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Frontier Fiscal Services, LLC v. Pinky's Aggregates, Inc.

Supreme Court of North Dakota

May 28, 2019

Frontier Fiscal Services, LLC, Plaintiff and Appellee
Pinky's Aggregates, Inc., and Dale Honsey, Defendants and Appellants

          Appeal from the District Court of McKenzie County, Northwest Judicial District, the Honorable Daniel S. El-Dweek, Judge.

          Trevor A. Hunter (argued) and Lisa M. Six (on brief), Williston, ND, for plaintiff and appellee.

          Matthew D. Kirschenmann (argued) and Michael T. Andrews (on brief), Fargo, ND, for defendants and appellants.


          McEvers, Justice

         [¶1] Pinky's Aggregates, Inc., and its president, Dale Honsey, appeal from a judgment awarding Frontier Fiscal Services, LLC, $526, 253.12 in its action for breach of contract and to collect on a personal guaranty. Because Pinky's and Honsey failed to raise a genuine issue of material fact to preclude summary judgment, we affirm.


         [¶2] Honsey is the president and owner of Pinky's, which is in the business of providing sand, gravel, and other aggregate and excavation and hauling services. In 2016 the Department of Transportation contracted with Baranko Brothers, Inc., which subcontracted with Pinky's to supply material and labor for a construction project. Pinky's entered into at least 16 hauling agreements with sub-subcontractors to transport gravel and aggregate for the project. Many of the sub-subcontractors assigned their accounts receivable under the hauling agreements to Frontier, which provides invoice factoring services, purchasing receivables at a discount in exchange for an immediate cash payment. Pinky's received notice of the assignments and made payments to Frontier for the sub-subcontractors' invoices.

         [¶3] Pinky's eventually fell behind on its payments to Frontier, and Frontier in turn ceased factoring for the sub-subcontractors. The sub-subcontractors refused to do any more work for Pinky's unless Frontier resumed factoring services for them. The situation resulted in Honsey signing a personal guaranty with Frontier as "an Individual & President of Pinky's."

         [¶4] After Pinky's failed to pay Frontier in full, Frontier brought a breach of contract action against Pinky's and sought to collect on the personal guaranty signed by Honsey. The district court granted Frontier's motions for summary judgment against Pinky's and Honsey and held them jointly and severally liable for $526, 253.12.


         [¶5] Pinky's and Honsey argue genuine issues of material fact precluded the district court from granting summary judgment against them.

         [¶6] The standard of review for summary judgments is well established:

Summary judgment is a procedural device under N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. The party seeking summary judgment must demonstrate there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. In deciding whether the district court appropriately granted summary judgment, we view the evidence in the light most favorable to the opposing party, giving that party the benefit of all favorable inferences which can reasonably be drawn from the record. A party opposing a motion for summary judgment cannot simply rely on the pleadings or on unsupported conclusory allegations. Rather, a party opposing a summary judgment motion must present competent admissible evidence by affidavit or other comparable means that raises an issue of material fact and must, if appropriate, draw the court's attention to relevant evidence in the record raising an issue of material fact. When reasonable persons can reach only one conclusion from the evidence, a question of fact may become a matter of law for the court to decide. A district court's decision on summary judgment is a question of law that we review de novo on the record.

Becker v. Burleigh Cty., 2019 ND 68, ¶ 7, 924 N.W.2d 393 (quoting Dahms v. Nodak Mut. Ins. Co., 2018 ND 263, ¶ 6, 920 N.W.2d 293).


         [¶7] Pinky's argues because an assignee receives no greater rights than the assignor, see Collection Ctr., Inc. v. Bydal, 2011 ND 63, ¶ 15, 795 N.W.2d 667, Frontier had the burden to establish that the sub-subcontractors complied with their various hauling contracts. Pinky's does not claim any of the sub-subcontractors failed to comply with the hauling contracts. Rather, Pinky's argues that Frontier failed to present evidence that the sub-subcontractors timely and correctly completed paperwork, that they raised their dispute about nonpayment in a timely fashion, that they maintained proper hauling records, and that Pinky's consented to the assignments.

         [¶8] Pinky's' argument is without merit. Frontier presented the following deposition testimony of Honsey:

Q. So then a follow-up question to that would be, you do believe that Pinky's owes monies to Frontier Fiscal for the factoring we've been talking about?
A. Absolutely. . . . I mean, I owe the money; Pinky's owes the money, I'm not disputing that whatsoever.
Q. So the only-okay. So you're not contesting any assertion made against Pinky's in the complaint by ...

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