BancorpSouth Bank v. Hazelwood Logistics Ctr. LLC
| Decision Date | 23 November 2011 |
| Docket Number | No. 4:10CV590-HEA,4:10CV590-HEA |
| Parties | BANCORPSOUTH BANK, Plaintiff, v. HAZELWOOD LOGISTICS CENTER, LLC, et al., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on Plaintiff BancorpSouth Bank's ("Bancorp") Motion for Summary Judgment against Defendants Hazelwood Logistics Center LLC f/k/a Hazelwood Commerce Center LLC ("HLC"), Hazelwood Commerce Redevelopment Corporation ("HCRC"), and Paul J. McKee Jr. ("McKee"), individually and as Trustee of the Paul J. McKee Jr. Revocable Trust ("McKee Trust") ("Defendants" collectively) [Doc# 78]. Defendants filed a memorandum in opposition to Bancorp's motion [Doc# 90], to which Bancorp replied [Doc# 92]. Plaintiff Bancorp also filed a Motion to Sever the Intervenor Murphy Property Tax Consulting, Inc. ("MPT") [Doc#84]. MPT filed a memorandum in opposition to the motion [Doc# 85], to which Bancorp replied [Doc# 87]. Additionally, Bancorp filed a Motion for Summary Judgmentagainst Intervenor MPT [Doc# 97] , and MPT filed a Motion for Summary Judgment against Bancorp [Doc# 103].
On October 7, 2005, HCC and HCRC ("Hazelwood" collectively) entered, as borrowers, into a Land Acquisition Loan Agreement with The Signature Bank ("Signature Bank") as the lender. Additionally, on August 11, 2006, Hazelwood entered into a Development Loan Agreement with Signature Bank as the lender. From March 20, 2007 through September 17, 2009, the Development Loan Agreement was amended seven times. Pursuant to the Land Acquisition Loan Agreement and the Development Loan Agreement ("Loan Agreement" collectively), Signature Bank made a loan available to Hazelwood in the maximum principal amount of $36,242,700 ("Loan"). The Loan is evidenced by the Note dated August 11, 2006 and that certain Amended & Restated Note dated as of January 28, 2009, as amended September 17, 2009, executed by Hazelwood, as maker, to the order of Bancorp (as successor by merger to Signature Bank), as payee, in the principal face amount of $35,197,500.00, as amended by that First Amendment to Promissory Note executed on or about September 17, 2009(collectively, as amended, modified, extended, renewed, restated or supplanted, the "Promissory Note"). Bancorp, a Mississippi banking corporation, is a successor by merger to Signature Bank in relation to the Loan Agreement, the Loan, and the Promissory Note. According to Bancorp, on October 30, 2009, the Loan matured and all principal and interest outstanding became due and owing.2 ___HCRC was originally formed for the purpose of acquiring, environmental remediation and redevelopment of certain real property located in the City of Hazelwood, Missouri now known as Hazelwood Logistics Center (the "Property"). A portion of the Property had previously served as a landfill. Prior to the redevelopment of the Property, it was discovered that excessive, unsafe levels of methane were present, which was deemed a health concern and rendered the Property uninhabitable, thus preventing construction and sale of the land.
MPT contracted with HLC to perform work to obtain tax surveys for property owned by HLC for the 2007 through 2010 tax years. In light of the fact that St. Louis County, or an agency thereof, was poised to issue a real estate tax refund to Hazelwood for approximately $468,863.00 (the "Tax Refund"), Bancorp sought a Writ of Attachment on April 30, 2010 (the "Writ"), seizing the TaxRefund in order to secure recovery on its claim. The Court granted said Writ. On January 3, 2011, MPT filed its Complaint of Intervenor in the underlying case claiming entitlement to a portion of the Tax Refund. MPT asserts that it is entitled to fees for its services in the amount equal to thirty-five percent (35%) of the tax savings realized for 2007 through 2010.
The standard for summary judgment is well settled. In determining whether summary judgment should issue, the Court must view the facts and inferences from the facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005); Littrell v. City of Kansas City, Mo., 459 F.3d 918, 921 (8th Cir. 2006). The moving party has the burden to establish both the absence of a genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in his pleadings but by affidavit or other evidence must setforth specific facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(e); Anderson 477 U.S. at 256; Littrell , 459 F.3d at 921. "The party opposing summary judgment may not rest on the allegations in its pleadings; it must 'set forth specific facts showing that there is a genuine issue for trial.'" United of Omaha Life Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir.2006) (quoting Fed.R.Civ.P. 56(e)); Hitt v. Harsco Corp., 356 F.3d 920, 923 (8th Cir. 2004). An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party" on the question. Anderson, 477 U.S. at 248; Woods, 409 F.3d at 990.
To survive a motion for summary judgment, the Putman v. Unity Health System, 348 F.3d 732, 733-34 (8th Cir. 2003). A plaintiff may not merely point to unsupported self-serving allegations, but must substantiate allegations with sufficient probative evidence that would permit a finding in the plaintiff's favor. Wilson v. Int'l Bus. Mach.Corp., 62 F.3d 237, 241 (8th Cir.1995). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. 242 at 252; Davidson & Associates v. Jung, 422 F.3d 630, 638 (8th Cir. 2005). Summary Judgment will be granted when, viewing the evidence in the light most favorable to the nonmoving party and giving the nonmoving party the benefit of all reasonable inferences, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Samuels v. Kansas City Mo. Sch. Dist., 437 F.3d 797, 801 (8th Cir. 2006). "Mere allegations, unsupported by specific facts or evidence beyond the nonmoving party's own conclusions, are insufficient to withstand a motion for summary judgment." Thomas v. Corwin, 483 F.3d 516, 526-7(8th Cir. 2007). "Simply referencing the complaint, or alleging that a fact is otherwise, is insufficient to show there is a genuine issue for trial." Kountze ex rel. Hitchcock Foundation v. Gaines, 2008 WL 2609197, 3 (8th Cir. 2008).
Bancorp filed a Motion for Summary Judgment[Doc# 78] against Defendants HLC, HCRC, and Paul J. McKee Jr. (individually and as trustee ofMcKee Jr. Revocable Trust). Bancorp's Complaint alleges breach of contract against Hazelwood (Count I); breach of guaranty against McKee Jr. (Count II); and breach of guaranty against the McKee Trust (Count III). In Missouri, a breach of contract action includes the following essential elements: (1) the existence and terms of a contract; (2) that plaintiff performed or tendered performance pursuant to the contract; (3) breach of the contract by the defendant; and (4) damages suffered by the Plaintiff. Keveney v. Missouri Military Academy, 304 S.W.3d 98, 104 (Mo. 2010); see also Howe v. ALD Servs., Inc., 941S.W.2d 645, 650 (Mo.App.1997). Defendants do not dispute that the loan has not been paid in full, nor do they deny the validity of the loan agreement, promissory note or guaranties. Defendants do, however, submit two affirmative defenses: (1) Defendants' non- performance under the Promissory Note and Guaranty is excused by the unforeseen and unanticipated presence of methane gas on the property thereby rendering performance commercially impossible or impractical (i.e. commercial frustration); and (2) this Court does not have subject jurisdiction due to lack of diversity between all the real parties in interest and the Defendants.
The commercial frustration doctrine excuses performance of contractual obligations when a happening, not foreseen by the contractors, destroys, or nearly destroys, the contracted performance's value of the contract's purpose, providedthe contractors did not cause the happening and were unable to avoid its consequence. American Laminates, Inc. v. J.S. Latta Co., 980 S.W.2d 12, 19 (Mo.App. W.D., 1998). Under Missouri law, to preserve the certainty of contracts, courts are to apply this doctrine sparingly-only when its application would not work an extreme hardship. Howard v. Nicholson, 556 S.W. 2d 477, 483 (Mo.App. 1977). As a general matter, if a party to a contract wants its performance to be excused upon the happening of an event arising after the formation of a contract, which event reasonably could be foreseen at the time of contracting, that party must expressly provide for that contingency in the contract, even if that event would render performance impossible, impractical, or commercially-frustrated. See Clean Uniform Co. St. Louis v. Magic Touch Cleaning, Inc. 300 S.W.3d 602,...
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