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The Bancorp Bank v. Condor Developers, LLC

United States District Court, D. New Jersey

August 4, 2017

THE BANCORP BANK, Plaintiff,
v.
CONDOR DEVELOPERS, LLC, DANIEL BROWN, NJG ACQUISITIONS, LLC, ENPHRONT INC., and STATE OF NEW JERSEY, Defendants.

          PHILIP S. ROSENZWEIG SILVERANG & DONOHOE LLC On behalf of Plaintiff

          DAVID JOHN AZOTEA LEVINE STALLER SKLAR CHAN & BROWN PA On behalf of Defendants

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns claims by Plaintiff, The Bancorp Bank, regarding the default on the financing of a property in Atlantic City, New Jersey that provides housing to veterans. Presently before the Court is Plaintiff's motion for summary judgment against Defendants Condor Developers, LLC (“Condor”), NJG Acquisitions, LLC (“NJG”) and Daniel Brown (“Brown”). For the reasons expressed below, Plaintiff's motion will be granted in part and continued in part.

         BACKGROUND

         In 2008, Defendants took over a 14-unit townhome project in Atlantic City, New Jersey as housing for U.S. military veterans. Due to various problems with construction and damage from Super Storm Sandy in October 2012, Defendants were unable to complete the project, even with increased financing, and eventually defaulted on loans and lines of credit extended by Plaintiff for principal in the amounts of $5, 100, 000 and $950, 000, respectively.[1]The defaulted obligations were backed by personal guarantees executed by NJG and Brown.[2]

         In June 2015, Plaintiff instituted the instant foreclosure and breach of contract action against Condor, NJG, and Brown. In February 2016, the Court held a hearing on Plaintiff's motion to appoint a receiver, and the Court granted that motion. The receiver has been managing the property ever since.

         Plaintiff has filed a motion for summary judgment in its favor on all of its claims against Condor, NJG, and Brown, and on Defendants' counterclaims against it, which include claims for fraud in the inducement, breach of covenant of good faith and fair dealing, intentional misrepresentation, malicious prosecution, and unlawful permanent contract rescission.

         Condor and NJG do not contest that judgment be entered on Plaintiff's claims against them. Brown, however, argues that disputed issues of material fact remain over his obligation under his personal guarantee. Brown admits that he signed a guarantee on the line of credit, but denies that he is individually liable. Brown claims that Plaintiff's former vice president, Michael Schreiber, stated to Brown on various occasions that the loans would be extended, and Brown would not be held personally liable for the line of credit upon any potential default because the bank would simply repossess the property. Brown argues that this dispute also compels the Court to deny Plaintiff's motion for summary judgment on his counterclaims.

         In its moving brief, Plaintiff argues that it is entitled to summary judgment on Brown's counterclaims because he has not provided any evidence to support his claims, including failing to depose Michael Schreiber or any other bank representative. Plaintiff argues that Brown's self-serving testimony regarding Schreiber's alleged fraud to induce Brown to sign a personal guarantee is insufficient to maintain his counterclaims. Plaintiff, however, did not file a reply brief in further support of its motion to specifically counter Brown's argument that his testimony presents a material disputed fact that precludes Plaintiff's motion for summary judgment on its breach of contract claims against Brown.

         DISCUSSION

         A. Jurisdiction

         This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75, 000. The citizenship of the parties is as follows: Plaintiff is a citizen of the State of Delaware, and Defendants are citizens of the States of New York and New Jersey.[3]

         B. Standard for ...


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