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Rapid Capital Finance v. Golden Chariot Motors, LLC

Superior Court of Delaware

January 23, 2019

Rapid Capital Finance, d/b/a Rapid Capital Funding, Plaintiff,
v.
Golden Chariot Motors, LLC and Olukayode Adamolekun a/k/a Kayode Adamolekun, Defendants.

          Submitted: January 11, 2019

          Upon Defendant Olukayode Adamolekun's Motion for Summary Judgment.

          Granted. Patrick Scanlon, Esquire of Patrick Scanlon, P. A., Milford, Delaware; attorney for Plaintiff.

          Tasha M. Stevens, Esquire of Fuqua Willard Stevens & Schab, P.A., Georgetown, Delaware; attorney for Defendants.

          ORDER

          WILLIAM L. WITHAM. JR., RESIDENT JUDGE

         INTRODUCTION

         Upon consideration of the Motion for Summary Judgment filed by one of the Defendants in this case, Olukayode Adamolekun, also known as Kayode Adamolekun, the opposition of the Plaintiff, Rapid Capital Finance, LLC d/b/a Rapid Capital Funding and oral arguments presented by the parties, it appears that:

         FACTUAL AND PROCEDURAL HISTORY

         1. The Plaintiff, Rapid Capital Finance, LLC d/b/a Rapid Capital Funding ("RCF"), is a business that finances companies by buying their future receivables at a discount.

         2. One of the named Defendants, Golden Chariot Motors, LLC, ("Golden Chariot") was previously in the used car business. Golden Chariot was solely owned by the Co-Defendant, Olukayode Adamolekun, also known as Kayode Adamolekun, ("Adamolekun").

         3. Golden Chariot entered into several business transactions with RCF during its span of operations. In each transaction, Golden Chariot, sold, at a discount, credit card payments that the organization would receive in the future.

         4. The transaction at issue is a May 4, 2016 Merchant Agreement ("Agreement") where Golden Chariot sold $91, 000.00 worth of future receivables to RCF for $70, 000, for which Golden Chariot received $35, 795.00 in total.[1]

         5. Per the Agreement, Golden Chariot was required to make weekly payments to RCF totaling approximately $ 1, 900.00 until the $91, 000.00 balance had been paid. These payments were to be automatically withdrawn from an identified bank account with Citizens Bank, [2] that RCF was authorized to access and make automatic clearing house withdrawals from on a weekly basis.

         6. In the event of Golden Chariot's default, Rapid Capital was contractually entitled to immediately collect the entire unpaid balance.[3] However, in addition to the Agreement, Adamolekun entered into an accompanying Security and Guaranty Agreements with RCF.[4] The security agreement stated:

[t]o secure Guarantor's payment and performance obligations under this Security Agreement and Guaranty, Guarantor hereby grants [RCF] a security interest in [Golden Chariot] LLC. (the "Additional Collateral").[5]

         Additionally, the Guaranty stated:

[t]he undersigned Guarantors) hereby guarantees to [RCF] Merchant's performance of all the representations, warranties, covenants made by Merchant in this Agreement and the Merchant Agreement... Guarantor's obligations are due at the time of any breach by Merchant of any representation, warranty, or covenant made by Merchant in this Agreement and the Merchant Agreement.[6]

         7. After a time, Golden Chariot desired to enter into renegotiations with Rapid Capital regarding the payment schedule and amount per payment that Golden Chariot was bound contractually to make.[7] Adamolekun, as the owner of Golden Chariot, led those efforts and after he failed to receive affirmation from RCF regarding Golden Chariot's request for re-negotiations, Adamolekun closed Golden Chariot's business bank account with Citizens Bank, the account that RCF had previously been granted access, despite the terms of the Agreement prohibiting such an action. Only one payment had been withdrawn from the account from RCF. Neither Golden Chariot, nor Adamolekun (individually), ever disclosed to RCF that the Citizens Bank account had been closed, nor granted them access to a new bank account in Golden Chariot's name established at WSFS Bank. As a result, RCF was unable to withdraw payments owed by Golden Chariot.

         8. RCF has received no further payments since the closing of the Citizens Bank account in May 2016. Golden Chariot permanently closed its business and no further collection of its accounts receivables was conducted.

         9. RCF filed the present complaint on January 20, 2017, and initially claimed that both Golden Chariot and Adamolekun were liable, joint and severally, for the outstanding principle amount of $86, 550.00, plus 6% pre-judgment interest from May 16, 2016, 6% post-judgment interest per annum, and 15% of the amount awarded by the Court for principle and interest as attorneys fees and costs.[8] Golden Chariot and Adamolekun filed their joint reply in opposition on March 30, 2017.

         10. Adamolekun alone subsequently filed the present motion for summary judgment on November 7, 2018. RCF filed its timely response in opposition to the motion on November 21, 2018. The Court heard oral arguments on January 11, 2019 and reserved its decision.

         STANDARD ...


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