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LLC v. Sheppard

United States District Court, D. Maryland

April 23, 2015

LBCMT 2007-C3 URBANA PIKE, LLC, et al., Plaintiffs,
v.
ERIC D. SHEPPARD et al., Defendants

MEMORANDUM

JAMES K. BREDAR, District Judge.

Pending before the Court are Plaintiffs' motion for summary judgment (ECF No. 71) and Defendant Eric D. Sheppard's cross-motion for summary judgment (ECF No. 75). Also pending is Plaintiffs' motion to strike Sheppard's untimely reply on his cross-motion. (ECF No. 78.) Plaintiffs' motion for summary judgment is directed at both Sheppard and his codefendant Philip Wolman. At one time, both Sheppard and Wolman were represented by the same counsel, but counsel withdrew from representation of Wolman while continuing representation of Sheppard. (ECF Nos. 55, 56, 59.) Thus, the cross-motion has only been filed by Sheppard. Wolman has filed nothing in the case since his counsel withdrew.

The motions have been briefed (ECF Nos. 76, 77, 79, 80), and no hearing is required, Local Rule 105.6 (D. Md. 2014). The motion to strike will be granted based upon the lack of a request by Sheppard for late filing of his reply and based upon the absence of good cause.[1] Plaintiffs' motion for summary judgment will be granted as to both Defendants on Count I, limited to the claim for the deficiency balance and related charges on the Riverview Loan, and Plaintiffs' motion for summary judgment will be denied as to both Defendants on Count II. Plaintiffs have presented no argument as to Count III and have apparently abandoned that claim, which will be dismissed. Sheppard's cross-motion will be denied as to Count I and granted as to Count II, and the Court will enter judgment on Count II in favor of both Defendants.

I. Background

The Court has previously recounted the facts leading up to Plaintiffs' complaint in a memorandum opinion in which several plaintiffs were dismissed and the scope of the case was narrowed to include only two loans, called the Riverview Loan and the Gold Mile Loan. (ECF No. 38.) Briefly, the remaining Plaintiffs and the Defendants engaged in a set of transactions regarding two commercial properties in Frederick County, Maryland. For each property, a special-purpose entity ("SPE") was created by Defendants to own the property and another SPE was created by Defendants to borrow money to purchase the property. Similarly, each Plaintiff was created to serve as lender on the corresponding property. The two loans at issue here went into default, and Plaintiffs and Defendants have been engaged in this litigation as a result. Counts I and II are both claims for breach of contract.

II. Standard for Summary Judgment

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the "mere existence of a scintilla of evidence in support of the [opposing party's] position" is insufficient to defeat a motion for summary judgment. Id. at 252. The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008), who may not rest upon the mere allegations or denials of his pleading but instead must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute for trial, Fed.R.Civ.P. 56(c)(1). Supporting and opposing affidavits are to be made on personal knowledge, contain such facts as would be admissible in evidence, and show affirmatively the competence of the affiant to testify to the matters stated in the affidavit. Fed.R.Civ.P. 56(c)(4). Each cross-motion for summary judgment is viewed separately on its own merits. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003). "When considering each individual motion, the court must take care to resolve all factual disputes and any competing, rational inferences in the light most favorable' to the party opposing that motion." Id. (citation omitted).

III. Analysis

For each loan, Sheppard and Wolman executed an Individual Recourse Guaranty ("IRG"). The operative wording is identical for both the Riverview IRG and the Gold Mile IRG. Plaintiffs seek to hold Sheppard and Wolman liable for the two loans pursuant to these IRGs. But they focus on different language within the IRGs as between the two claims.

A. Count I - Breach of Riverview Individual Recourse Guaranty

In Count I pertaining to the Riverview Loan, Plaintiffs rely upon the following language:

... [Defendants] (hereinafter collectively referred to as "Guarantor") jointly and severally hereby absolutely and unconditionally guarantee to Lender the prompt and unconditional payment of the Guaranteed Recourse Obligations of Borrower
... ...

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