United States District Court, D. Maryland
CATHERINE C. BLAKE UNITED STATES DISTRICT JUDGE
Capital Funding, LLC (Capital Funding) filed this action
against defendants Avi "Zisha" Lipschutz and Larry
Lipschutz alleging breach of a loan guaranty. On
October 10, 2019, Capital Funding dismissed with prejudice
the action against Z. Lipschutz. (ECF 53 and 54). Now pending
before the court are Capital Funding's motion to compel
and for sanctions (ECF 25), Capital Funding's motion for
summary judgment (ECF 34), and Larry Lipschutz's motion
for leave to file an amended answer (ECF 45).
AND PROCEDURAL HISTORY
March 4, 2014, Capital Funding loaned $36, 856, 627 to four
Delaware limited liability companies (the
"borrowers"). (Loan Agreement, Sec. 2.1, ECF 34-3).
To guarantee the loan, Capital Funding entered into a
guaranty of payment and performance, also dated March 4,
2014, with guarantors Z. and L. Lipschutz and Dov Newmark.
(Guaranty of Payment and Performance, Sec. 1.1, ECF 34-7).
Under the terms of the guaranty, each guarantor:
irrevocably and unconditionally guarantees to Lenders and
Agent... the payment of the Debt and the performance of the
other Loan Obligations as and when the same shall be due and
payable . . . Guarantor hereby irrevocably and
unconditionally covenants and agrees that it is liable for
the Loan Obligations as a primary obligor . .. Guarantor has
agreed to act as a surety to Lender.
the borrowers defaulted, Capital Funding, the borrowers, and
the guarantors entered into a forbearance agreement, which
extended the loan repayment date until June 30, 2016. (First
Forbearance Agreement, Sec. 4.4, ECF 46-2). The borrowers
failed to repay the loan by the new repayment date, and
Capital Funding filed suit against the guarantors on July 5,
2016. (Civil No. ELH-16-2485, ECF 1, Complaint). The parties
were able, however, to resolve the dispute and on December
30, 2016, entered into a second forbearance agreement,
wherein the parties agreed to reduce Z. and L.
Lipschutz's guarantor liability to $6, 250, 000 each, and
release Newmark from his obligations. (Second Forbearance
Agreement, Sec. 5.2, ECF 34-6). The second forbearance
agreement stated that:
Section 1.1(b) of the Guaranty Agreement shall be deleted and
replaced with: 'Notwithstanding anything contained herein
to the contrary, (i) the guaranty by Larry under paragraph
(a) of this Section, and any payments required to be made by
Larry under Section 1.4, shall be limited to and shall not
exceed $6, 250, 000 in the aggregate, and (ii) the guaranty
by Zisha under paragraph (a) of this Section, and any
payments required to be made by Zisha under Section 1.4,
shall be limited to and shall not exceed $6, 250, 000 in the
(Id. Sec. 5.2.1). The second forbearance agreement
also extended the loan repayment date to December 30, 2017.
(Id. Sec. 1.1.3; Affidavit of Glen Dwyer, Managing
Director of Capital Funding ¶ 5, ECF 34-2). In light of
the second forbearance agreement, on January 5, 2017, Capital
Funding dismissed its pending action against Z. and L.
Lipschutz and Newmark with prejudice. (Civil No. ELH-16-2485,
ECF 13, Notice of Dismissal with Prejudice).
Lipschutz contends that he never agreed to the guaranty, the
first forbearance agreement, or the second forbearance
agreement. In his affirmation attached to his opposition to
Capital Funding's motion for summary judgment, he states
that he signed only the signature pages, and was not provided
copies of the underlying documents. (Affirmation of Larry
Lipschutz in Opp'n to PL's Mot. for Summary Judgment
¶ 7, ECF 44-1). He states he "was never sent, did
not negotiate, and did not see any forbearance
agreement" and "all [he] was sent were signature
pages for [him] to sign and have [his] signature
notarized." (Id. ¶¶ 9, 10). L.
Lipschutz also states that he "never authorized anyone
to attach [his] signature pages to the Guaranty or the
Forbearance Agreement" and "it was [his]
understanding that the documents to which [his] signature
pages would be attached were meant for [him] to secure
repayment of the loan with [his] investments in the various
Massachusetts nursing homes involved in this
litigation." (Id. ¶¶ 11, 12).
borrowers defaulted and failed to repay the loan by December
30, 2017. (Affidavit of Glen Dwyer ¶ 5). Capital Funding
then filed the complaint in this case on January 23, 2018,
alleging that Z. and L. Lipschutz breached their guaranty
to amend should be freely granted under Fed.R.Civ.P. 15(a),
and amendments are generally accepted absent futility, undue
prejudice, or bad faith. See Foman v. Davis, 371
U.S. 178, 182 (1962);Matrix Capital Mgmt. Fund, LP v.
BearingPoint, Inc., 516 F.3d 172, 193 (4th Cir. 2009).
When a party wishes to amend after the deadline set in the
scheduling order, the party must, under Fed.R.Civ.P. 16, show
good cause to modify the scheduling order deadlines before
also satisfying the Rule 15(a) standard for amendment.
Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298
(4th Cir. 2008); Prowess, Inc. v. RaySearch Laboratories,
AB, 953 F.Supp.2d 638, 647-48 (D. Md. 2013).
for Summary Judgment:
Rule of Civil Procedure 56(a) provides that summary judgment
should be granted "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) (emphases added). "A dispute is
genuine if 'a reasonable jury could return a verdict for
the nonmoving party.'" Libertarian Party
of Va. v. Judd, 718F.3d308, 313 (4th Cir. 2013)
(quoting Dulaney v. Packaging Corp. of Am., 673 F.3d
323, 330 (4th Cir. 2012)). "A fact is material if it
'might affect the outcome of the suit under the governing
law.'" Id. (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). Accordingly,
"the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment[.]"
Anderson, 411 U.S. at 2A1-48. The court
must view the evidence in the light most favorable to the
nonmoving party, Tolan v. Cotton, 134 S.Ct. 1861,
1866 (2014) (per curiam) (citation and quotation omitted),
and draw all reasonable inferences in that party's favor,
Scott v. Harris, 550 U.S. 372, 378 (2007) (citations
omitted); see also Jacobs v. N.C. Admin. Office of the
Courts, 780 F.3d 562, 568-69 (4th Cir. 2015). At the
same time, the court must "prevent factually unsupported
claims and defenses from proceeding to trial."
Bouchat v. Bait. Ravens Football Club, Inc., 346
F.3d 514, 526 (4th Cir. 2003) (quoting Drewitt v.
Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993)).