Vois, Inc. v, Spindel

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JULY 13, 2011
JOHN LEY
CLERK
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 10-15668
Non-Argument Calendar
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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:

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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. VOIS argues that it is unlikely the Spindels would fail to receive the1
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
VOIS was originally known as Medical Record by Net, then Lifelink Online, then Medstrong1
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.
We recognize that this case will be tried in a bench trial and the result may very well be the2
same. However, we feel compelled to apply the law surrounding summary judgment regardless.
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