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The Bancorp Bank v. Condor Developers, LLC

United States District Court, D. New Jersey

May 2, 2019

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, ROSENZWEIG and HALTZMAN, LLC ST. DAVIDS, PA 19087 On behalf of Plaintiff

          ANTHONY MORGANO LEVINE STALLER SKLAR CHAN & BROWN PA ATLANTIC CITY, N.J. 08401 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 Defendant Daniel Brown on a personal guaranty he signed in connection with the financing for the property. For the reasons expressed below, Plaintiff's motion will be granted as to liability against Brown, with additional instructions by the Court regarding the entry of judgment against him and the other defendants.

         BACKGROUND

         On August 17, 2017, the Court granted Plaintiff's motion for summary judgment on its claims against Defendants Condor and NJG. The Court reserved decision on Plaintiff's motion for summary judgment on its claims against Brown arising from a personal guaranty signed by Brown, and the Court ordered supplemental briefing. (Docket No. 92, 93.) Plaintiff and Brown timely complied with the Court's order (Docket No. 94, 95), but numerous subsequent events, including an imminent sale of the subject property, compelled the Court to refrain from addressing Plaintiff's claims against Brown, as well as refrain from entering final judgment against Condor and NJG.

         On May 1, 2019, the Court held oral argument on Plaintiff's claims against Brown. It now appears the sale of the property has fallen through and it remains under the control of the court-appointed receiver. Plaintiff's claims against Brown under the personal guaranty remain pending and ripe for resolution. The Court now issues the following Opinion, restating the background from the prior Opinion, to support the ultimate determination that Brown is liable under the personal guaranty he entered into with Plaintiff. As discussed further, however, final judgment as to damages shall not be entered against Brown at this point, with the Court directing the parties to undertake certain steps to facilitate an equitable process for effecting such a judgment.

         By way of 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.[3]In February 2016, the Court held a hearing on Plaintiff's motion to appoint a receiver and granted that motion. The receiver has been managing the property ever since.

         Plaintiff 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 did 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 guaranty. Brown admits that he signed a guaranty 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 despite what the executed guarantees explicitly state 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 the personal guaranty is insufficient to maintain his counterclaims. Brown argues that the personal guaranty was not the final expression of their agreement since it does not contain an integration clause, and maintains that his affidavit regarding Schreiber's misrepresentations remains unrebutted by Plaintiff, and therefore establishes a genuine issue of material fact which precludes summary judgment.

         DISCUSSION

         A. Standard for Summary Judgment

         Summary judgment is appropriate where the Court is satisfied that the materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, or interrogatory answers, demonstrate that there is no genuine issue as to any 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, 330 (1986); Fed.R.Civ.P. 56(a).

         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. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)(quoting Anderson, 477 U.S. at 255).

         Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 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. Id. 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 256-57. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).

         B. ...


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