Branch Banking And Trust Company v. Brown et al, No. 3:2012cv00644 - Document 46 (D. Nev. 2014)

Court Description: ORDER granting Plaintiff's 28 motion for partial summary judgment on the issue of liability. Signed by Judge Howard D. McKibben on 01/13/2014. (Copies have been distributed pursuant to the NEF - KR)
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Branch Banking And Trust Company v. Brown et al Doc. 46 1 2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 5 6 7 8 9 10 11 BRANCH BANKING AND TRUST COMPANY, ) ) ) Plaintiff, ) ) vs. ) ) THOMAS M. BROWN, KATHLEEN R. ) BROWN, et al, ) ) Defendants. _________________________________ ) 3:12-cv-00644-HDM-VPC ORDER The plaintiff, Branch Banking and Trust Company, has filed a 12 complaint against the defendants, Thomas M. and Kathleen R. Brown, 13 for breach of their commercial guaranties of three loans extended 14 to T.M.B. Builders, LLC. 15 court is the plaintiff’s motion for summary judgment (#28). 16 defendants have opposed (#34) and the plaintiff has replied (#39). 17 The plaintiff acquired all rights under the loans in question (See Compl. 8-10). Presently before the The 18 in 2009. 19 and the defendants entered into loan forbearance agreements 20 regarding two of the loans on February 14, 2011. 21 Pursuant to the loan forbearance agreements, the outstanding 22 balance of principal and accrued interest on those two loans was 23 due on or before December 1, 2011. 24 pay the outstanding balance of principal and accrued interest by 25 that date. 26 maturity date of the third loan to February 24, 2010. 27 T.M.B. Builders failed to pay the outstanding balance of principal 28 and accrued interest by February 24, 2010. (See P. Mot. Summ. J. 3.) (Id. 4, 6) The plaintiff, T.M.B Builders, (Id.) (Id. 3-6.) T.M.B Builders failed to A “Change in Terms Agreement” extended the (Id.) (Id. 7.) Having failed to 1 1 cure the default payments on the three loans in question, T.M.B. 2 Builders filed a petition for relief under the United States 3 Bankruptcy Code on September 5, 2012. 4 plaintiff then filed its complaint (#1) against the defendants for 5 breach of commercial guarantees and breach of the covenant of good 6 faith and fair dealing on December 7, 2012. 7 The plaintiff filed its motion for summary judgment (#28) on August 8 14, 2013. 9 Standard 10 (Id. 4, 6, 7.) The (See Compl. 8-11.) Summary judgment shall be granted “if the movant shows that 11 there is no genuine issue as to any material fact and the movant is 12 entitled to judgment as a matter of law.” 13 The burden of demonstrating the absence of a genuine issue of 14 material fact lies with the moving party, and for this purpose, the 15 material lodged by the moving party must be viewed in the light 16 most favorable to the nonmoving party. 17 Co., 398 U.S. 144, 157 (1970); Martinez v. City of Los Angeles, 141 18 F.3d 1373, 1378 (9th Cir. 1998). 19 that affects the outcome of the litigation and requires a trial to 20 resolve the differing versions of the truth. 21 Workers Int’l Ass’n, 804 F.2d 1472, 1483 (9th Cir. 1986); S.E.C. v. 22 Seaboard Corp., 677 F.2d 1301, 1306 (9th Cir. 1982). Fed. R. Civ. P. 56(a). Adickes v. S.H. Kress & A material issue of fact is one Lynn v. Sheet Metal 23 Once the moving party presents evidence that would call for 24 judgment as a matter of law at trial if left uncontroverted, the 25 respondent must show by specific facts the existence of a genuine 26 issue for trial. 27 250 (1986). 28 sufficient evidence favoring the nonmoving party for a jury to Anderson v. Liberty Lobby, Inc., 477 U.S. 242, “[T]here is no issue for trial unless there is 2 1 return a verdict for that party. 2 colorable, or is not significantly probative, summary judgment may 3 be granted.” 4 of evidence will not do, for a jury is permitted to draw only those 5 inferences of which the evidence is reasonably susceptible; it may 6 not resort to speculation.” 7 585 F.2d 946, 952 (9th Cir. 1978); see also Daubert v. Merrell Dow 8 Pharmaceuticals, Inc., 509 U.S. 579, 596 (1993) (“[I]n the event 9 the trial court concludes that the scintilla of evidence presented If the evidence is merely Id. at 249-50 (citations omitted). “A mere scintilla British Airways Board v. Boeing Co., 10 supporting a position is insufficient to allow a reasonable juror 11 to conclude that the position more likely than not is true, the 12 court remains free . . . to grant summary judgment.”). Moreover, 13 “[i]f the factual context makes the non-moving party’s claim of a 14 disputed fact implausible, then that party must come forward with 15 more persuasive evidence than otherwise would be necessary to show 16 there is a genuine issue for trial.” 17 Stanewich, 142 F.3d 1145, 1149 (9th Cir. 1998) (citing Cal. 18 Architectural Bldg. Products, Inc. v. Franciscan Ceramics, Inc., 19 818 F.2d 1466, 1468 (9th Cir. 1987)). 20 are unsupported by factual data cannot defeat a motion for summary 21 judgment. 22 Blue Ridge Insurance Co. v. Conclusory allegations that Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Finally, if the nonmoving party fails to present an adequate 23 opposition to a summary judgment motion, the court need not search 24 the entire record for evidence that demonstrates the existence of a 25 genuine issue of fact. 26 Dist., 237 F.3d 1026, 1029-31 (9th Cir. 2001) (holding that “the 27 district court may determine whether there is a genuine issue of 28 fact, on summary judgment, based on the papers submitted on the See Carmen v. San Francisco Unified Sch. 3 1 motion and such other papers as may be on file and specifically 2 referred to and facts therein set forth in the motion papers”). 3 The district court need not “scour the record in search of a 4 genuine issue of triable fact,” but rather must “rely on the 5 nonmoving party to identify with reasonable particularity the 6 evidence that precludes summary judgment.” Keenan v. Allan, 91 F.3d 7 1275, 1279 (9th Cir. 1996) (quoting Richards v. Combined Ins. Co., 8 55 F.3d 247, 251 (7th Cir.1995)). 9 to respond is really an opportunity to assist the court in “[The nonmoving party’s] burden 10 understanding the facts. 11 discharge that burden–for example by remaining silent–its 12 opportunity is waived and its case wagered.” 13 Township Trustees, 980 F.2d 399, 405 (6th Cir. 1992). 14 Analysis 15 But if the nonmoving party fails to Guarino v. Brookfield The court construes the plaintiff’s motion for summary 16 judgment as a motion for partial summary judgment solely as to the 17 issue of liability. 18 (See P. Reply 1-2.) The plaintiff has provided uncontradicted evidence that the 19 defendants are indeed the guarantors of the three loans in question 20 and that the plaintiff possesses all rights to these loans. 21 is reflected in the exhibits, copies of the relevant promissary 22 notes, construction deeds of trust, commercial guarantees signed by 23 the defendants, “Change in Terms Agreements,” lone forbearance 24 agreements, and documentation assigning all rights to the 25 plaintiff. 26 documentation that T.M.B. Builders has defaulted on the relevant 27 loans and has filed for bankruptcy. 28 (See Compl. Ex. 1-14.) The defendants have provided (See D. Opp’n Ex. 1.) In their opposition (#34) to the plaintiff’s motion for 4 This 1 summary judgment, the defendants dispute the amount of damages they 2 may ultimately owe the plaintiff, but have not contested that they 3 are in fact liable as the guarantors of the loans and have breached 4 their guaranties. 5 arguments raised by the defendants create a genuine issue of 6 material fact on the issue of liability. 7 (See generally Def. Opp’n.) None of the The defendants first argue in their opposition that a Nevada 8 statute, NRS 40.495(4), prevents summary judgment because “until an 9 evidentiary hearing is held pursuant to NRS 40.495(4), the amount 10 of the guarantors’ liability, if any, cannot be determined and 11 judgment cannot be entered.” 12 The plaintiffs have filed a motion (#43) requesting leave to 13 address the issue of whether or not NRS 40.495(4) applies to the 14 action at hand. 15 does not bar summary judgment on the issue of liability. 16 certain circumstances, NRS 40.495(4) requires an evidentiary 17 hearing to determine the fair market value of the property at 18 issue, and then limits the creditor’s recovery from the guarantor 19 based on the value of the property. 20 liability itself and does not prevent the court from ruling as to 21 whether or not a guaranty has been breached; if the statute 22 applies, it only affects the amount owed under the guaranties. 23 Wells Fargo Bank, N.A. v. Elefante, No. 2:12-cv-01521-RCJ-CWH, 2013 24 WL 1819801, at *3 (D. Nev. Apr. 26, 2013). (Def. Opp’n 1; see also id. 3-4.) However, whether or not the statute applies, it Under The statute does not address 25 The defendants next argue that summary judgment cannot be 26 granted because the plaintiffs have not properly substantiated 27 their damages. 28 not at issue at this time, as plaintiffs have filed for summary See (D. Opp’n 2, 4-5.) 5 Again, the amount of damages is 1 judgment solely as to whether the defendants are liable, not as to 2 the amount owed. 3 Finally, the defendants argue that the amount of their 4 indebtedness is subject to modification by the bankruptcy 5 proceedings related to T.M.B. Builder’s petition for bankruptcy. 6 (D. Opp’n 2, 5-6.) 7 States Bankruptcy Code explicitly states that “except as provided 8 in subsection (a)(3) of this section,” which is not relevant to the 9 facts at hand, “discharge of a debt of the debtor does not affect This argument is without merit, as the United 10 the liability of any other entity on, or the property of any other 11 entity for, such debt.” 12 noted that “[i]t is . . . well-established that the discharge of 13 the principal debtor in bankruptcy will not discharge the 14 liabilities of codebtors or guarantors.” 15 W. Bank One, 147 F.3d 1145, 1147 n.2 (9th Cir. 1998) (citing 16 Underhill v. Royal, 769 F.2d 1426, 1432 (9th Cir. 1985))). 17 However, even if the amount of the defendants’ debt as guarantors 18 could be reduced or modified by T.M.B. Builder’s bankruptcy 19 proceedings, the defendants’ argument still would not preclude 20 summary judgment as to the issue of liability alone. 21 11 U.S.C. § 524(e). The Ninth Circuit has Star Phoenix Min. Co. V. In the case at hand, the plaintiff has presented uncontested 22 evidence that it possess all rights to the loans in question, that 23 the defendants are the guarantors of these loans, and that the 24 borrower T.M.B. Builders has defaulted on these loans. 25 the plaintiff has presented evidence as to liability that would 26 call for judgment as a matter of law at trial if left 27 uncontroverted, the burden shifts to the defendants to show by 28 specific facts the existence of a genuine issue for trial. 6 Given that 1 2 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). However, the defendants have presented no evidence whatsoever 3 to contradict the plaintiff’s claim that the defendants have 4 breached their guaranties and are now liable to the plaintiff as a 5 result. 6 evidence as required “‘in the light most favorable to the party 7 opposing the motion,’” the defendants have failed to show that 8 there is a genuine issue of material fact as to their liability 9 under the guarantees. The court therefore finds that, even when viewing the Matsushita Elec. Indus Co. v. Zenith Radio 10 Corp., 475 U.S. 574, 587 (quoting United States v. Diebold, 369 11 U.S. 654, 655 (1962)). 12 13 Accordingly, the plaintiff’s motion for partial summary judgment on the issue of liability (#28) is GRANTED. 14 IT IS SO ORDERED. 15 DATED: This 13th day of January, 2014. 16 17 ____________________________ UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28 7