In re Gould
| Decision Date | 07 February 2006 |
| Docket Number | Bankruptcy No. 03-51180.,Adversary No. 04-05045. |
| Citation | 337 B.R. 750 |
| Court | U.S. Bankruptcy Court — District of Connecticut |
| Parties | In re Peter J. GOULD, d/b/a, Cherry Hill Development Co., Debtor. Peter J. Gould, d/b/a, Cherry Hill Development Co., Plaintiff, v. Lawrence S. Berger, U.S. Land Resources, L.P., Carlstadt Associates, Ltd., Keystone NJP IV, L.L.C., Defendants. |
Thomas J. Romans, Esq., Hackensack, NJ, Peter L. Ressler, Esq., Groob Ressler & McQueen, New Haven, CT, for the plaintiff.
Walter J. Fleischer, Jr., Esq., Michael J. Reynolds, Esq., Drinker Biddle & Reath, Florham Park, NJ, Matthew K. Beatman, Esq., Zeisler & Zeisler, Bridgeport, CT, for defendant Keystone NJP IV, L.L.C.
ALAN H.W. SHIFF, Bankruptcy Judge.
Defendant Keystone NJP IV, LLC ("Keystone") brings this motion for summary judgement to dismiss the Second Count of plaintiff-debtor Peter J. Gould's December 7, 2004 complaint. For the reasons that follow the motion is granted.
The following material facts are not in dispute:1
On April 2, 1991, Lensclean, Inc. and Aldine Technologies, Inc. ("Tenants"), both wholly-owned by Gould, entered into a lease of warehouse space in a building located in Carlstadt, New Jersey ("Building") with Carlstadt Associates, Ltd. Keystone's Statement of Material Facts, dated June 27, 2005 ("Keystone Statement") ¶ 1, and Gould's corresponding answer, dated July 27, 2005. The first page of the lease identified both Tenants as Delaware corporations. Keystone Statement ¶ 3 and Gould's corresponding answer. Section 31 of the lease provided that the "Tenant shall have the option to purchase the Building"2 (emphasis added) under certain defined conditions. Keystone Statement ¶ 5 and Gould's corresponding answer.
In December 2002, Gould gave Carlstadt a personal guaranty of the Tenants' obligations under the lease ("Personal Guaranty"). Keystone Statement ¶ 6 and Gould's corresponding answer. In March 2003, Keystone purchased the Building. Keystone Statement ¶ 7 and Gould's corresponding answer.
In June 2003, Keystone filed a summary dispossess complaint against the Tenants in a New Jersey court,3 alleging unpaid rent. Keystone Statement ¶ 8 and Gould's corresponding answer. In mid-August 2003, the Tenants were evicted by the order of that court. Keystone Statement ¶ 9 and corresponding Gould answer.
On August 22, 2003, Gould filed this chapter 11 case. On August 28, 2003, Keystone commenced an action for damages against the Tenants and Gould in the New Jersey Superior Court, Bergen County ("New Jersey court"). Keystone Statement ¶ 10 and corresponding Gould answer. On December 19, 2003 and January 16, 2004, the New Jersey court entered default judgements against the Tenants and Gould.4 Keystone Statement ¶ 12 and Gould's corresponding answer.
On March 4, 2004, Gould wrote to Keystone and the New Jersey court to inform them that he had commenced this bankruptcy case. This was Keystone's first notice of Gould's bankruptcy. Keystone Statement ¶ 42 and Gould's corresponding answer. On the same date, Keystone wrote to the New Jersey court, with a copy to Gould's attorney, that it had learned for the first time that Gould had filed for bankruptcy, and that it would "withdraw [its] motion as to Mr. Gould only. . . ."5 (emphasis in original). Keystone Statement ¶ 44 and Gould's corresponding answer. On March 31, 2004, Gould filed a motion and a "letter brief" in the New Jersey court to vacate the judgements against him.6 Keystone Statement ¶ 46 and Gould's corresponding answer.
On April 22, 2004, Gould filed a contempt motion against Keystone in this court, alleging that it violated the automatic stay, see 11 U. S. C. § 362, by utilizing New Jersey discovery procedures after the commencement of this case.7 Keystone Statement ¶ 47 and Gould's corresponding answer. On July 27, 2004, Keystone filed a motion for relief from the automatic stay to remove property that had been left in the leased premises after the Tenants had been evicted. Keystone Statement ¶ 48 and Gould's corresponding answer. On July 28, 2004, Gould and Keystone entered into a Settlement Agreement and Stipulation ("Settlement Agreement") that was approved by this court on that date. Keystone Statement ¶¶ 49-55 and Gould's corresponding answers. The Settlement Agreement released Keystone from any and all liability "from the beginning of the universe to the date of the [Settlement Agreement]" arising out Keystone's actions as asserted in Gould's contempt motion and Keystone's motion for relief from the automatic stay. See Settlement Agreement ¶ 5. The Settlement Agreement further provided that Gould was given until August 4, 2004 to remove all remaining property from the Building. Id. at ¶ 3. However, if Gould did not remove all of the property by August 31, 2004, Keystone was authorized to "dispose or remove" such property without the further order of the court. Id. The property was not removed by Gould by the August 31, 2004 deadline. Keystone Statement ¶¶ 88-92 and Gould's corresponding answers; Affidavit of Peter J. Gould in Opposition to Summary Judgement, dated July 27, 2005 ("Gould Affidavit") ¶¶ 16-17.
The Second Count of Gould's complaint asserts six categories of relief, see Complaint at 7-8:8
(5) to transfer title to the Building to him for the same price that Keystone paid for it, and to offset any damages awarded to him against the price, See ¶¶ (e) & (f), and
(6) to retrain Keystone from criminally prosecuting him. See ¶ (h).
Keystone bears the burden of establishing that there are no genuine issues of material fact in dispute and that it is entitled to judgment on the Second Count as a matter of law. See F.R.Bankr.P. 7056. Unlike a motion to dismiss for failure of a pleading to state a claim on which relief can be granted, see F.R.Bankr.P. 7012 (b)(6), parties to a motion for summary judgment may present matters outside the pleadings for the court's consideration.9
As the Second Circuit has held, "only when reasonable minds could not differ as to the import of the evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991). Further, the court resolves "all ambiguities and draw[s] all inferences in favor of the nonmoving party," Aldrich v. Randolph Cent. Sch. Dist, 963 F.2d 520, 523 (2d Cir. 1992). But a nonmoving party may not rely "on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986), cert. denied, 480 U.S. 932, 107 S. Ct. 1570, 94 L. Ed. 2d 762 (1987); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)("The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which [a trier of fact] could reasonably find for the plaintiff.").
Personal Guaranty — ¶ (a)
Paragraph 14 of the complaint alleges that, "Lawrence Berger [representing Carlstadt] requested [Gould] to personally guaranty the Tenants' obligations to pay rent under the lease . . . for the sole and limited purpose of showing it to the foreclosing mortgagee and using it to persuade the mortgagee from foreclosing." Gould further alleged that he only complied for "purposes of forestalling the foreclosure". Complaint ¶ 15.
Gould now seeks a declaratory judgment that the Personal Guaranty is nullified for the reason that it was a so-called "single-purpose" guaranty, and it therefore could not be enforced by Keystone. Keystone, on the other hand, argues that the Personal Guaranty is clear on its face, and it is silent as to a single purpose.
When the terms of a contract, e.g., the Personal Guaranty, are clear and unambiguous, courts in this circuit may not look beyond the four corners of the contract to interpret the parties' intentions. See John Hancock Mutual Life Ins. Co. v. Amerford Int'l Corp., 22 F.3d 458, 462 (2d Cir. 1994); Metropolitan Life Ins. Co. v. RJR Nabisco, 906 F.2d 884, 889 (2d Cir. 1990).
The Personal Guaranty is unambiguous. The simple fact is that the allegations of Gould's complaint do not square with the plain language of the document, which states that Gould provided a "personal guaranty for the payment of all sums . . . and the obligations of Tenant under the Lease. . . ." (emphasis added). See Personal Guaranty ¶ 2.
Moreover, Gould does not allege, and there is no basis for concluding, that the Personal Guaranty was involuntary. See Gould Affidavit, ¶ 23 (). Where a party willingly entered into a contract that is clear on its face, courts will not undo the agreement simply because that party is unsatisfied with its bargain. See John Hancock Mutual Life Ins. Co. v. Amerford Int'l Corp., 22 F.3d 458, 462 (2d Cir. 1994).
New Jersey Default Judgements Against Gould — ¶ (b)
Gould also seeks a declaratory judgment that the default judgements against him in the New Jersey Action be declared void ab initio. Keystone responds that those judgements have been vacated by the New Jersey court. See Keystone's Reply Brief dated August 4, 2005 at 8. However, the record is silent as to that occurrence.
Nonetheless, the issue raised by the relief sought in paragraph (b) is not justiciable. Whether the New Jersey judgments were vacated at Keystone's request or they are void as a matter of law, see 11 U.S.C. § 362, they are not viable.
Keystone's Claim in Gould's Bankruptcy Case — ¶¶ (c) & ...
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