Farnam Street Financial, Inc. v. Safe & Green Holdings Corp.
U.S. District Court, District of Minnesota
Farnam Street Financial, Inc. v. Safe & Green Holdings Corp.
Trial Court Opinion
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Farnam Street Financial, Inc., a Case No. 24-cv-3249 KMM/TNL
Minnesota corporation,
Plaintiff,
v. ORDER FOR ENTRY OF
JUDGMENT PURSUANT TO
Safe & Green Holdings Corp., a CONFESSION OF JUDGMENT
Delaware corporation, SG
Environmental Solutions Corp., a
Delaware corporation, and SG Echo,
LLC, a Delaware limited liability
company,
Defendants.
Before the Court is Plaintiff’s Motion for Entry of Judgment Pursuant to Confession
of Judgment. ECF 8. Defendants have filed no response, in opposition or otherwise, to this
motion. A hearing was held on October 28, 2024, in which counsel for Plaintiff appeared,
but no appearance was made by Defendant or by any representative of Defendant. See ECF
16 (H’rng Minute Entry). Based on the representations of Plaintiff’s counsel during the
hearing about his recent communications with counsel for Defendant and on the service
documents filed by Plaintiff (see ECF 15), the Court is satisfied that Defendant is aware of
the pending motion for entry of judgment, was aware of the October 28 hearing, and has
elected to take no position on Plaintiff’s request. Therefore, the Court, having duly
considered Plaintiff’s uncontested submissions, now makes the following:
FINDINGS OF FACT
A. Parties and Jurisdiction
1. Farnam Street Financial, Inc. (“Farnam Street”) is a Minnesota corporation
with its corporate headquarters and principal place of business located in Minnetonka,
Minnesota. (Morgan Decl. ¶ 2).
2. Safe & Green Holdings Corp. (“Holdings”) is a Delaware corporation with
its principal place of business located in Florida. (Ashfield Decl. ¶ 3, Ex. A.)).
3. SG Environmental Solutions Corp. (“S&G”), a wholly-owned subsidiary of
Holdings, is a Delaware corporation with its principal place of business located in Florida.
Based on the citizenship of its sole member—Holdings—S&G is a citizen of Delaware and
Florida. (Ashfield Decl. ¶ 5, Ex. C (“Settlement Agreement”) at p.1)
4. SG Echo, LLC (“SG Echo”), a wholly-owned subsidiary of Holdings, is a
Delaware limited liability company. Based on the citizenship of its sole member—
Holdings—SG Echo is a citizen of Delaware and Florida. (Id.)
5. The Court has subject-matter jurisdiction over this case under 28 U.S.C. §
1332(a)(1) based upon the complete diversity of citizenship between the parties and the
fact that the amount in controversy, exclusive of costs and interest, exceeds the sum of
$75,000.00.
6. The Court has personal jurisdiction over Holdings, S&G and SG Echo based
upon the terms of the Confession of Judgment at issue in this case. (See Ashfield Decl. ¶
4, Ex. B (“Confession”) at ¶ 10.).
7. Venue is proper in this judicial district under 28 U.S.C. § 1391(b)(2) and the
terms of the Confession of Judgment at issue in this case. (Id.)
8. In October 2021, S&G, formerly known as SG Blocks, Inc., and Farnam
Street entered into that certain Lease Agreement identified by number SGI01321 (the
“Lease Agreement”). (Confession ¶ 1.)
9. In connection with the Lease Agreement, S&G and Farnam Street entered
into Lease Schedule 001 (“Schedule 1”). (Id.)
10. S&G accepted and installed $1,556,163.00 worth of equipment pursuant to
the Lease Agreement and Schedule 1.
11. On October 17, 2023, Farnam Street commenced an action against S&G in
the United States District Court for the District of Minnesota to collect the amounts due
under the Lease Agreement and Schedule 1.1
12. In July 2024 and in an effort to resolve the litigation and allow the Defendants
to continue using the Equipment, Farnam Street and the Defendants entered into a
Settlement Agreement. Under paragraph 3 of the Settlement Agreement, S&G agreed to
pay Farnam Street as follows:
i. Pay $167,056.00 to Farnam Street as a security deposit for the leasing
transaction described in the Settlement Agreement (the “Deposit”), on or
before August 1, 2024; and
ii. Make the required monthly lease payments in the amount of $65,880.95
(plus applicable taxes), starting on August 1, 2024.
13. Holdings and SG Echo guaranteed all obligations of S&G. (Settlement
Agreement ¶ 4.)
1 See Case No. 23-CV-3212.
14. To secure the payments due under the Settlement Agreement, the Defendants
executed and delivered to Farnam Street the Confession. (Id. at ¶ 8.)
15. Pursuant to the Confession, the Defendants agreed that if they failed to make
a Deposit or any monthly lease payment when due, any attorney designated by Farnam
Street could appear in person or by affidavit on behalf of Farnam Street in the United States
District Court of Minnesota to confess judgment against Defendants, jointly and severally,
and in favor of Farnam Street for the “Judgment Amount” of $2,000,000 as reduced by any
payments made after execution of the Settlement Agreement. (Confession ¶ 8.)
16. The Defendants further agreed that Minnesota courts would have personal
jurisdiction over them and the authority to enter judgment pursuant to the Confession.
Finally, the Defendants agreed that they would not be entitled to any right to notice, hearing
or opportunity to protest prior to the entry of judgment pursuant to the Confession of
Judgment. (Id. at ¶ 9.)
17. The Defendants were represented by legal counsel, Cory Barnwell of
Barnwell Law Group, P.C. and Shawn M. Perry of Perry & Perry, PLLP, in connection
with the prior litigation, as well as the negotiation and execution of the Settlement
Agreement and Confession. (Ashfield Decl. ¶ 6).
B. Default
18. The Defendants have not made any payments to Farnam Street after
execution of the Settlement Agreement, including the Deposit or the monthly lease
payments due on or before August 1, 2024 and September 1, 2024. (Morgan Decl. ¶ 3.)
19. Farnam Street provided written notice of Default for failure to pay the
Deposit and monthly lease payment due on or before August 1, 2024. (Ashfield Decl. ¶ 7,
Ex. D.)
20. The Defendants agreed that the amount of the judgment to be entered against
them under the Confession upon default would be in the amount of $2,000,000.00, less any
payments received after execution of the Settlement Agreement. (Confession at p. 1, ¶ 7.)
21. Based upon the foregoing, the amount due under the Confession remains
$2,000,000.00.
CONCLUSIONS OF LAW
1. Confessions of judgment are valid and enforceable under Minnesota law if
they are evidenced by a written statement signed and verified by the obligor showing that
the confessed amount is justly due and owing to the holder. Minn. Stat. § 548.22.
2. A federal court has the power and authority to enter a judgment pursuant to
a confession of judgment as long as subject-matter jurisdiction exists and the confession of
judgment was voluntarily, knowingly and intelligently made. D.H. Overmyer Co., Inc. v.
Frick Co., 405 U.S. 174, 186(1972); Orlando Residence, Ltd. v. Nelson, 565 Fed. App’x 212, 222 (4th Cir. 2014) (“Federal courts have the power to enter confession judgments, as has been recognized by courts time and again”); National Leasing Corp. v. Williams,80 F.R.D. 416, 418
(W.D. Pa. 1978)(“There is no legal prohibition against entering judgment by confession in a court of the United States, if federal jurisdiction exists”);28 U.S.C. § 1874
(“In all actions to recover the forfeiture annexed to any articles of agreement,
covenant, bond, or other specialty, wherein the forfeiture, breach, or nonperformance
appears by default or confession of the defendant, the court shall render judgment for the
plaintiff for such amount as is due”).
3. The Court has subject-matter jurisdiction over this case under 28 U.S.C.
§1332(a).
4. The Court has personal jurisdiction over the Defendants under the terms of
the Confession. See Orlando Residence, 565 Fed. App’x at 222-23 (district court may
exercise personal jurisdiction over obligors based upon terms of confession of judgment);
Alland v. Consumers Credit Corp., 476 F.2d 951, 954 (2d Cir. 1973) (same).
5. Venue is proper in this judicial district under 28 U.S.C. § 1391(b)(2) and the
terms of the Confession.
6. The Confession was signed and verified by the Defendants and shows that
the confessed amount is justly due and owing to Farnam Street. (Confession ¶ 9.) The
Defendants were represented by legal counsel in connection with the negotiation and
execution of the Settlement Agreement and Confession of Judgment and entered into the
Confession knowingly, voluntarily and intelligently. (Ashfield Decl. ¶ 6.)
7. Farnam Street is entitled to entry of judgment against the Defendants based
upon the Confession in the amount of $2,000,000.00.
ORDER FOR JUDGMENT
Based upon the foregoing,
IT IS HEREBY ORDERED:
1. That Farnam Street Financial Inc.’s Motion for Entry of Judgment Pursuant
to Confession of Judgment is GRANTED; and
2. That the Clerk of Court shall forthwith enter a money judgment in favor of
Farnam Street and against the Defendants, jointly and severally, in the amount of
$2,000,000.00.
LET JUDGMENT BE ENTERED ACCORDINGLY
Date: October 30, 2024 s/ Katherine Menendez
Katherine Menendez
United States District Judge Trial Court Opinion
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Farnam Street Financial, Inc., a Case No. 24-cv-3249 KMM/TNL
Minnesota corporation,
Plaintiff,
v. ORDER FOR ENTRY OF
JUDGMENT PURSUANT TO
Safe & Green Holdings Corp., a CONFESSION OF JUDGMENT
Delaware corporation, SG
Environmental Solutions Corp., a
Delaware corporation, and SG Echo,
LLC, a Delaware limited liability
company,
Defendants.
Before the Court is Plaintiff’s Motion for Entry of Judgment Pursuant to Confession
of Judgment. ECF 8. Defendants have filed no response, in opposition or otherwise, to this
motion. A hearing was held on October 28, 2024, in which counsel for Plaintiff appeared,
but no appearance was made by Defendant or by any representative of Defendant. See ECF
16 (H’rng Minute Entry). Based on the representations of Plaintiff’s counsel during the
hearing about his recent communications with counsel for Defendant and on the service
documents filed by Plaintiff (see ECF 15), the Court is satisfied that Defendant is aware of
the pending motion for entry of judgment, was aware of the October 28 hearing, and has
elected to take no position on Plaintiff’s request. Therefore, the Court, having duly
considered Plaintiff’s uncontested submissions, now makes the following:
FINDINGS OF FACT
A. Parties and Jurisdiction
1. Farnam Street Financial, Inc. (“Farnam Street”) is a Minnesota corporation
with its corporate headquarters and principal place of business located in Minnetonka,
Minnesota. (Morgan Decl. ¶ 2).
2. Safe & Green Holdings Corp. (“Holdings”) is a Delaware corporation with
its principal place of business located in Florida. (Ashfield Decl. ¶ 3, Ex. A.)).
3. SG Environmental Solutions Corp. (“S&G”), a wholly-owned subsidiary of
Holdings, is a Delaware corporation with its principal place of business located in Florida.
Based on the citizenship of its sole member—Holdings—S&G is a citizen of Delaware and
Florida. (Ashfield Decl. ¶ 5, Ex. C (“Settlement Agreement”) at p.1)
4. SG Echo, LLC (“SG Echo”), a wholly-owned subsidiary of Holdings, is a
Delaware limited liability company. Based on the citizenship of its sole member—
Holdings—SG Echo is a citizen of Delaware and Florida. (Id.)
5. The Court has subject-matter jurisdiction over this case under 28 U.S.C. §
1332(a)(1) based upon the complete diversity of citizenship between the parties and the
fact that the amount in controversy, exclusive of costs and interest, exceeds the sum of
$75,000.00.
6. The Court has personal jurisdiction over Holdings, S&G and SG Echo based
upon the terms of the Confession of Judgment at issue in this case. (See Ashfield Decl. ¶
4, Ex. B (“Confession”) at ¶ 10.).
7. Venue is proper in this judicial district under 28 U.S.C. § 1391(b)(2) and the
terms of the Confession of Judgment at issue in this case. (Id.)
8. In October 2021, S&G, formerly known as SG Blocks, Inc., and Farnam
Street entered into that certain Lease Agreement identified by number SGI01321 (the
“Lease Agreement”). (Confession ¶ 1.)
9. In connection with the Lease Agreement, S&G and Farnam Street entered
into Lease Schedule 001 (“Schedule 1”). (Id.)
10. S&G accepted and installed $1,556,163.00 worth of equipment pursuant to
the Lease Agreement and Schedule 1.
11. On October 17, 2023, Farnam Street commenced an action against S&G in
the United States District Court for the District of Minnesota to collect the amounts due
under the Lease Agreement and Schedule 1.1
12. In July 2024 and in an effort to resolve the litigation and allow the Defendants
to continue using the Equipment, Farnam Street and the Defendants entered into a
Settlement Agreement. Under paragraph 3 of the Settlement Agreement, S&G agreed to
pay Farnam Street as follows:
i. Pay $167,056.00 to Farnam Street as a security deposit for the leasing
transaction described in the Settlement Agreement (the “Deposit”), on or
before August 1, 2024; and
ii. Make the required monthly lease payments in the amount of $65,880.95
(plus applicable taxes), starting on August 1, 2024.
13. Holdings and SG Echo guaranteed all obligations of S&G. (Settlement
Agreement ¶ 4.)
1 See Case No. 23-CV-3212.
14. To secure the payments due under the Settlement Agreement, the Defendants
executed and delivered to Farnam Street the Confession. (Id. at ¶ 8.)
15. Pursuant to the Confession, the Defendants agreed that if they failed to make
a Deposit or any monthly lease payment when due, any attorney designated by Farnam
Street could appear in person or by affidavit on behalf of Farnam Street in the United States
District Court of Minnesota to confess judgment against Defendants, jointly and severally,
and in favor of Farnam Street for the “Judgment Amount” of $2,000,000 as reduced by any
payments made after execution of the Settlement Agreement. (Confession ¶ 8.)
16. The Defendants further agreed that Minnesota courts would have personal
jurisdiction over them and the authority to enter judgment pursuant to the Confession.
Finally, the Defendants agreed that they would not be entitled to any right to notice, hearing
or opportunity to protest prior to the entry of judgment pursuant to the Confession of
Judgment. (Id. at ¶ 9.)
17. The Defendants were represented by legal counsel, Cory Barnwell of
Barnwell Law Group, P.C. and Shawn M. Perry of Perry & Perry, PLLP, in connection
with the prior litigation, as well as the negotiation and execution of the Settlement
Agreement and Confession. (Ashfield Decl. ¶ 6).
B. Default
18. The Defendants have not made any payments to Farnam Street after
execution of the Settlement Agreement, including the Deposit or the monthly lease
payments due on or before August 1, 2024 and September 1, 2024. (Morgan Decl. ¶ 3.)
19. Farnam Street provided written notice of Default for failure to pay the
Deposit and monthly lease payment due on or before August 1, 2024. (Ashfield Decl. ¶ 7,
Ex. D.)
20. The Defendants agreed that the amount of the judgment to be entered against
them under the Confession upon default would be in the amount of $2,000,000.00, less any
payments received after execution of the Settlement Agreement. (Confession at p. 1, ¶ 7.)
21. Based upon the foregoing, the amount due under the Confession remains
$2,000,000.00.
CONCLUSIONS OF LAW
1. Confessions of judgment are valid and enforceable under Minnesota law if
they are evidenced by a written statement signed and verified by the obligor showing that
the confessed amount is justly due and owing to the holder. Minn. Stat. § 548.22.
2. A federal court has the power and authority to enter a judgment pursuant to
a confession of judgment as long as subject-matter jurisdiction exists and the confession of
judgment was voluntarily, knowingly and intelligently made. D.H. Overmyer Co., Inc. v.
Frick Co., 405 U.S. 174, 186(1972); Orlando Residence, Ltd. v. Nelson, 565 Fed. App’x 212, 222 (4th Cir. 2014) (“Federal courts have the power to enter confession judgments, as has been recognized by courts time and again”); National Leasing Corp. v. Williams,80 F.R.D. 416, 418
(W.D. Pa. 1978)(“There is no legal prohibition against entering judgment by confession in a court of the United States, if federal jurisdiction exists”);28 U.S.C. § 1874
(“In all actions to recover the forfeiture annexed to any articles of agreement,
covenant, bond, or other specialty, wherein the forfeiture, breach, or nonperformance
appears by default or confession of the defendant, the court shall render judgment for the
plaintiff for such amount as is due”).
3. The Court has subject-matter jurisdiction over this case under 28 U.S.C.
§1332(a).
4. The Court has personal jurisdiction over the Defendants under the terms of
the Confession. See Orlando Residence, 565 Fed. App’x at 222-23 (district court may
exercise personal jurisdiction over obligors based upon terms of confession of judgment);
Alland v. Consumers Credit Corp., 476 F.2d 951, 954 (2d Cir. 1973) (same).
5. Venue is proper in this judicial district under 28 U.S.C. § 1391(b)(2) and the
terms of the Confession.
6. The Confession was signed and verified by the Defendants and shows that
the confessed amount is justly due and owing to Farnam Street. (Confession ¶ 9.) The
Defendants were represented by legal counsel in connection with the negotiation and
execution of the Settlement Agreement and Confession of Judgment and entered into the
Confession knowingly, voluntarily and intelligently. (Ashfield Decl. ¶ 6.)
7. Farnam Street is entitled to entry of judgment against the Defendants based
upon the Confession in the amount of $2,000,000.00.
ORDER FOR JUDGMENT
Based upon the foregoing,
IT IS HEREBY ORDERED:
1. That Farnam Street Financial Inc.’s Motion for Entry of Judgment Pursuant
to Confession of Judgment is GRANTED; and
2. That the Clerk of Court shall forthwith enter a money judgment in favor of
Farnam Street and against the Defendants, jointly and severally, in the amount of
$2,000,000.00.
LET JUDGMENT BE ENTERED ACCORDINGLY
Date: October 30, 2024 s/ Katherine Menendez
Katherine Menendez
United States District Judge Reference
- Status
- Unknown