David J. SMITH, Plaintiff-Appellant,
CENTRAL POINT PAWN, LLC, Defendant-Respondent.
Submitted March 2, 2018
Jackson County Circuit Court 14CV20545 Timothy C. Gerking,
J. Smith fled the brief pro se.
Kendell H. Ferguson and Sorenson, Ransom, Ferguson &
Clyde, LLP, filed the brief for respondent.
Armstrong, Presiding Judge, and Tookey, Judge, and Shorr,
appeals from an order granting summary judgment to defendant,
Central Point Pawn, LLC (CPP). One of CPP's
member-managers had borrowed money from plaintiff purportedly
to be used for CPP's business operations. Plaintiff sued
after CPP failed to repay the loan. CPP moved for summary
judgment under ORS 63.140(1)(a), arguing that the loan had
not been arranged in the ordinary course of business and that
the other member-managers had not authorized the loan. The
trial court granted CPP's motion, and plaintiff appeals.
Held: The trial court erred. Based on the evidence
in the summary judgment record, there is a genuine issue of
material fact whether CPP incurred the debt from
plaintiff's loan in the ordinary course of business.
Or.App 342] SHORR, J.
sued defendant, Central Point Pawn, LLC (CPP), after CPP
failed to repay a loan from plaintiff that was arranged by a
member-manager of CPP, without the knowledge or approval of
the other member-managers. CPP moved for summary judgment,
maintaining that it was not responsible for repaying the loan
because it was not made in the ordinary course of business
and not approved by a majority of CPP's member-managers.
The trial court granted CPP's motion. For the reasons
explained below, we reverse and remand.
reviewing a trial court's summary judgment ruling, we
view the evidence in the light most favorable to the
nonmoving party, here plaintiff, to determine whether there
is a genuine issue of material fact that precludes summary
judgment. Rush v. Corvallis School District 5O9J,
291 Or.App. 252, 253, 419 P.3d 746 (2018). There is no
genuine issue of material fact if, "based upon the
record before the court viewed in a manner most favorable to
the adverse party, no objectively reasonable juror could
return a verdict for the adverse party on the matter that is
the subject of the motion for summary judgment." ORCP 47
C. We state the facts and apply the law consistently with
a member-managed limited liability company (LLC) that owns
and operates a pawn shop in Oregon. Under its operating
agreement, the purpose of CPP is to "engage in any
Pawnbroker act or activity for which a limited liability
company may be organized under the laws of the state of
Oregon." The operating agreement does not [296
Or.App 343] specify any procedures for borrowing money that
will be used for CPP's business operations.
early 2011, plaintiff met with Bogart, a member-manager and
CPP's registered agent, and proposed to extend a line of
credit to CPP Bogart accepted the loan on behalf of CPP and
borrowed $48, 800 over the next six months. In a declaration
submitted to the trial court, Bogart averred that the loan
was "needed for and used in the operation of CPP's
pawn shop." Based on the summary judgment record,
plaintiff and Bogart did not memorialize the loan agreement
in a written contract, but evidence of the loan was furnished
to CPP's tax preparer. Undisputed evidence in the summary
judgment record shows that Bogart did not consult with
CPP's other member-managers regarding the loan, and the
other member-managers only learned of the loan when plaintiff
brought this action against CPP to recover the balance due.
brought the underlying lawsuit when CPP failed to repay the
loan. CPP argued that it was not bound by the
loan agreement between Bogart and plaintiff. In its motion
for summary judgment, CPP maintained that the debt owed to
plaintiff was not incurred in the ordinary course of
business-because, as CPP put it, pawnbrokers are "in the
business of loaning money-not being debtors"- nor was
the loan approved by a majority of the member-managers.
During the summary judgment hearing, CPP took the position
that a loan from a bank or other "standard lender"