Bruin Holdings, Inc. v. Moderski

• Decision Date: 31 December 1996
• Docket Number: Civil No. 3:CV-95-2090.
• Citation: 960 F.Supp. 62
• Parties: BRUIN HOLDINGS, INC., Plaintiff, v. Andrzej K. MODERSKI, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

960 F.Supp. 62

BRUIN HOLDINGS, INC., Plaintiff, v. Andrzej K. MODERSKI, Defendant.

Civil No. 3:CV-95-2090.

United States District Court, M.D. Pennsylvania.

December 31, 1996.

Miles H. Shore, Trina M. Bragdon, Saul, Ewing, Remich & Saul, Philadelphia, PA, for plaintiff.

John B. Dunn, Matergia & Dunn, Stroudsburg, PA, for defendant.

MEMORANDUM AND ORDER

NEALON, District Judge.

Background

This action arises from a Mortgage and Note executed on December 3, 1988 by the defendant, Andrzej K. Moderski, in favor of Nationwide Lending Group, Inc. (Nationwide), which financed the purchase of a parcel of land by defendant from Lands Edge Enterprises, Inc. (Lands Edge). That same date, Nationwide assigned the Note to Hill Financial Savings Association (Hill Financial). On March 8, 1989 the Federal Home Loan Bank Board (FHLBB) appointed the Federal Savings and Loan Insurance Corporation (FSLIC) as Conservator for Hill Financial. FSLIC was succeeded as Conservator by Resolution Trust Corporation (RTC) on August 9, 1989. Additionally, RTC was appointed Receiver for Hill Financial on October 12, 1989. On April 9, 1993, RTC, as receiver, assigned all its right, title, and interest in the defendant's mortgage to the Plaintiff, Bruin Holdings, Inc., which was recorded October 31, 1994.

In May of 1989, the defendant discovered that the property subject to the Note included protected wetlands and, therefore, was unbuildable. However, the defendant continued to make payments on the note. On March 16, 1990, the defendant received an engineer's report indicating that the entire property was wetlands and unbuildable because of certain state and federal regulations. Based on the engineer's report, the defendant demanded that the seller, Lands Edge, rescind the contract and refund all monies expended by the defendant. Simultaneously, the defendant advised Meridian Mortgage, RTC's servicer, that the property was unbuildable and that settlement negotiations were ongoing with the seller.

By letter dated December 14, 1990, the defendant was notified that Meridian Mortgage had transferred the servicing of the loan to Knutson Mortgage Corporation (Knutson). On January 21, 1991, defendant advised Knutson of the problems with the subject property and the proposed filing of a complaint against Lands Edge. RTC responded to the defendant's January 21, 1991 letter on February 19, 1991, advising that any action against the seller was of no concern to it and that it would continue to hold the defendant liable under the Note. On April 23, 1991, the defendant responded to the RTC's letter of February 19, 1991 expressing his disagreement with RTC's position and contending that there was a relationship between Nationwide and Lands Edge because Lands Edge allegedly arranged for the financing.

The defendant filed suit against Lands Edge in this court on April 30, 1991. M.D.Pa.Civil Action No. 3:91-cv-0577. On September 23, 1991, Knutson demanded payment of the full amount of the balance due on the Note. The defendant responded by letter dated October 17, 1991, advising of the litigation pending in this court against Lands Edge. Again, on January 29, 1992, defendant contacted Knutson apprising it of the status of the litigation against Lands Edge.

On June 22, 1992, defendant informed RTC and Knutson of the court approved settlement in the action filed by him against the seller, Lands Edge. The settlement required the defendant to reconvey by quitclaim deed the subject property to Lands Edge which, in turn, agreed to assume any financial obligation to Nationwide, plaintiff's predecessor in interest, as well as claims of RTC. However, by letter dated June 22, 1992, RTC stated that it would continue to hold defendant liable under the Note.

As noted above, on April 9, 1993, RTC, as receiver, assigned all its right, title, and interest in the defendant's mortgage to the Plaintiff, Bruin Holdings, Inc., which was recorded October 31, 1994. On September 14, 1993, plaintiff notified defendant of the assignment and, additionally, demanded payment in full. The defendant informed the plaintiff by letter dated October 1, 1993 of the action and settlement against Lands Edge and suggested that plaintiff look to Lands Edge for payment of the note.

The plaintiff notified the defendant that it would institute legal proceedings by letter dated November 4, 1993, and on May 31, 1994, gave notice of intention to foreclose. Next, by letter date November 14, 1994, plaintiff requested Lands Edge to make payment due under the Note as agreed to by the settlement between defendant and Lands Edge.

On March 8, 1995, this action was originally filed in the Court of Common Pleas of Montgomery County, Pennsylvania by the plaintiff, Bruin Holdings, Inc. The case was then transferred to the Court of Common Pleas of Monroe County, Pennsylvania by court order dated October 27, 1995. The defendant filed an answer to the complaint on December 6, 1995 and on December 12, 1995, removed the action to this court pursuant to 28 U.S.C. § 1441.

By Order dated April 25, 1996, Magistrate Judge Durkin directed the parties to file any motion raising the statute of limitations issue by May 8, 1996. On May 20, 1996, the defendant filed a motion for summary judgment with a concise statement of material facts and exhibits. A brief in support of the motion was submitted on May 30, 1996. The plaintiff filed a brief in opposition with appendix on June 17, 1996, together with a response to the defendant's concise statement of facts. A reply brief was filed by the defendant on July 1, 1996. On September 30, 1996, the plaintiff filed a supplemental brief in opposition to defendant's motion for summary judgment. The defendant submitted a reply to the plaintiff's supplemental brief on October 21, 1996.

On October 30, 1996 the plaintiff filed a motion for summary judgment and a brief in support was submitted on November 11, 1996. A Report and Recommendation was issued on November 15, 1996 recommending that defendant's motion for summary judgment be granted and plaintiff's motion for summary judgment be dismissed as moot. The plaintiff submitted objections on November 27, 1996 and on December 6, 1996, defendant filed a response to the plaintiff's objections. Plaintiff forwarded a letter to the court on December 16, 1996, containing further case authority in support of its position. For the reasons that follow, the court will not adopt the Magistrate Judge's report.

Analysis

When objections to a report and recommendation have been filed, under 28 U.S.C. 636(b)(1)(C), the court must make a de novo consideration of those portions of the report to which objections have been made. See Sample v. Diecks, 885 F.2d 1099, 1106 n. 3 (3d Cir.1989). In so doing, the court may accept, reject, or modify, in whole or in part, the findings and recommendations contained in the report. 28 U.S.C. § 636(b)(1); Local Rule 72.31. Further, the court may, in the exercise of sound judicial discretion, rely on the Magistrate Judge's proposed findings and recommendations. United States v. Raddatz, 447 U.S. 667, 676, 100 S.Ct. 2406, 2412-13, 65 L.Ed.2d 424 (1980); Goney v. Clark, 749 F.2d 5, 7 (3d Cir.1984).

As stated above, both parties have filed motions for summary judgment. Summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." F.R.C.P. 56(c); see also Turner v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir.1990). The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Young v. Quinlan, 960 F.2d 351, 357 (3d Cir.1992). "Once the moving party has carried the initial burden of showing that no genuine issue of material fact exists, the non-moving party `must make a showing sufficient to establish the existence of every element essential to his case, based on the affidavits or by the depositions and admissions on file.'" Pastore v. Bell Telephone Co. of Pennsylvania, 24 F.3d 508 (3d Cir.1994). All inferences, however, "`should be drawn in the light most favorable to the non-moving party, and where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true."' Id., 24 F.3d at 512. See also Betz Laboratories, Inc. v. Hines, 647 F.2d 402 (3d Cir.1981).

"[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original). "As to materiality, `it is the substantive law's identification of which facts are critical and which facts are irrelevant that governs.'" Gabai v. Jacoby, 800 F.Supp. 1149, 1153 (S.D.N.Y.1992). A dispute is "genuine" only if "there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 243, 106 S.Ct. at 2507. "In sum, if the court determines that the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Gabai, 800 F.Supp. at 1154.

This court has conducted a careful de novo review of the record, including the plaintiff's objections to the Magistrate Judge's Report and the defendant's response to the plaintiff's objections. As noted, the Magistrate Judge's Report recommends that the defendant's motion for summary judgment be granted and the plaintiff's motion for summary judgment be dismissed as moot. The plaintiff raises two objections to the Magistrate Judge's report and recommendation. First, plaintiff asserts that the Magistrate Judge incorrectly determined that the statute of limitations began to run on March 1, 1991. Lastly, the plaintiff contends that the Magistrate Judge's...