8699 Biscayne, LLC v. Indigo Real Estate, LLC (In re 8699 Biscayne, LLC)
| Decision Date | 06 September 2011 |
| Docket Number | Bankruptcy No. 08–22814–BKC–AJC.,Adversary No. 08–1749–BKC–AJC–A. |
| Citation | 465 B.R. 901 |
| Parties | In re 8699 BISCAYNE, LLC, Debtor.8699 Biscayne, LLC, Debtor in Possession, Plaintiff, v. Indigo Real Estate, LLC, as assignee of WESTLB AG, & WESTLB AG, a Foreign Corporation Builderfinancial, Corp., a Florida corporation Builder Funding, LLC, a Delaware limited liability company, BFSPE, LLC, a Delaware limited liability company, BFWEST, LLC, a Delaware limited liability company, Defendants. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
OPINION TEXT STARTS HERE
James W. Carpenter, Angelo & Banta, P.A., Fort Lauderdale, FL, for Defendants.
MEMORANDUM ORDER GRANTING DEFENDANTS', BFWEST, LLC, BFSPE, LLC, BUILDER FUNDING, LLC AND BUILDERFINANCIAL CORP.'S MOTION FOR SUMMARY FINAL JUDGMENT ON USURY ISSUES AND DENYING PLAINTIFF, 8699 BISCAYNE, LLC'S CROSS–MOTION FOR PARTIAL SUMMARY JUDGMENT AND SUPPLEMENTAL MOTION FOR FINAL SUMMARY JUDGMENT ON COUNT III USURY
THIS CAUSE came before the Court for hearing on June 20, 2011 upon Defendants', BFWEST, LLC, BFSPE, LLC, BUILDER FUNDING, LLC, and BUILDERFINANCIAL CORP.'s (collectively, the “Defendants”) Motion for Summary Final Judgment on Usury Issues (“Defendants' Motion”) [D.E. 289]. Additionally, Plaintiff, 8699 BISCAYNE, LLC (“Plaintiff” or “8699 BISCAYNE”) previously filed its Cross–Motion for Partial Summary Judgment (Plaintiff's “Cross–Motion”) [D.E. 72] and Supplemental Motion for Final Summary Judgment on Count III Usury (Plaintiff's “Supplemental Motion”) [D.E. 291] for which the Court accepted argument during the June 20, 2011 hearing. The Court, after having reviewed Defendants' Motion as well as Plaintiff's Cross–Motion and Supplemental Motion, the record and file in this case, and otherwise being fully familiar in the circumstances makes the following finding and conclusions, and enters the following relief set forth herein as to Defendants' Motion, Plaintiff's Cross–Motion and Supplemental Motion for the reasons set forth herein.
1. Following the filing of an Amended Complaint dated February 11, 2009 seeking declaratory relief in conjunction with allegations of usury relating to a certain promissory note, mortgage and other loan documents as executed between Plaintiff and Defendants, on April 2, 2009, Plaintiff filed its Response to Defendants, WESTLB AG and INDIGO REAL ESTATE, LLC's (collectively, “WESTLB Defendants”) Motion to Dismiss Debtor's Amended Complaint and Cross–Motion for Partial Summary Judgment [D.E. 72].
2. On August 31, 2009, Plaintiff submitted and this Court subsequently granted its motion seeking leave to file a Second Amended Complaint alleging causes of action for usury relating to that certain promissory note, mortgage and other loan documents attached to its Amended Complaint (“Motion to File Second Amended Complaint”) [D.E. 132, 140].
3. Upon this Court's approval of the settlement between the Plaintiff and INDIGO REAL ESTATE, LLC, as assignee of WESTLB AG and WESTLB AG [D.E. 250], Plaintiff's alleged usury claims against the Defendants which were set forth under Count III of the Second Amended Complaint became the sole remaining issues in this adversary action.
4. On April 29, 2011, Defendants filed their Motion for Summary Final Judgment on Usury Issues and Supporting Memorandum of Law moving the Court pursuant to Federal Rule of Civil Procedure 56 for an order granting summary judgment in favor of the Defendants on the grounds that there is no genuine issue as to any material fact that the loan referenced under Plaintiff's Second Amended Complaint violated criminal usury laws [D.E. 289].
5. Plaintiff subsequently filed its Supplemental Motion for Summary Final Judgment on Count III Usury and Response in Opposition to Defendants' Motion For Summary Final Judgment on Usury Issues and Memorandum of Law [D.E. 290 and 291]. On June 20, 2011, Defendants filed their Response to Plaintiff's Supplemental Motion for Final Summary Judgment on Count III Usury [D.E. 306]. The Court heard oral argument on the above-referenced motions on June 20, 2011.
6. On or about January 12, 2006, Jason Vance, Tamara Vance, and Michael Scaglione, on behalf of themselves and an entity to later be formed (which became 8699 BISCAYNE), originally requested from BUILDERFINANCIAL CORP. a loan for the acquisition and development of certain real property in Miami–Dade County. As a result of such request, the parties negotiated and agreed to the terms set forth in a Commitment Letter, dated January 12, 2006, that established the terms of the contemplated loan and expressed the agreed conditions under which BUILDERFINANCIAL CORP. would make the contemplated loan to 8699 BISCAYNE (the “Commitment Letter”) [D.E. 132, Exh. 3, Exh. 1].
7. Among other items, the Commitment Letter provided for the issuance of a loan to the Plaintiff by BUILDERFINANCIAL CORP., through its affiliated entity, BUILDER FUNDING, LLC, and dictated that the maximum collective amount of the loan advances thereunder would total $4,247,150.00 over a term of twenty-seven (27) months with a stated interest rate of eight percent (8%) per annum [D.E. 132, Exh. 3, Exh. 1].
8. On or about January 20, 2006, consistent with the provisions of the Commitment Letter, and consistent with the earlier request of Jason Vance, Tamara Vance, and Michael Scaglione on behalf of 8699 BISCAYNE, BUILDERFINANCIAL CORP., through its affiliated entity, BUILDER FUNDING, LLC, entered into a loan agreement which provided that a loan would be made to 8699 BISCAYNE in the original principal sum of $4,247,150.00 (the “Loan”) [D.E. 132, Exh. 3, Exh. 2]. The Loan was evidenced by that certain Promissory Note dated as of January 20, 2006, executed by Jason Vance and Michael Scaglione as managers of 8699 BISCAYNE and made payable to BUILDER FUNDING, LLC, in the original principal amount of $4,247,150.00 (the “Note”) [D.E. 132, Exh. 3, Exh. 4].
9. The Loan Closing Statement, dated January 20, 2006, reflected the following loan expenses being owed by Plaintiff for the Loan:
+------------------------------------------------------------+
¦• Commitment Fee 1 ¦= $ 5,000.00 ¦
+-------------------------------------+----------------------¦
¦• Discount Points 2 ¦= $ 613,400.00 ¦
+-------------------------------------+----------------------¦
¦• Facility Fee 3 ¦= $ 53,750.00 ¦
+-------------------------------------+----------------------¦
¦• Origination Fee 3 ¦= $ 700,000.00 ¦
+-------------------------------------+----------------------¦
¦• Lot Inspection Fee 3 ¦= $ 100.00 ¦
+-------------------------------------+----------------------¦
¦• Construction Administration Fee 3 ¦= $ 500.00 ¦
+-------------------------------------+----------------------¦
¦• Underwriting Fee 3 ¦= $ 500.00 ¦
+-------------------------------------+----------------------¦
¦• Project Fee 3 ¦= $ 500.00 ¦
+-------------------------------------+----------------------¦
¦Total Fees ¦= $1,373,750.00 ¦
+------------------------------------------------------------+
10. In addition, an interest reserve of $630,000.00 (“Interest Reserve”) was created under the Loan by having such funds reserved from the principal Loan amount [D.E. 132, Exh. 3, Exh. 3]. Pursuant to the terms of the Loan, 8699 BISCAYNE was under no obligation to use the funds allocated to the Interest Reserve for the payment of monthly interest on those Loan amounts actually advanced to or on behalf of Plaintiff [D.E. 132, Exh. 3, Exh. 2 and 4].
11. As evidenced by the BUILDERFINANCIAL CORP. Disbursement Log, 8699 BISCAYNE received, on its behalf, $3,617,150.00 of the maximum $4,247,150.00 under the Loan (the “Loan Disbursement Log”) [D.E. 307, Page 1]. These sums were also reflected as being disbursed for the benefit of Plaintiff under the Loan Closing Statement, as acknowledged by Plaintiff.
12. The remaining $630,000.00 Interest Reserve under the Loan, was allocated for the sole benefit of Plaintiff for use toward the payment of monthly interest on the initial disbursement of $3,617,150.00, and any such later disbursements made under the Loan [D.E. 307, Page 1].
13. The Note required Plaintiff to make monthly interest payments, with interest payable at a rate of eight percent (8%) per annum [D.E. 132, Exh. 3, Exh. 4]. As evidenced by the Loan Disbursement Log, Plaintiff was obligated to make these monthly interest payments which commenced in January 2006 on the initial disbursement of $3,617,150.00 [D.E. 307, Page 3]. The interest calculation at the time of the initial disbursement of the Loan for January 2006 is as follows:
14. The January 2006 interest calculation of $8,841.92 was computed using the stated interest rate of eight percent (8%) per annum and based solely on the funds of the Loan which had been advanced and disbursed to or on behalf of Plaintiff, i.e., the $3,617,150.00 sum only.
15. No interest was calculated or charged on the $630,000.00 Interest Reserve.
16. The January 2006 interest payment was paid on behalf of Plaintiff with funds advanced from the $630,000.00 Interest Reserve [D.E. 307, Pages 1 and 3]. Subsequent monthly interest payments...
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