Court Opinion

ID: 220932
Source: CourtListenerOpinion
Date Created: 2011-07-14 00:02:35+00
Date Added: 2024-06-11T17:28:47.919030
License: Public Domain

[DO NOT PUBLISH]

                      IN THE UNITED STATES COURT OF APPEALS
                                                                            FILED
                                   FOR THE ELEVENTH CIRCUIT COURT OF APPEALS
                                                            U.S.
                                    ________________________ ELEVENTH CIRCUIT
                                                                        JULY 13, 2011
                                            No. 10-15668                 JOHN LEY
                                        Non-Argument Calendar              CLERK
                                      ________________________

                                D.C. Docket No. 9:08-cv-80689-KLR

VOIS, INC.,

llllllllllllllllllllllllllllllllllllllll                     Plaintiff - Counter -
llllllllllllllllllllllllllllllllllllllll                     Defendant - Appellant,

    versus

EDWARD SPINDEL,
MICHAEL SPINDEL,

llllllllllllllllllllllllllllllllllllllll                     Defendants - Counter -
llllllllllllllllllllllllllllllllllllllll                     Claimants - Appellees.

                                     ________________________

                           Appeal from the United States District Court
                               for the Southern District of Florida
                                 ________________________

                                           (July 13, 2011)

Before TJOFLAT, MARTIN and FAY, Circuit Judges.

PER CURIAM:
      VOIS, Inc. (“VOIS”) appeals the district court’s order granting summary

judgment in favor of Edward Spindel and Michael Spindel (“Spindels”). The court

held the Spindels has met their burden under the lost instrument statute and that VOIS

was unable to rebut the Spindels’ claims. After careful review of the record and

counsels’ briefs, we reverse.

                                I.   BACKGROUND

      Appellant VOIS is the current name of a medical information company which

sought to attract investors by issuing a Private Placement Memorandum on November

18, 2002. Appellees, Edward and Michael Spindel are brothers and veterinarians who

agreed to invest in the company. VOIS issued the Spindels five promissory notes in

exchange for a $145,000.00 loan. In April 2008 VOIS filed a complaint against the

Spindels in state court, alleging that the Spindels had caused VOIS to issue the five

promissory notes at unfavorable rates and then engaged in a fraud by using their

position within the company to restructure the notes to be even more unfavorable to

VOIS. Based on diversity jurisdiction, the Spindels were able to remove the action

to federal court.

      Once in federal court, the Spindels filed a counter-claim against VOIS on

February 17, 2009, demanding repayment of the debts owed under the notes. During

discovery, VOIS initially claimed to not be in possession of the original notes and

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that its quarterly and annual corporate filings with the SEC were correct in showing

that the notes were in default and accruing interest in the Spindels favor. VOIS later

provided a sworn affidavit to the court attesting that it had recently discovered the

original notes and that all five notes were currently in their possession.

      On July 19, 2010 the Spindels filed a Motion for Summary Judgment which

argued that there was no genuine issue of material fact and that judgment should be

entered in their favor. Shortly after VOIS filed a Response in Opposition, which

stated that its possession of the original promissory notes precluded summary

judgment in favor of the Spindels. On September 16, 2010 a hearing on the Motion

was held in the District Court. On November 4, 2010, the District Court granted the

Spindels’ Motion for Summary Judgment, finding that the Spindels had met their

burden and that VOIS has failed to rebut the Spindels’ claims. The district court

entered judgment in the amount of $287,266.00. VOIS filed this timely appeal.

                                II.   DISCUSSION

      We review the district court’s grant of summary judgment               de novo,

considering all the evidence and factual inferences in the light most favorable to the

non-moving party. See Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 956 (11th

Cir. 2009). Under Fed. R. Civ. P. 56(c), a motion for summary judgment is properly

granted when “the pleadings, depositions, answers to interrogatories, and admissions

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on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a judgment as a matter of

law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

      VOIS argues that the district court improperly shifted the burden of proof on

VOIS even though VOIS showed that it possessed the original notes, giving rise to

the inference that as the bearer of the notes, VOIS’ liability under the notes is

extinguished. It argues that the district court erred in granting summary judgment

where there remained in dispute an issue of fact regarding whether the Spindels ever

possessed the original promissory notes. The district court concluded that the

Spindels met their burden of proving their “lost note” claim even though VOIS

presented evidence to the contrary, including cover letters to the Spindels stating that

the executed notes were enclosed, and evidence that Edward Spindel later assigned

a separate Demand Note made in his favor from Medstrong, VOIS’ predecessor

company. 1 VOIS argues that it is unlikely the Spindels would fail to receive the

originals of the five promissory notes in their favor if Edward Spindel obtained the

original of a Demand Note from the same entity, which he later assigned.

      The Spindels argue that VOIS failed to present any evidence to support its

contention that VOIS’ mere possession of the notes absolved it from liability under
1
 VOIS was originally known as Medical Record by Net, then Lifelink Online, then Medstrong
Corporation.

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the notes due to either payment or other discharge of liability. They argue that VOIS

rested on its mere possession of the notes and failed to produce any additional

evidence. The district court agreed, finding that the Spindels pointed to undisputed

evidence as to why they could not produce the original notes: that the notes were

never delivered to them. The trouble with the Spindels’ argument, and the district

court’s conclusion, is that the Spindels’ evidence was not undisputed. VOIS

presented evidence that the notes were delivered to the Spindels. With the fact of the

Spindels’ possession of the notes in dispute, the Spindels could not prove their “lost

note” claim as a matter of law. The district court, however, concluded that the

Spindels’ contention that they never received the original notes was in fact accurate.

The district court erred in deciding this issue of fact in favor of the Spindels on

summary judgment.2

       Accordingly, we reverse the district court’s entry of summary judgment in

favor of Edward and Michael Spindel.

       REVERSED.

2
 We recognize that this case will be tried in a bench trial and the result may very well be the
same. However, we feel compelled to apply the law surrounding summary judgment regardless.

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