Judge Paul A. Crotty
Under a 2005 agreement, Sovereign Bank loaned money so USA Financial Services could buy and lease cars. Sovereign also loaned USA Financial $250,000 under a 2006 Business Loan Agreement. Moscatello guaranteed both agreements. USA Financial discontinued business, triggering defaults under both loans. Sovereign sued USA Financial for breaches of contract and related claims. It also charged Moscatello with breach of guarantee. The court found USA Financial liable for breaching both agreements, and that Moscatello breached the guarantee. It found Sovereign was owed $250,000 plus 4.25 percent annual interest from Oct. 31, 2010, through Dec. 14, 2011. Sovereign’s loan to USA Financial to enter into third-party leases was not a sufficient reason to disregard the loans’ contractual provisions granting Sovereign the right to accelerate the debt and declare payment of unpaid principal due. An event of default occurred when USA Financial discontinued business and stopped paying its debts. USA Financial and Moscatello did not pay the full amount outstanding on the loans. Whether they should be credited for payments made by third-party lessees does not create a triable factual issue as to their liability.
