Opinion ID: 793781
Heading Depth: 2
Heading Rank: 1

Heading: Sale of Pago Poco, Inc.

Text: 11 According to Estremera, summary judgment was inappropriate in this case because substantial facts remain in dispute regarding whether Estremera actually sold the store to Sousa Investment. Estremera maintains that she did not. According to her, the parties agreed that she would retain ownership of the store until Sousa Investment paid the $44,000 remaining on the mortgage note. Sousa Investment made only five payments on the note beyond its $1000 down payment. Thus, according to Estremera, the sale was never completed. 12 Estremera also argues that the sale was a sham or aborted transaction, because Sousa Investment never intended to pay off the mortgage note. She maintains that Sousa Investment's bad faith is evidenced by the fact that it made only five payments on the note beyond the $1000 down payment. Sousa Investment's actions, Estremera implies, rendered the sale void or voidable. Estremera further argues that even if Sousa Investment did not act in bad faith, the sale was a legal nullity, because the sale was not completed and the business was turned back over to Ms. Estremera. 13 Additionally, Estremera argues that there was no sale because she did not make an informed consent to the sale. She claims that her attorney in the real estate transaction failed to inform her of the likelihood that she would be required to pay a monetary penalty if she sold the store. Estremera's attorney in this action (who had nothing to do with the real estate transaction) signed an affidavit stating that he had knowledge—based on a review and analysis of the documents involved in the sale of the store—that Estremera's former attorney did not warn Estremera of the looming `transfer of ownership penalty.' 14 Estremera admits that she signed an Admission stating that she sold the store to Sousa Investment. She argues, however, that she was confused over the meaning of the word sold when she made that statement. Estremera subsequently amended the Admission to state that a sale did not legally occur. The government argues that Estremera has failed to offer any evidence or legal authority in support of her argument that there was not a sale. The government also emphasizes that there is ample evidence that there was a sale: a signed consent agreement to sell the store; a signed bill of sale; a signed real estate closing confirming the sale; a signed affidavit from Estremera attesting to the sale; a signed mortgage note and lease; a signed personal guarantee of the mortgage note and lease; and a signed letter from the purchaser stating that Estremera did not have a financial interest in the store except for the rent she receives. 15 The district court considered these arguments and found that Estremera sold the store to Sousa Investment. We agree. All of the documents offered by the parties, including the bill of sale, consent action agreement, real estate closing statement, and Estremera's affidavit attesting to the sale, demonstrate that there was a sale. For instance, the real estate closing statement records Pago Poco, Inc. as the seller and Sousa Investment, LLC as the buyer. The real estate closing statement also records the balance owed to Estremera, the seller, as $-O- as of the February 20, 2003, closing date. Additionally, there is nothing in the mortgage note to indicate that the sale was not final until the note was fully paid. The mortgage note shows simply that Estremera provided a mortgage to Sousa Investment. Under the terms of the mortgage note, if Sousa Investment defaulted on its payments, Estremera could require Sousa Investment immediately to pay off the entire balance owed to her. 16 Estremera's other arguments fail as well. Estremera asserts that the sale was void or voidable because Sousa Investment never intended to pay for the store. However, she offers no legal or factual support for this argument. The documents provided by the parties indicate that the sale was complete on February 20. Although Sousa Investment still owed payments to Estremera under the mortgage note, Sousa Investment was not required to pay off the mortgage in order to finalize the sale. Additionally, Estremera does not support her argument that the sale was a legal nullity because Sousa Investment never made all the payments due on the mortgage note. Nor does she ever explain how the store was turned back over to her after Sousa Investment stopped making payments on the mortgage note. 17 Moreover, the evidence shows that Estremera was, in fact, on notice that selling the business would result in the imposition of a penalty. The FNS warned Estremera of the penalty in its letter dated October 15, 2002. Even assuming Estremera was not warned by FNS, Estremera has submitted insufficient evidence to show that her former attorney failed to warn her of the penalty at the time she sold the store. Estremera's attorney in the present action submitted his own affidavit in support of her failure to warn argument. The affidavit was based on the attorney's review of the relevant documents and his interviews with witnesses who had personal knowledge of the circumstances surrounding the sale of the store. Second-hand knowledge acquired in this way cannot, without more, establish that material facts are in dispute. Federal Rule of Civil Procedure 56(e) requires that supporting affidavits be based on personal knowledge, which Estremera's attorney did not possess. Moreover, `[w]here evidence is easily available from other sources and absent extraordinary circumstances or compelling reasons, an attorney who participates in the case' should not serve as a witness. United States v. Britton, 289 F.3d 976, 982 (7th Cir.2002) (quoting United States v. Dack, 747 F.2d 1172, 1176 n. 5 (7th Cir.1984)). Such extraordinary circumstances were not present here. Estremera's attorney could have introduced into the record the documents he relied on in his affidavit, and he could have obtained affidavits from the witnesses he interviewed in creating his own affidavit. Finally, even if we accepted that Estremera's former attorney failed to warn her of the penalty, Estremera has not explained why such negligence would make the sale a legal nullity.