Resolution Trust Corp. v. North Bridge Associates, Inc.

• Decision Date: 11 February 1994
• Docket Number: Nos. 93-1932,93-2001,s. 93-1932
• Citation: 22 F.3d 1198
• Parties: RESOLUTION TRUST CORPORATION, Plaintiff, Appellee, v. NORTH BRIDGE ASSOCIATES, INC., et al., Defendants, Appellants. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1198

22 F.3d 1198

28 Fed.R.Serv.3d 1490

RESOLUTION TRUST CORPORATION, Plaintiff, Appellee, v. NORTH BRIDGE ASSOCIATES, INC., et al., Defendants, Appellants.

Nos. 93-1932, 93-2001.

United States Court of Appeals First Circuit.

Heard Feb. 11, 1994.

Decided May 2, 1994.

Peter S. Brooks, with whom Brooks & Lupan, Sherborn, MA, was on brief, for appellants.

Joseph F. Shea, Boston, MA, with whom Michael P. Condon, Sheila Kraft Budoff, Washington, DC, Paul R. Gupta and Nutter, McClennen & Fish, Boston, MA, were on brief, for appellee.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and STAHL, Circuit Judge.

SELYA, Circuit Judge.

In one corner, the plaintiff, a government agency, having won by a knockout in the court below, asserts that this is a case about defendants who demand their own timetable for pretrial discovery and motion practice. In the other corner, a group of defendants, having been laid low by what they claim was a rabbit punch, assert that this is a case about the government flouting court-imposed deadlines and procedural rules. After reconstructing the chronology of events, we conclude that the defendants are substantially correct. We also conclude that the district court, instead of hurrying to grant summary judgment, should have held the government accountable for the lack of punctual discovery and given the government's litigation adversaries a fair opportunity to formulate their opposition.

I. THE VIEW FROM RINGSIDE

At the height of a boom market in real estate, two neophytes, Ralph H. Scott, II, a physician, and his wife, Betty, decided to build a large, expensive residential subdivision on the picturesque island of Martha's Vineyard. In order to proceed, Dr. and Mrs. Scott formed a corporation, North Bridge Associates, Inc. The Scotts and North Bridge Associates (collectively, "borrowers" or "appellants") then executed a note in favor of ComFed Savings Bank ("ComFed" or "the bank") in the amount of $2,995,000. The borrowers closed the loan on November 25, 1987, securing it by a mortgage on the North Bridge subdivision. They also executed a construction loan agreement that specified when and how the bank would disburse the borrowed funds.

The venture experienced several setbacks. A particularly vexing problem involved abutting property owners who eventually served a lis pendens asserting that title defects invalidated easements essential to the subdivision's viability. At this delicate juncture, the bank shut off the flow of funds and construction ground to a halt. When the promissory note matured on November 25, 1988, the borrowers failed to repay the outstanding balance. In a last-ditch effort to avert foreclosure, they capitulated to ComFed's demands. As part of the tribute that ComFed exacted for deferring the repayment obligation, the borrowers signed an extension agreement and general release surrendering all potential defenses and counterclaims. ¹

The loan remained unpaid at the end of the extension period. The bank then sued the borrowers in a Massachusetts state court. The borrowers answered and counterclaimed alleging, inter alia, that ComFed had broken its promises, violated an implied covenant of good faith and fair dealing, disregarded fiduciary responsibilities, and engaged in fraudulent misrepresentation. They also asked the court to set aside the extension agreement and general release on grounds of duress.

Inasmuch as procedural tussles have dominated the course of this litigation, we deem it prudent to set forth a detailed chronology of relevant events occurring from and after the time that the parties joined issue. In doing so, we eliminate many matters unimportant to our resolution of the issues on appeal. ²

1. December 20, 1990. The borrowers serve interrogatories and a request for document production. In compliance with applicable procedural rules, see Fed.R.Civ.P. 34(b), the request sets a reasonable time and place for production, specifying that the documents shall be produced within 30 days at the offices of the borrowers' lawyers.

2. January 23, 1991. Following ComFed's failure, the Resolution Trust Corporation ("RTC"), having been appointed as conservator (and soon to be appointed receiver), is substituted as the party plaintiff and, on April 1, 1991, removes the action to the federal district court.

3. April 16, 1991. Over three months after the date on which the plaintiff's discovery responses were due, RTC takes a first, tentative step toward responding: it offers to produce the described documents, but attempts unilaterally to amend the time and place for production. No documents are received and nothing is said with respect to the answers to interrogatories although, under the Federal Rules, the answers were due within 30 days of service, see Fed.R.Civ.P. 33(b)(3).

4. May 26, 1992. After thirteen more months without incident or action of any kind, the district judge holds a status conference. RTC agrees to provide all outstanding discovery "promptly."

5. February 22, 1993. RTC fritters away another nine months. Eventually, the judge convenes a second status conference. This time, RTC comes armed with a motion for partial summary judgment ("the SJM"). ³ The judge orders all outstanding discovery obligations honored by March 24, at the latest.

6. March 2, 1993. As no progress has been made toward completion of discovery, the borrowers file the first of three motions for enlargement of the time within which to oppose the SJM. The borrowers' motion is accompanied by an attorney's affidavit detailing the history of the action and noting that, more than two years after they should have been delivered, discovery materials are still in the pipeline.

7. March 18, 1993. RTC notifies the borrowers that it has gathered some responsive documents, and suggests that the parties agree upon a mutually convenient time to review them.

8. March 25, 1993. Over RTC's objection, the district court grants the borrowers' motion and extends the time for opposing the SJM to April 16, 1993.

9. April 2, 1993. The interrogatories are finally answered and, on the same date, the borrowers' attorneys review the documents that RTC has made available at its counsel's offices.

10. April 9, 1993. Some of the documents originally requested on December 2, 1990, amounting to over 2,000 pages, are at long last delivered to the offices of the borrowers' lawyers, Peter and Cathy Brooks (who are husband and wife). On the same day, however, the Brooks' infant son is hospitalized and placed in an intensive care unit. He remains there, initially, for nine days, and is readmitted on April 20. Upon discharge three days later, he continues to require special attention.

11. April 12, 1993. The borrowers file a motion in which they request a further enlargement of time until May 14, 1993. This motion is not accompanied by an affidavit, but, in an accompanying memorandum, Peter Brooks (who authored the affidavit in support of the first extension motion) describes the medical emergency and informs the court that the borrowers cannot intelligently address the SJM until they have time to review the compendious discovery materials produced only a few days earlier.

12. May 20, 1993. The borrowers conclude their document review and find the documents produced to be incomplete and inadequate. They write to RTC's counsel specifying seventeen missing categories of documents and soliciting a conference to reduce areas of potential controversy. ⁴ The ensuing discussion between the parties engenders no results.

13. May 24, 1993. The borrowers file their third motion for an extension, accompanied by an affidavit from Cathy Brooks rehearsing the latest developments, stating her belief that the documents withheld exist, and opining that those papers, if produced, will illuminate genuine disputes concerning material facts.

14. June 15, 1993. The borrowers move to compel production of the undisclosed documents.

15. July 20, 1993. Without giving notice or holding a hearing, the district judge grants the SJM, rejects the borrowers' second and third extension motions, and denies the motion to compel. The court offers no meaningful explanation for any of its rulings. In due course, the court invokes Fed.R.Civ.P. 54(b) and enters judgment.

The borrowers appeal. ⁵ They assert that the lower court erred: in denying their second and third extension motions; in taking up the SJM while discovery remained incomplete, and without prior notice or a hearing; and in granting the SJM despite the presence of genuine issues of material fact.

II. THE RULE 56(f) PARADIGM

When a party claims an inability to respond to an opponent's summary judgment motion because of incomplete discovery or the like, Fed.R.Civ.P. 56(f) looms large. ⁶ Our first task, therefore, is to erect the framework under which Rule 56(f) motions must be analyzed. We then proceed to a more particularized discussion of the borrowers' motions and the rulings with respect thereto. In performing this analysis, we remain mindful that a district court's denial of a Rule 56(f) motion is reviewed only for abuse of discretion. See Licari v. Ferruzzi, 22 F.3d 344, 350 (1st Cir.1994); Nestor Colon Medina & Sucesores, Inc. v. Custodio, 964 F.2d 32, 38 (1st Cir.1992).

A. The Applicable Framework.

Fed.R.Civ.P. 56(f) describes a method of buying time for a party who, when confronted by a summary judgment motion, can demonstrate an authentic need for, and an entitlement to, an additional interval in which to marshal facts essential to mount an opposition. See Paterson-Leitch Co. v. Massachusetts Mun. Wholesale Elec. Co., 840 F.2d 985, 988 (1st Cir.1988). The rule is intended to safeguard against judges swinging the summary judgment axe too hastily. See Price v. General Motors Corp., 931 F.2d 162, 164 (1st Cir.1991).

Consistent with the salutary purposes underlying Rule 56(f), district courts should construe motions that invoke the rule generously, holding parti...