¶ 3; Pl.'s Facts ¶ 3).

         In November 2016, Defendant and FFN entered into an Asset Purchase Agreement[4] (“APA”). (See Def.'s Facts ¶ 4). The APA was executed after the Merchant Agreements but before the Assignment. (See Id. ¶¶ 1-2, 4). Included in the APA was a provision that set out the aggregate purchase price in multiple parts. (See APA 8-9). In this regard, Section 2.4(b)(v) provides a portion of the purchase price to be paid as follows:

$2, 302, 427.23 pursuant to purchase money financing which will be evidenced by a promissory note substantially in the form attached hereto as Schedule 2.4(b)(iii) (the “Purchase Money Note”) payable in four monthly payments of $325, 606.81 beginning thirty (30) days after closing (the “Installment Payments”) and one last payment on the thirteenth month anniversary of the Closing Date (the “Hold Back”). The Purchase Money Note shall not accrue interest unless in default. Buyer shall make the payments due under the terms of Purchase Money Note as follows: first, to make any and all payments due to Azadian Group, LLC, Yellowstone Capital, LLC and Pearl Capital, LLC then, and only after all obligations due to Azadian, Yellowstone and Pearl are satisfied in full, to the Seller.

(Id. 9). This portion of the purchase price was funded by a Purchase Money Promissory Note (the “Note”). (See generally Am. Compl., Ex. 5, Purchase Money Promissory Note [ECF No. 39-5]). The Note is subject to the terms set forth in the APA. (See Id. 2).

         On July 23, 2018, Plaintiff filed this action against Defendant.[5] (See Notice of Removal 10). On January 28, 2019, Plaintiff filed the operative Amended Complaint, asserting a claim for breach of contract to recover the outstanding amounts due under the APA and the Note. (See generally Am. Compl.). Plaintiff seeks to recover $214, 300.00 - the amount owed to Azadian under the APA, and in connection with the Merchant Agreements, as of January 2017. (See Id. ¶¶ 13, 18).

         Defendant moves for entry of summary judgment in its favor, arguing the Assignment relates only to Azadian's rights under the Merchant Agreements, and thus the Assignment does not give Plaintiff standing to bring claims related to the APA or Note. (See Mot. 2). Plaintiff opposes summary judgment, ...


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