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Grande Village LLC v. CIBC Inc.

United States District Court, D. New Jersey

March 30, 2018

GRANDE VILLAGE LLC, GRANDE PROPERTIES, LLC, WILLINGBORO TOWN CENTER URBAN RENEWAL NORTH, LLC, WILLINGBORO TOWN CENTER NORTH MANAGER, LLC, WILLIAM T. JULIANO, and THOMAS E. JULIANO, Plaintiffs,
v.
CIBC INC. and CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, Defendants. CIBC INC. and CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, Plaintiffs,
v.
GRANDE VILLAGE LLC, GRANDE PROPERTIES, LLC, WILLINGBORO TOWN CENTER URBAN RENEWAL NORTH, LLC, WILLINGBORO TOWN CENTER NORTH MANAGER, LLC, WILLIAM T. JULIANO, and THOMAS E. JULIANO, Defendants.

          DAVID L. BRAVERMAN BENJAMIN ALEX GARBER PETER J. LEYH BRAVERMAN KASKEY, P.C. ONE LIBERTY PLACE, 56TH FLOOR 1650 MARKET STREET PHILADELPHIA, PA 19103 On behalf of Grande Village LLC, Grande Properties, LLC, Willingboro Town Center Urban Renewal North, LLC, Willingboro Town Center North Manager, LLC, William T. Juliano, and Thomas E. Juliano (Plaintiffs in the 14-3495 action and Defendants in the 14-5047 action)

          ADAM K. DERMAN DAVID M. DUGAN CHIESA SHAHINIAN & GIANTOMASI PC THE OFFICES OF CRYSTAL LAKE ONE BOLAND DRIVE WEST ORANGE, N.J. 07052 On behalf of CIBC Inc. and Canadian Imperial Bank of Commerce, New York Agency (Defendants in the 14-3495 action and Plaintiffs in the 14-5047 action)

          OPINION (REDACTED)

          NOEL L. HILLMAN, U.S.D. JUDGE.

         This is a breach of contract matter involving various loan and mortgage documents secured for retail space in New Jersey. This summary judgment motion relates to two dockets open before the Court: Docket No. 14-3495 (“the 14-3495 action”) and Docket No. 14-5047 (“the 14-5047 action”).[1] For the reasons that follow, the Court will grant summary judgment in part, and deny summary judgment in part. The Court will further sua sponte consolidate these matters pursuant to Federal Rule of Civil Procedure 42(a) for all purposes. The remaining claims in both actions will proceed in a consolidated bench trial before this Court.[2]

         I. Background

         The Court begins by briefly introducing the relevant parties in these matters. CIBC Inc. is a New York corporation, and Canadian Imperial Bank of Commerce, New York Agency is a New York branch office of Canadian Imperial Bank of Commerce. These are the lenders on the loan and mortgage documents in these matter. The Court will refer to these entities jointly as “CIBC.”[3]

         Grande Village LLC (“Grande Village”), Grande Properties, LLC (“Grande Properties”), Willingboro Town Center Urban Renewal North, LLC and Willingboro Town Center North Manager, LLC (collectively “Willingboro”) are limited liability companies whose sole members are William Juliano and Thomas Juliano.[4] The Court will refer to these four limited liability companies, together with William Juliano and Thomas Juliano, as “the Juliano Parties.”[5]

         A. The Initial Loan Documents

         1. The Willingboro Loan

         A Construction Loan Agreement was entered into on September 14, 2007 between Willingboro as borrower and CIBC as lender (the “Willingboro Loan Agreement”). The Willingboro Loan Agreement was for the Willingboro Town Center and was for the amount of $6, 200, 000. The loan was secured by a mortgage, as well as performance and payment guaranties executed by William Juliano and Thomas Juliano.

         The Willingboro Loan Agreement required the furnishing of the following financial information:

• Annual financial statements for Borrower
• Annual financial statements for Guarantors
• Annual financial covenants certifications for Guarantors
• Annual operating budgets
• Monthly unaudited financial statements and operating cash flow statements
• Quarterly certificates of the principal financial or accounting officer stating that no default or event of default which has occurred is continuing
• Such additional financial information reasonably required

         2. The Grande Properties Loan

         A Construction Loan Agreement was entered into on May 15, 2008 between Grande Properties as borrower and CIBC as lender (the “Grande Properties Loan Agreement”). The Grande Properties Loan Agreement was for an aloft Hotel project and was for the amount of $32, 200, 000. The loan was secured by a mortgage, as well as performance and payment guaranties executed by William Juliano and Thomas Juliano.

         The Grande Properties Loan Agreement required the furnishing of the following financial information:

• Annual financial statements for Borrower
• Annual financial statements for Guarantors
• Quarterly financial covenant certifications for Guarantors
• Annual financial covenant certifications for Guarantors
• Annual operating budgets
• Monthly unaudited financial statements and operating cash flow statements
• Quarterly certificates of the principal financial or accounting officer stating that no default or event of default has occurred and is continuing
• Such additional financial information reasonably required

         3. The Grande Village Loan

         A “Mortgage, Assignment of Leases and Rents and Security Agreement” was entered into on November 10, 2008 between Grande Village as borrower and CIBC as lender (the “Grande Village Loan Agreement”). The Grande Village Loan Agreement was for the amount of $8, 400, 000. The Grande Village loan documents provided for an initial advance of $6, 365, 500, plus an additional advance of $2, 034, 500 for capital improvements (the “Subsequent Advance”). The loan was secured by a mortgage, as well as performance and payment guaranties executed by William Juliano and Thomas Juliano.

         The Grande Village Loan Agreement required the furnishing of the following financial information:

• Copies of all tax returns filed by Borrower
• Monthly operating statements for the property
• Quarterly operating statements for the property
• Annual balance sheets for the property
• Annual financial statements
• A current rent roll
• Such additional financial information reasonably required

         Exhibit B to the Grande Village Loan Agreement was entitled “Future Advances.” Section 1 of Exhibit B, entitled “Timing and Method of Advances, ” provided that the amount of $6, 365, 500 represented the “Initial Advance, ” which “represent[ed] a portion of the principal amount of the Loan.” It further provided:

Subsequent to the date hereof, Lender by its acceptance of this Mortgage, agrees to lend, and Borrower agrees to borrow, up to the principal amount of $2, 034, 500 (the “Subsequent Advance[, ”] such amount being the difference between the face amount of the Note and the amount of the Initial Advance) and shall be used by Borrower solely to pay for Approved Costs (as that term is hereinafter defined), subject to all of the terms, conditions, and agreements contained in the Loan Documents and in this Exhibit B.

         Section 2 of Exhibit B, entitled “Approved Costs, ” defined what constituted approved costs under Section 1:

At any time and from time to time during the term of the Loan Borrower may request an Advance . . . to pay for the costs of capital improvements and renovations to the Property . . . pursuant to plans and specifications delivered to and approved by Lender in accordance with this Exhibit B . . . and in accordance with a budget for each Capital Improvement undertaken by Borrower, which shall be subject to Lender's prior approval . . . .

         Section 4 provides several conditions precedent to the disbursement of the Subsequent Advance. Section 14 further provides that “Advances shall only be made in connection with costs incurred by Borrower for Approved Costs. Borrower agrees that all Advances shall be used only for payment of Approved Costs for which such Advances were made.”

         Section 13 governs the “Deficiency Deposit” requirement and provides as follows:

If at any time, the projected cost of any individual Budget Line Item exceeds the amount set forth in the Budget for such individual Budget Line Item, as determined by Lender in its reasonable discretion, then Borrower shall, at Lender's request, deposit with Lender within five (5) days of such request cash in an amount sufficient to cover such deficiency . . . . Lender shall not be required to make any Advance before receiving payment of any such Deficiency Deposit and the prior application of any such Deficiency Deposit to the payment of the cost of the Approved Costs.

         4. Transfer from the Real Estate Finance Group to Special Loans

         From the date of inception through July 2013, the loans were managed by CIBC's Real Estate Finance group (REF). On July 29, 2013, CIBC transferred the loans from REF to Special Loans, a department of CIBC's credit risk management. At the time the loans were transferred from REF to Special Loans, the loans were current on payments owed to CIBC. The reasoning behind the transfer to Special Loans is a point of contention between the parties and will be addressed below.

         B. Performance and Payment Guarantees

         A September 14, 2007 “Performance and Completion Guaranty” was executed between William Juliano and Thomas Juliano, as guarantors, and CIBC with regard to the Willingboro Loan Agreement. It provided that the guarantor was required to maintain a net worth of at least $60, 000, 000 at any date of determination. The September 14, 2007 “Payment Guaranty” similarly detailed this net worth requirement. A May 15, 2008 “Performance and Completion Guaranty” and “Payment Guaranty” executed between the same parties with regard to the Grande Properties Loan Agreement required similarly but with a net worth requirement of $70, 000, 000. A November 10, 2008 “Performance and Completion Guaranty” with regard to the Grande Village Loan Agreement similarly required a net worth of at least $60, 000, 000.

         C. Loan Modifications, Cross-Default, and Cross-Collateralization Agreements

         On July 21, 2011, CIBC and the Juliano Parties entered into several agreements to modify the loans - a “Mortgage Modification, Cross-Collateralization, Cross-Contribution and Cross-Default Agreement” (the “Cross-Collateralization Agreement”) as well as three separate loan modification agreements. Among other modifications, the agreements cross-collateralized the loans and extended the original maturity dates to May 10, 2013. In addition to setting a common extended maturity date of May 10, 2013, the loan modification agreements also provided the Juliano Parties with an opportunity to extend the maturity date up to three times, in twelve-month increments, in the event they satisfied certain historical financial performance tests. The latest point in time to which the maturity date could be extended under the terms of the loan modification agreements, absent amendment or modification, was May 10, 2016.

         The Cross-Collateralization Agreement provided that an event of default under any of the loan documents constituted an event of default under all of the loan documents. It further held that all collateral held under any of the loan documents also secured the obligations under the other loan documents.

         Pursuant to the Cross-Collateralization Agreement, the aggregate principal amount under the loans was $46, 800, 000. The loan modification agreements also reduced the net worth requirement for William Juliano and Thomas Juliano to $15, 000, 000. The modification agreements further placed caps on the payment guaranties and required the Juliano Parties “provide monthly operating statements for the Property.”

         D. The State and West Marine Leases

         In early 2013, Grande Village procured two new commercial leases at the Grande Village Center - one with West Marine Products, Inc.[6] (the “West Marine Lease”) and one with the State of New Jersey[7] (the “State Lease”). Both leases were executed in August 2013, and both required Grande Village construct significant tenant improvements to fit out the property within a set timeframe, at the risk of penalties.

         The West Marine Lease provided that the “Landlord shall use reasonable efforts to cause the Delivery Date to occur on or before February 3, 2014.” Pursuant to the West Marine Lease, “[i]f the Delivery Date does not occur by March 1, 2014, ” certain monetary penalties would apply.

         The State Lease provided that, if the premises “are not ready for acceptance in accordance” with a schedule set between the parties, “the State shall be entitled to cancel the Lease upon ten (10) days' prior written notice to the Lessor.” The State Lease also provided for liability “for the State's damages and injuries stemming from the delay.”

         E. Loan Modification Negotiations and Agreements

         The Juliano Parties initiated negotiations with CIBC on May 7, 2013, with a letter from Thomas Juliano to CIBC. Thomas Juliano stated:

As you know, we currently have two leases in our possession for Grande Village. I have attached our contractors estimate for the work, as well as a spreadsheet that shows other costs we estimate (architect fees, broker commissions etc[.]). The total estimated cost is $3, 120, 000. Currently there is approximately $1, 980, 000 available to fund the construction, which leaves us approximately $1, 140, 000 short. There is over $494, 000 in escrow at this time. We also estimate that between now and August you will receive approximately $350, 000 (conservatively) in excess cash flow.
We propose that these proceeds along with the Julianos providing the difference of approximately $300, 000 be used to complete the construction and fit out of West Marine and the Department of Labor - provided that upon completion of the fit out - we are able to take CIBC out of this deal for $8, 700, 000. This will get the Bank whole on this site and leave the Bank with the aloft and Willingboro.
. . . .
. . . [H]ere is the bottom line. We are offering CIBC a way out of this deal. We will be taking the risk to fill the Office Depot in two years. If we don't work something out, there is no way we can get you whole. I don't think we could get you much more than $4, 000, 000 for this site today. If you advance us the fit out money (which is required under the loan) and we put in some of the shortfall we can take the bank out at the end of construction. We have lined up some hard money lenders to do this. It is the only way we could get the bank out. Most lenders will not finance this deal with the Office Depot lease expiring in two years.

         Following this letter, CIBC and the Juliano Parties entered into a May 13, 2013 Agreement to govern their negotiations, in which the following was agreed upon:

The parties hereto wish to have discussions and other communications . . . about (a) the parties' rights, obligations and performance under the Note, the Security Instrument, the other Loan Documents and the Modification Documents; (b) a possible restructuring or other resolution or modification of the Loan or the Loans . . .; (c) CIBC's conditions or requirements for any Modification; (d) the status and future of the Property, the Loan and the Loans; and (e) any other matter relating to the Property, the Loan or the Loans that may arise in connection with the foregoing.
. . . .
. . . Our contemplated Discussions may be lengthy and complex. While we may reach agreement on one or more preliminary issues involving the Loan or the Loans, we all agree that no party hereto shall be bound by any agreement on any issue(s) until such agreement is reduced to a written agreement which is executed by each of CIBC, Borrower and the Guarantor. . . .
Any party hereto may, in its sole and absolute discretion, prepare a term sheet or any other written proposal or outline (any of the foregoing, a “Term Sheet”) for further Discussion and possible preparation of draft documents. Any Term Sheet is for discussion only. No. Term Sheet or any preparation, distribution, response, or failure to respond to it shall constitute any party's offer, agreement, or commitment to enter into a Modification.

(emphasis added).

         In a May 13, 2013 Memorandum from CIBC to the Juliano Parties, CIBC made a counterproposal to the Juliano Parties' first attempt at negotiations:

As sanctioned in the pre-negotiation letters (executed on May 13, 2013) with respect to the subject loans, please find below terms for DISCUSSION PURPOSES ONLY for a proposed modification of the terms of the subject loans, which together make up the cross-collateralized loan group.
We believe that the proposed State of New Jersey and West Marine tenants are accretive in value to the property and we support your efforts to finalize their leases. To facilitate the financing of the proposed costs to construct and fit out these respective tenants' proposed space, we present the below terms for DISCUSSION PURPOSES ONLY.

         The May 13, 2013 Memorandum went on to state, with reference to the Grande Village property, a “Listing for Sale” term and a “Sales Proceeds” term:

Listing for Sale: Upon the event of both the State of New Jersey and West Marine taking occupancy (expected May 2014), the property shall be listed for sale with a national third party brokerage firm, and sold within the six months thereafter.
Sales Proceeds: As Is - upon sale of the property, all excess proceeds from the sale shall be used to reduce the debt on Willingboro and Grande Properties (aLoft).

         In a July 23, 2013 e-mail from the Juliano Parties to CIBC, the Juliano Parties stated: “The old term sheet is in no way appealing to us at all. So that is a non starter for us.” Thus, the Juliano Parties rejected the May 13, 2013 term sheet.

         A December 20, 2013 Summary Term Sheet, entitled “Extension of Grande Village LLC Loan, ” contained a section entitled “Sales Process.” It stated, in pertinent part:

Promptly upon receipt of a certificate of occupancy with respect to the leases with West Marine Products, Inc. and the State of New Jersey (but in no event later than April 30, 2014), the Borrower shall retain a real estate broker . . . to market and sell the Property and shall thereafter continue the retention of the Broker at all times any portion of the Loan remains outstanding.

         It further provided, in all caps (removed):

This term sheet is for discussion purposes only as an indication of the general parameters of a potential transaction and does not constitute, and should not be construed in any way as, a commitment on the part of any lender in connection with the transactions described herein on the terms described herein or otherwise. Such a commitment would require, among other things, additional due diligence and other necessary reviews, as well as receipt of all necessary internal approvals. The terms and conditions contained herein are indicative only and do not represent actual terms and conditions agreed to by any party. This term sheet does not purport to contain all transaction terms and terms contained herein are subject to modification.

         Grande Village rejected the December 20, 2013 Summary Term Sheet later that month. In the e-mail rejecting the proposal, the Juliano Parties proposed “that it pay off the loan in 60 days at $5, 200, 000.00, which is a discount but which provides a substantial return of CIBC's loan.” CIBC rejected this offer, stating “a discounted payoff on the Grande Village loan does not work for CIBC.”

         While negotiations continued into 2014, the parties failed to successfully negotiate any further modifications for the loan agreements.[8]

         F. Budget Approval and Request for Subsequent Advance

         During the negotiations described above, the Juliano Parties sent a November 8, 2013 letter to CIBC regarding the Grande Village property to initiate the process of obtaining the Subsequent Advance funds. They also provided what CIBC argues was the first proposed budget for the capital improvements.[9] It stated:

As you know, Borrower has entered into leases with West Marine Products, Inc. and the State of New Jersey to lease space in the Property. Borrower has submitted copies of the leases to Lender, and Lender has approved the same. Both leases require the Borrower to construct significant tenant improvements as a condition to the commencement of rent under the leases. In addition, Borrower will incur lasting commissions in connection with the leases. To fund the tenant improvements and the leasing commissions, Borrower hereby requests that the Lender fund the Subsequent Advance and funds in the Leasing Reserve.
Pursuant to Exhibit “B, ” enclosed is a Budget showing the Approved Costs. As you can see, the total budgeted costs are $2, 488, 220.00, $2, 274, 035.40 of which will be funded from the Subsequent Advance and the Leasing Reserve, and the balance of which will be funded from Borrower's own funds. Borrower hereby requests that Lender approve the enclosed Budget.

         CIBC responded by way of a November 12, 2013 letter. CIBC reiterated that “the Mortgage contemplates that Subsequent Advances and funds in the Leasing Reserve are only available following the incurrence of the costs and expenses associated with Capital Improvements or Approved Leasing Costs.” CIBC also referenced the need for CIBC to satisfy the conditions precedent in Exhibit B. As CIBC “underst[ood] that, to date, the Borrower had not incurred any costs and expenses associated with Capital Improvements and/or Approved Leasing Costs, ” among other Exhibit B conditions precedent, CIBC stated it would not advance the Subsequent Advance funds at that time. In so deciding, CIBC announced its intention to employ a Construction Consultant[10] and to require the funding of a Deficiency Deposit if necessary:

We further note that the “Project Total Cost” as set forth in your proposed budget exceeds the amount of the Subsequent Advance and the funds in the Leasing Reserve by not less than $214, 184.60 (and far more if CIBC's records regarding the balance of the Leasing Reserve are accurate). To the extent that the budget is approved and expenses are incurred, CIBC shall require that the Borrower deposit an amount equal to the deficiency in a cash collateral account maintained at CIBC, which account shall be first used to pay any Capital Improvements and/or Approved Leasing Costs.
Moreover, prior to extending any Subsequent Advance or releasing funds from the Leasing Reserve, CIBC intends to employ a Construction Consultant. Please confirm that the Borrower will pay the costs and expenses of the Borrower's Construction Consultant in accordance with Sections 11 and 15 of Exhibit B to the Mortgage. Please also confirm that the Borrower will pay all other costs, expenses and fees identified in Section 15 and 16 of Exhibit B to the Mortgage.

         The Juliano Parties responded, in turn, by way of a November 18, 2013 letter, stating that the November 8, 2013 letter “was not intended to request that the Lender immediately disburse the Subsequent Advance . . . without incurring costs” and that the Juliano Parties “intend[ed] to follow Exhibit B.” The Juliano Parties further advised that they had “incurred various costs on account of the Capital Improvements.” They informed CIBC that “[s]ite work costs of approximately $850, 000 attributable to this portion of the project have been spent to date, along with soft costs of over $189, 000 for plans, engineering and commissions for the new leases. The Juliano Parties thus requested “reimbursement of the soft costs.” The Juliano Parties also reiterated their request for approval of the budget, indicated their willingness to fund a Deficiency Deposit if necessary, and further indicated their willingness to “pay CIBC's reasonable costs for a Construction Consultant and all other reasonable costs, expenses and fees identified in Sections 15 and 16 of Exhibit B.”

         From this point forward, CIBC - with the aid of its employed Construction Consultant, Property Solutions, Inc.[11] - began the budget approval process, further detailed later in this Opinion. The review was received by CIBC on January 20, 2014. CIBC approved the Budget on January 21, 2014.

         After the January 20, 2014 budget approval, the Juliano Parties did not again request disbursement of the Subsequent Advance funds. Accordingly, such funds were never advanced.

         G. CIBC Declares Default

         By way of a February 14, 2014 letter, CIBC informed the Juliano Parties CIBC “ha[d] not received copies of William Juliano's personal financial statements and the Borrowers remain out of compliance with various other financial reporting requirements under the loan documents, including without limitation delivery of the annual rent rolls.”

         CIBC sent three Default Notices on March 3, 2014 “intended to serve as written notice” of default. The Willingboro Default Notice stated, in pertinent part:

Please be advised that the Lender has not received (i) ECF Statements with respect to the months ended October 2013, November 2013 and December 2013, (ii) Annual Financial Statements for the year ended 2012, (iii) Guarantor Annual Financial Statements from William T. Juliano for the year ended 2012, (iv) Quarterly Financial Covenant Certifications for the quarters ended March 2013, June 2013 or September 2013, (v) Annual Financial Covenant Certifications for the year ended 2012, (vi) the Operating Budget for 2014, (vii) complete Monthly Reporting packages for January 2014 and throughout 2013. As a result, certain Defaults have occurred under the Loan Agreement and related Loan Documents.

         The Grande Properties Default Notice stated, in pertinent part:

Please be advised that the Lender has not received (i) ECF Statements with respect to the months ended October 2013, November 2013 and December 2013, (ii) Annual Financial Statements for the year ended 2012, (iii) Guarantor Annual Financial Statements from William T. Juliano for the year ended 2012, (iv) Quarterly Financial Covenant Certifications for the quarters ended March 2013, June 2013 or September 2013, (v) Annual Financial Covenant Certifications for the year ended 2012, (vi) the Operating Budget for 2014, (vii) complete Monthly Reporting packages for January 2014 and throughout 2013. As a result, certain Defaults have occurred under the Loan Agreement and related Loan Documents.

         The Grande Village Default Notice stated, in pertinent part:

Please be advised that the Lender has not received (i) ECF Statements with respect to the months ended October 2013, November 2013 and December 2013, (ii) Quarterly Operating Statements with respect to the quarter ended September 2013, (iii) a certified Annual Rent Roll as of January 1, 2013 or (iv) certified financial statements from William T. Juliano for the year ended 2012. As a result, certain Defaults have occurred under the Mortgage and related Loan Documents.

         H. Extending the Maturity Date of the Loans

         On April 9, 2014, the Juliano Parties provided notice that they were extending the maturity date of the loans “from May 10, 2014 to May 10, 2015 which represents the Second Extension Term.”[12]

         CIBC found the April 9, 2014 letters were not sufficient to extend the maturity dates. On April 17, 2014, CIBC sent a letter identifying multiple conditions to the extension of the maturity date and identifying documents from the March 3, 2014 default notices that still had not been provided. By way of a May 7, 2014 letter, CIBC informed the Juliano Parties that “the Maturity Date[s] shall not be extended and remain[] May 10, 2014.”

         I. Loan Sale Agreement

         The July 2011 loan modifications included an accompanying letter agreement (“Loan Sale Agreement”) outlining the parties' respective rights and obligations in the event CIBC were to consider a sale of the loans. The July 21, 2011 letter provided, in pertinent part:

1. If CIBC is considering the sale of any or all of the Loans, . . . CIBC will give written notice to the Borrowers and Guarantor specifying the Loan or Loans that may be sold . . . .
2. If any Borrower or Guarantor wishes to bid to purchase such Loan(s), such bid . . . must be submitted in writing to CIBC within thirty (30) days after CIBC sends the Potential Loan Sale Notice, specifying the price to be paid for the Loan(s) . . . .
. . . .
4. If . . . no Juliano Bid is submitted within the 30-day period after CIBC sends the Potential Loan Sale Notice, . . . then on written notice from CIBC in each such case this letter agreement shall be null and void and of no further force and effect with respect to the Loan(s) that were the subject of the Potential Loan Sale Notice, and CIBC shall be under no further restrictions pursuant to this letter agreement whatsoever with respect to the sale of such Loan(s) . . . .

         CIBC provided a “Potential Loan Sale Notice” on September 15, 2014. It stated, in pertinent part:

CIBC has determined to consider a sale of the Loans, both individually and collectively. This letter constitutes a Potential Loan Sale Notice pursuant to Paragraph 1 of the Letter Agreement. Accordingly, CIBC may engage in any and all activities related to any such sale but, of course, is under no obligation to do so.
If any Borrower or any Guarantor wishes to bid on the Loans, whether individually or collectively (a “Juliano Bid”), such bid(s) must be submitted to CIBC within thirty (30) days after the date hereof and otherwise pursuant to the terms and conditions of the Letter Agreement, including, without limitation, the Juliano Bid Requirements set forth in Paragraph 3 thereof. CIBC is under no obligation to accept a Juliano Bid.

         On October 6, 2014, the Juliano Parties filed an emergency application in the 14-3495 action to enjoin CIBC from selling the loans. This Court denied the Juliano Parties' application. The Juliano Parties did not place a bid. CIBC then sent the Juliano Parties a November 4, 2014 letter, advising that CIBC did not receive a bid from the Juliano Parties within the thirty-day period after the Potential Loan Sale Notice. Thus, CIBC declared the Loan Sale Agreement “null and void and of no further force and effect with respect to the Loans.”

         J. Procedural Posture

         The Juliano Parties' April 28, 2014 Complaint in the 14-3495 action brings four counts against CIBC: breach of contract (Count I), breach of the covenant of good faith and fair dealing (Count II), tortious interference with contract (Count III), and declaratory judgment (Count IV).

         The Juliano Parties predicate their breach of contract claims on the following allegations in their complaint:

90. CIBC materially breached the terms of the Grande Village Mortgage by conditioning its approval to disburse the Subsequent Advance, the funds in the Leasing Reserve and the excess monies held on account of insurance, upon the occurrence of events not required under the Loan Documents, namely, inter alia, a sale of the Grande Village Center.
91. CIBC materially breached the terms of the Grande Village Mortgage by refusing to reimburse Grande Village for the costs Grande Village has incurred in connection with the tenant improvements.
92. CIBC materially breached the terms of Loan Documents by improperly declaring the Borrowers in default on March 3, 2013 and April 17, 2014 based upon nonexistent technical defaults, including William and Thomas Juliano's purported failure to maintain a Net Worth of $15, 000, 000.00.

         The Juliano Parties predicate their tortious interference with contract claim on the allegation that “CIBC intentionally and purposefully interfered with the Leases by . . . unreasonably delaying its approval of the budget and thereby preventing Grande Village from consummating its duties under the Leases, including the timely completion of the tenant improvements, and reaping the benefit of the rewards therefrom.”

         CIBC's October 2, 2014 Second Amended Complaint in the 14-5047 action brings six counts against the Juliano Parties: breach of notes and loan agreements (Count I), breach of payment guarantees (Count II), foreclosure (Count III), security interest foreclosure (Count IV), possession (Count V), and rent receiver (Count VI). The Juliano Parties then filed counterclaims in the 14-5047 action as follows: violation of the New Jersey Consumer Fraud Act (Count I), breach of contract (Count II), and breach of the implied covenant of good faith and fair dealing (Count III). The Juliano Parties predicate their breach of contract counterclaim on an alleged breach of the Loan Sale Agreement by CIBC purportedly “declaring nonexistent, non-monetary technical defaults before noticing the sale of the notes in order to deprive the Juliano Parties of their rights under the Loan Sale Agreement and by declaring the Loan Sale Agreement null and void.” The Juliano Parties predicate their breach of the implied covenant of good faith and fair dealing claim on similar grounds and on the basis of CIBC allegedly “retaliating against the Juliano Parties by filing [the 14-5047] lawsuit” and “by seeking to collect more than $46, 000, 000.00 against the Guarantors who are not liable for such an amount, if any.”

         CIBC filed a July 2, 2014 Motion to Dismiss in the 14-3495 action, which this Court granted in part and denied in part on March 6, 2015. Specifically, this Court found that, “[t]o the extent that plaintiffs allege that defendants breached the loan documents when they declared plaintiffs in technical default, plaintiffs' claim fails, ” as Plaintiffs did “not identif[y] what contract, or contractual provision, defendants allegedly breached.” However, the Court found “plaintiffs have met the elements of their breach of contract claim with regard to defendants' alleged breach of Exhibit B to the Grande Village Mortgage.” Accordingly, the breach of contract claim was permitted to proceed on those grounds. The Court also denied Defendants' motion to dismiss with regard to the Juliano Parties' other claims.

         CIBC also filed a January 9, 2015 Motion to Dismiss the Juliano Parties' counterclaims in the 14-5047 action, which this Court granted in part and denied in part. Specifically, the Court dismissed the Consumer Fraud Act counterclaim, but allowed the breach of contract and breach of the implied covenant of good faith and fair dealing counterclaims to proceed.

         These cases were consolidated by Magistrate Judge Joel Schneider on January 21, 2015 for discovery and case management purposes only. CIBC moved for summary judgment on May 2, 2016. The motion was administratively terminating and the case stayed as the parties pursued mediation. As the parties were unable to resolve their disputes through mediation, the Court administratively reinstated the summary judgment motion on May 18, 2017.

         CIBC is moving for summary judgment in its favor both for the claims asserted against it in the 14-3495 action and the 14-5047 action, as well as for summary judgment on the claims it asserts against the Juliano Parties in the 14-5047 action.[13]

         II. Jurisdiction

         This Court has diversity jurisdiction over both the 14-3495 matter and the 14-5047 matter pursuant to 28 U.S.C. § 1332. Grande Village LLC, Grande Properties, LLC, Willingboro Town Center Urban Renewal North, LLC, and Willingboro Town Center North Manager, LLC are all limited liability companies, whose sole members are William Juliano and Thomas Juliano. Both William Juliano and Thomas Juliano are citizens of New Jersey. Thus, all four entities are citizens of New Jersey, as are William Juliano and Thomas Juliano. CIBC is a corporation incorporated in Delaware with its principal place of business in New York. Canadian Imperial Bank of Commerce is a banking corporation incorporated in Canada with its principal place of business in Canada. Accordingly, there is complete diversity between the parties and the amount in controversy is in excess of $75, 000, exclusive of interests and costs. This Court thus has diversity jurisdiction over these matters pursuant to 28 U.S.C. § 1332.

         III. Summary Judgment Standard

         Summary judgment is appropriate where the Court is satisfied that “'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any, ' . . . demonstrate the absence of a genuine issue of 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, 322-23 (1986) (citing Fed.R.Civ.P. 56).

         An issue is “genuine” if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. “In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence ‘is to be believed and all justifiable inferences are to be drawn in his favor.'” Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (citing Anderson, 477 U.S. at 255).

         Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323 (“[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact.”); see Singletary v. Pa. Dep't of Corr., 266 F.3d 186, 192 n.2 (3d Cir. 2001) (“Although the initial burden is on the summary judgment movant to show the absence of a genuine issue of material fact, ‘the burden on the moving party may be discharged by “showing” - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case' when the nonmoving party bears the ultimate burden of proof.” (citing Celotex, 477 U.S. at 325)).

         Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324. A “party opposing summary judgment ‘may not rest upon the mere allegations or denials of the . . . pleading[s].'” Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001). For “the non-moving party[] to prevail, [that party] must ‘make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial.'” Cooper v. Sniezek, 418 Fed.Appx. 56, 58 (3d Cir. 2011) (citing Celotex, 477 U.S. at 322). Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 257.

         If this case proceeds to trial, the remaining issues will be tried before this Court in a bench trial.[14] “When deciding a motion for summary judgment, it is not our role to evaluate the evidence and decide the truth of the matter, but to determine whether there is a genuine issue for trial.” Rubin v. Amerihealth Adm'rs, Inc., No. 12-3719, 2013 WL 3967569, at *8 (E.D. Pa. Aug. 2, 2013) (citing Anderson, 477 U.S. at 249). “A judge does not sit as a trier of fact when deciding a motion for summary judgment even if the case is scheduled to be heard without a jury.” Id. (quoting Stewart v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, No. 12-3719, 2012 WL 122362, at *4 (D. Md. Jan. 12, 2012)). But see Chao v. Local 54, Hotel Emps. & Rest. Emps. Int'l Union, 166 F.Supp.2d 109, 116 (D.N.J. 2001) (“While questions of ‘reasonableness' involve a primarily factual inquiry, in a non-jury case, where the material evidentiary facts relating to the issue of ‘reasonableness' have been fully developed in the record and are undisputed, the Court may appropriately grant summary judgment if a bench trial would not enhance its ability to draw inferences and conclusions.” (citing Coats & Clark, Inc. v. Gay, 755 F.2d 1506, 1509-10 (11th Cir. 1985); Nunez v. Superior Oil Co., 572 F.2d 1119, 1123-24 (5th Cir. 1978))); Coleman v. Mfrs. Hanover Corp., No. 89-1249, 1990 WL 27370, at *5 n.4 (E.D. Pa. Mar. 14, 1990) (“To the extent that the court must draw inferences from the undisputed evidentiary facts to determine whether there has been prohibited discrimination, the court in a nonjury case is entitled to draw such inferences and conclusions on motions for summary judgment if a bench trial would not enhance its ability to draw those inferences and conclusions.” (citing Coats & Clark, 755 F.2d at 1509-10; Nunez, 572 F.2d at 1123-24; Phillips v. Amoco Oil Co., 614 F.Supp. 694, 723 n.35 (D. Ala. 1985), aff'd, 799 F.2d 1164 (11th Cir. 1986))).

         IV.

         The Court will consider this summary judgment motion in three parts: the 14-3495 claims by the Juliano Parties against CIBC, the 14-5047 claims by CIBC against the Juliano Parties, and the 14-5047 counterclaims by the Juliano Parties against CIBC. As a roadmap for the lengthy discussion ahead, the Court will address the following issues still pending before this Court:

A. The 14-3495 claims by the Juliano Parties ...

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