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Td Bank, N.A., As Successsorin-Interest To Td Banknorth, N.A v. Clinton Center Investors


December 17, 2012


On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9542-10.

Per curiam.


Argued November 14, 2012

Before Judges Reisner and Yannotti.

Defendants appeal from an order entered by the Law Division on January 27, 2012, granting plaintiff's motion for summary judgment and denying defendants' cross-motion for additional discovery, to adjourn the trial date and for leave to amend their answer. We affirm.

In May 2006, plaintiff entered into an agreement under which plaintiff agreed to loan defendant Clinton Center Investors, LLC (Clinton Center), up to $6,322,000. The loan was evidenced by a promissory note, and secured by a mortgage upon Clinton Center's leasehold interest in certain property in Hunterdon County, New Jersey, which had been improved with a retail shopping center. The loan was to provide Clinton Center with monies to improve the shopping center, divide the space previously occupied by a supermarket, and rent that space to multiple tenants.

Defendants Vincent Castagno, Bruce M. Jeffrey, William L. Mooney and Roy W. Pascal executed agreements personally guaranteeing full payment and performance of Clinton Center's obligations under the loan and mortgage agreements. The maturity date of the loan was May 1, 2009.

Thereafter, defendants sought an extension of maturity date of the loan. Defendants claimed to have spent substantial time and money to obtain site plan approval to renovate the shopping center. They said they could not complete the anticipated renovations before the commercial tenancy market came to a "virtual standstill" in the fourth quarter of 2007. Defendants' say that their plans for the shopping center were also adversely affected by the economic downturn that began in 2008.

The parties entered into negotiations to extend the maturity date of the loan, and plaintiff and Clinton Center executed a restated promissory note and mortgage modification agreement, dated July 28, 2009, which extended the maturity date of the loan through May 1, 2010.

Defendants defaulted in the performance of their obligations under the agreements, by failing to pay the amounts due and owing when the loan matured. The loan documents provided, among other things, that failure to pay any indebtedness when due constitutes an event of default, which permits plaintiff to declare the full amount of the unpaid principal and interest due to be immediately payable and to foreclose upon the mortgage.

In August 2010, plaintiff wrote to defendants, stated that they were in default under the loan documents, and declared the full amount of the unpaid principal and interest immediately due and payable. When defendants failed to pay the amounts demanded, plaintiff filed this action seeking recovery of the amounts due. As of November 18, 2011, the amount due on the note was $5,914,279.24, plus interest.

Defendants filed an answer to the complaint, denying liability. They also asserted twenty-seven separate affirmative defenses, claiming that recovery was barred for various reasons, including waiver and estoppel, mutual mistake, the doctrine of unclean hands, the doctrine of impossibility of performance, and fraud. Defendants also asserted counterclaims in which they alleged, among other things, that they were entitled to a further extension of the maturity date on the loan beyond May 1, 2010, and plaintiff's failure to further extend the maturity date was a breach of the covenant of good faith and fair dealing.

After the discovery end date, the court scheduled the matter for trial on February 23, 2012. On December 23, 2011, plaintiff filed a motion for summary judgment. Defendants opposed plaintiff's motion and filed a cross-motion seeking additional time for discovery, adjournment of the trial date and leave to file an amended answer.

Judge Robert C. Wilson considered the motions on January 20, 2012, and filed a written opinion dated January 27, 2012, in which he concluded that there was no genuine issue of material fact and plaintiff was entitled to judgment as a matter of law. The judge also concluded that there was no basis for the relief sought by defendants on their cross-motion. The judge memorialized his decisions in an order filed on January 27, 2012. This appeal followed.

Defendants argue that (1) there were genuine issues of material fact that precluded entry of summary judgment for plaintiff; (2) the motion judge abused his discretion by denying defendants' adjournment request; and (3) the court erred by denying defendants' motion for leave to amend their answer.

We are satisfied from our review of the record that these arguments are without sufficient merit to warrant extended discussion. R. 2:11-3(e)(1)(E). We accordingly affirm the order of January 27, 2012, substantially for the reasons stated by Judge Wilson in his thorough and comprehensive written opinion. We add the following brief comments.

When reviewing an order granting summary judgment, we apply the same standard that the trial court applies in determining whether to grant that relief. Wilson ex rel. Manzano v. City of Jersey City, 209 N.J. 558, 564 (2012); Liberty Surplus Ins. Co. v. Nowell Amoroso, P.A., 189 N.J. 436, 445 (2007). Therefore, we must determine whether the evidence before the court on the motion shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

"An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c). The court should not hesitate to grant summary judgment when the evidence on a factual issue "'is so one-sided that one party must prevail as a matter of law.'" Brill, supra, 142 N.J. at 540 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).

Here, there was no genuine issue as to the fact that defendants defaulted on the note owing on the maturity date and the fact that defendants had not cured the default. Judge Wilson concluded that plaintiff had established all of the elements of its cause of action for recovery on the note. The judge also concluded that defendants had not presented sufficient evidence to support any of the equitable defenses they had asserted. We are convinced that the record fully supports Judge Wilson's conclusions and his determination that plaintiff was entitled to judgment as a matter of law on its claim.

Defendants contend, however, that they presented sufficient evidence to raise a genuine issue of material fact as to whether plaintiff orally agreed to extend the maturity date beyond May 2010, as long as defendants complied with the terms of the amended and restated loan documents. Defendants assert that at a meeting on June 24, 2009, plaintiff's representatives agreed to extend the maturity date of the loan on these terms.

Defendants maintain that a nine-month extension of the loan maturity date "would accomplish nothing" because they would not be in a better position to repay the loan after that extension. They additionally claim that they paid a significant amount of money in the extension period with the expectation that plaintiff "would live up to its oral promise to further extend the loan."

We are not persuaded by these arguments. As Judge Wilson noted in his opinion, the parties bargained for and agreed on one extension of the loan maturity date to May 10, 2010. Defendants did not produce any documentation to show that plaintiff or any of its employees had expressly agreed there would be a further extension of the loan maturity date. Indeed, as Judge Wilson noted, the correspondence between the parties makes no mention of any such commitment.

In support of their argument, defendants rely upon a certification of William Mooney (Mooney), dated January 19, 2012, which defendants submitted in opposition to plaintiff's summary judgment motion. Mooney was a member of Clinton Center.

In his certification, Mooney said that "statements regarding further extending the Loan occurred at a meeting on June 24, 2009 in Ramsey, New Jersey" between the guarantors and plaintiff's representatives. Mooney said that Peter Lastina made the "statements." However, statements "about" extending the loan do not constitute an agreement to extend the loan.

Defendants further argue that the motion judge abused his discretion by refusing to adjourn the scheduled trial date, and by denying their requests to extend the time for discovery. We disagree. Rule 4:24-1(c) prohibits extensions of time for discovery after "a trial date has been set absent a showing of exceptional circumstances." Ponden v. Ponden, 374 N.J. Super. 1, 8 (App. Div. 2004) (citing R. 4:24-1), certif. denied, 183 N.J. 212 (2005).

To establish exceptional circumstances, the moving party must: (1) explain why discovery was not completed in the required time and show that it diligently pursued discovery in the prescribed discovery period; (2) establish that the additional discovery is essential; (3) explain why an extension of time for discovery was not sought before the discovery end date; and (4) establish that the circumstances involved were clearly beyond the control of the party and attorney seeking the extension. Rivers v. LSC Partnership, 378 N.J. Super. 68, 79 (App. Div.) (citing Vitti v. Brown, 359 N.J. Super. 40, 51 (Law Div. 2003)), certif. denied, 185 N.J. 296 (2005).

Here, Judge Wilson correctly noted that defendants had not diligently pursued discovery in the prescribed discovery period. Indeed, defendants had not complied with plaintiff's discovery demands and did not serve their own requests for discovery until after the discovery end date. Furthermore, defendants had not shown that the additional discovery they wanted was essential, did not explain the failure to seek the extension before the discovery end date, and did not demonstrate their failure to undertake and complete discovery was due to circumstances beyond their control.

Thus, Judge Wilson did not abuse his discretion in denying defendants' application to re-open discovery. Because defendants' application to adjourn the scheduled trial date was premised on the need for more time for discovery, the judge did not err by denying that motion as well.

Defendants also argue that the motion judge erred by denying their motion for leave to file an amended answer so that they could assert another counterclaim against plaintiff. That claim was based on plaintiff's alleged negligent failure to cure defendants' default on the underlying ground lease for the shopping center. This contention is without merit.

A motion seeking leave to amend a pleading "rests in the court's sound discretion." Kernan v. One Wash. Park Urban Renewal Assocs., 154 N.J. 437, 457 (1998). The motion may be denied if made on the eve of trial. Verni ex rel. Burstein v. Stevens, Inc., 387 N.J. Super. 160, 195 (App. Div. 2006) (citing Pressler, Current N.J. Court Rules, comment 2.2.2. on R. 4:9-1 (2006)), certif. denied, 189 N.J. 429 (2007). The motion may also be denied when the amended pleading lacks merit. Id. at 197.

We are satisfied that Judge Wilson did not abuse his discretion by denying the application because defendants did not seek leave to amend their answer until after the time for discovery had run and the trial date was set; amendment to the answer would add a new claim requiring further discovery; and the claim was of dubious merit. The judge aptly noted that the loan documents did not impose upon plaintiff any obligation to cure defendants' default under the underlying ground lease.



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