Keybank Nat'l Ass'n v. Voyager Grp., L.P., Consolidated Case No. 10-0453

• Decision Date: 13 September 2012
• Docket Number: Consolidated Case No. 10-0453
• Parties: KEYBANK NATIONAL ASSOCIATION, Plaintiff, v. VOYAGER GROUP, L.P. and VOYAGER INVESTMENTS LP, Defendants. SPANISH PEAKS LODGE, LLC, VOYAGER GROUP, L.P. and VOYAGER INVESTMENTS, L.P., Plaintiffs, v. KEYBANK NATIONAL ASSOCIATION and KEYBANK CAPITAL MARKETS, INC., Defendants. SPANISH PEAKS HOLDINGS II, LLC, Successor to Spanish Peaks Holdings, LLC, Plaintiff, v. KEYBANK NATIONAL ASSOCIATION and KEYBANC CAPITAL MARKETS, INC., Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

KEYBANK NATIONAL ASSOCIATION, Plaintiff,

v.VOYAGER GROUP, L.P. and VOYAGER INVESTMENTS LP, Defendants.

SPANISH PEAKS LODGE, LLC, VOYAGER GROUP, L.P.

and VOYAGER INVESTMENTS, L.P., Plaintiffs,

v.KEYBANK NATIONAL ASSOCIATION and KEYBANK CAPITAL MARKETS, INC., Defendants.

SPANISH PEAKS HOLDINGS II, LLC, Successor to Spanish Peaks Holdings, LLC, Plaintiff,

v.KEYBANK NATIONAL ASSOCIATION and KEYBANC CAPITAL MARKETS, INC., Defendants.

Consolidated Case No. 10-0453

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Dated: September 13, 2012

AMBROSE, Senior District Judge

OPINIONand

ORDER OF COURT

Synopsis

KeyBank National Association filed a Motion for Summary Judgment on its Affirmative Claim for Money Judgment. (ECF No. 110). KeyBank National Association and KeyBanc Capital Markets, Inc. (collectively "KeyBank") also filed a Motion for Summary Judgment on the Affirmative Claims of Spanish Peaks Lodge, LLC ("SP Lodge"), Voyager Group, LP and Voyager Investments LP (collectively "Voyager Entities"), and Spanish Peaks Holdings II, LLC ("SP Holdings"). (ECF No. 112). Specifically, KeyBank seeks summary judgment on its breach of contract claims against Voyager Entities and a money judgment for all amounts due under the Credit Note ("Note") issued to Lodge. (ECF No. 110). Additionally, KeyBank seeks a dismissal of all claims filed by Voyager Entities, SP Lodge, and SP Holdings. (ECF No. 112). After careful consideration of submissions and as more fully set forth below, KeyBank's Motions for Summary Judgment (ECF Nos. 110 and 112) are granted in part and denied in part as set forth below.

I. Background

By way of background, all actions consolidated at this case arise from KeyBank's alleged failure to provide the necessary financing for a construction project located in Big Sky, Montana.

The Voyager Entities own SP Holdings. SP Holdings is the owner and developer of The Club at Spanish Peaks ("the Club"). SP Holdings planned to construct "The Lodge at Spanish Peaks" (the "Lodge Project") as the centerpiece of the Club. SP Holdings created SP Lodge for the explicit purpose of developing and constructing the Lodge Project. SP Holdings conveyed to SP Lodge the right to construct the Lodge on the Club's land, but retained its ownership of the land.

In 2007, SP Lodge entered into discussion with KeyBank National Association to provide the financing for the Lodge Project. The parties have introduced a loan Commitment Letter signed by the parties in the summer of 2007. The loan commitment was for $120,000,000.

In the meantime, KeyBank and SP Lodge entered into a $5,000,000 Bridge Loan to enable SP Lodge to begin construction immediately. The Voyager Entities guaranteed the repayment of the Bridge Loan and entered into a Payment Guaranty. The Bridge Loan and Payment Guaranty were finalized on September 28, 2007.

The $120,000,000 credit facility loan never happened. SP Lodge defaulted on the Bridge Loan. KeyBank demanded repayment from the Voyager Entities. The Voyager Entities have failed to make any payment to KeyBank.¹

As a result of the above, the parties initiated the instant lawsuits.

II. Legal Discussion

A. Standard of Review

Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against the party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

In considering a motion for summary judgment, this Court must examine the facts in a light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party todemonstrate that the evidence creates no genuine issue of material fact. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir. 1987). The dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex, 477 U.S. at 322.

Once the moving party satisfies its burden, the burden shifts to the nonmoving party, who must go beyond its pleadings, and designate specific facts by the use of affidavits, depositions, admissions, or answers to interrogatories showing that there is a genuine issue for trial. Id. at 324. Summary judgment must therefore be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir. 1988), quoting, Celotex, 477 U.S. at 322.

B. Claims Against Key Bank

1. SP Lodge's Breach of Contract Claim Against KeyBank

SP Lodge alleges a breach of contract claim against KeyBank for breach of the Commitment Letter. (ECF No. 65). Montana law² provides that "[i]t is essential to the existence of a contract that there be: (1) identifiable parties capable of contracting; (2) their consent; (3) a lawful object; and (4) a sufficient cause or consideration." Mont. Code Ann. §28-2-102. Montana law further provides as follows:

The interpretation and construction of a contract is a question of law. Corporate Air, ¶ 30 (citation omitted). " 'A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.' " Corporate Air, ¶ 30 (quoting § 28-3-301, M.C.A.). When a contract is in writing, the parties' intentions are to be determinedfrom the writing alone, if possible. Corporate Air, ¶ 30 (citing § 28-3-303, M.C.A.); State ex rel. Mont. Dept. of Transp. v. Asbeck, 2003 MT 337, ¶ 18, 318 Mont. 431, 80 P.3d 1272 (citation omitted) ("in interpreting a written contract, the intention of the parties is ascertained 'first and foremost' from the writing alone"). " 'The whole of a contract is to be taken together so as to give effect to every part if reasonably practicable, each clause helping to interpret the other.' " Richards v. JTL Group, Inc., 2009 MT 173, ¶ 14, 350 Mont. 516, 212 P.3d 264 (quoting § 283-202, M.C.A.). "It is [a] well-established principle of contractual construction that in interpreting a written instrument, the court will not isolate certain phrases of the instrument to garner the intent of the parties, but will grasp the instrument by its four corners and in the light of the entire instrument, ascertain the paramount and guiding intent of the parties. Mere isolated tracts, clauses and words will not be allowed to prevail over the general language utilized in the instrument." Rumph v. Dale Edwards, Inc., 183 Mont. 359, 368, 600 P.2d 163, 168 (1979) (citations omitted); accord Sandtana, Inc. v. Wallin Ranch Co., 2003 MT 329, ¶ 26, 318 Mont. 369, 80 P.3d 1224 (citations omitted). "Particular clauses of a contract are subordinate to its general intent." Section 28-3-307, M.C.A.. Moreover, contract terms that are inconsistent with the general nature of the contract or the primary intention of the parties are to be rejected. Section 28-3-503, M.C.A.; Rumph, 183 Mont. at 369, 600 P.2d at 169.

"Whether an ambiguity exists in a contract is a matter of law. An ambiguity's existence must be determined on an objective basis." Richards, ¶ 26 (citation omitted). An ambiguity exists when the contract language, taken as a whole, could reasonably be given two different meanings. Richards, ¶ 26 (citation omitted).... "Where the language of a contract is unambiguous—i.e., reasonably susceptible to only one interpretation—the duty of the court is to apply the language as written." Corporate Air, ¶ 32 (citation omitted).

Krajacich v. Great Falls Clinic, LLP, No. DA 11-0621, 2012 WL 1319684, *3, 5 (Mont. 2012); see also, Anaconda Public Schools, Bd. of Trustees of Anaconda School Dist. No. 10 v. Whealon, 363 Mont. 344, 350, 268 P.3d 1258, 1262-63 (Mont. 2012) ("If the court finds that contract language is ambiguous, it may consider extrinsic or parol evidence to resolve the ambiguity." (quotation omitted)).

KeyBank asserts that it is entitled to summary judgment as to the SP Lodge's breach of contract claims against it for four reasons: 1) The Commitment Letter was not signed by KeyBank and, thus, is unenforceable; 2) The Commitment Letter is non-binding by its written Terms; 3) The Commitment Letter expired by its terms; and 4) SP Lodge failed to satisfy their own conditions precedent set forth in the Commitment Letter. (ECF No. 113, pp. 7-15). I will address each in turn.

a. Signed Commitment Letter

KeyBank argues there was no final version of the Commitment Letter that was formally signed by both parties. (ECF No. 113, pp. 8-9). To that end, KeyBank points to evidence that signatures were executed on different days to different versions of the Commitment Letter. Id; see also, ECF No. 140, pp 2-4 and ECF No. 134-47. As a result, KeyBank argues that SP Lodge has failed to produce a signed, enforceable contract and, therefore, there can be no breach of contract claim. Id. In response, SP Lodge argues that there was only one Commitment Letter and that Commitment Letter is a legally enforceable...