Kibunja v. ALTURAS, LLC

• Decision Date: 19 August 2004
• Docket Number: No. 02-CV-444, 02-CV-445.,02-CV-444, 02-CV-445.
• Parties: Victor M. KIBUNJA and Shirley O. Kibunja, Appellants v. ALTURAS, L.L.C., Appellee
• Court: D.C. Court of Appeals

856 A.2d 1120

Victor M. KIBUNJA and Shirley O. Kibunja, Appellants v. ALTURAS, L.L.C., Appellee

No. 02-CV-444, 02-CV-445.

District of Columbia Court of Appeals.

Argued June 6, 2003.

Decided August 19, 2004.

Julius Daugherty, Jr., with whom W. Izal Saddler, Washington, was on the brief, for appellants.

Paul A. Kaplan, Washington, for appellees.

Before TERRY, RUIZ, and REID, Associate Judges.

TERRY, Associate Judge:

These appeals challenge the validity of a foreclosure sale of a commercial real estate parcel ("the property") formerly owned by appellants Victor and Shirley Kibunja. The foreclosure sale resulted from appellants' failure to make payments on a promissory note for which the property was held as security. On appeal from a summary judgment in favor of the purchaser, Alturas, L.L.C., appellants argue (1) that the trial court abused its discretion in granting summary judgment for Alturas without allowing more time for discovery, (2) that the court erred in ruling that there was no genuine issue of material fact as to the amount of money owed under the promissory note, and (3) that the court erred in ruling that appellants were afforded adequate statutory notice of the second foreclosure sale. We affirm.

I. FACTUAL BACKGROUND

The property, officially designated as Lot 800 in Square 2557, lies at the intersection of California Street and Florida Avenue, N.W. Because it faces both streets, it has two street addresses: 1724 California Street and 1781 Florida Avenue. On November 9, 1987, appellants borrowed money from Chrysler First Business Credit Corporation, secured by a deed of trust on the property. The promissory note was in the principal amount of $880,000, with a maturity date of November 9, 1992, and an interest rate of 13.25%, and called for monthly payments of $9,906.81. On June 15, 2000, Alturas purchased the promissory note and deed of trust. As of December 15, 2000, appellants were in default on their obligations under the promissory note, having failed for several years to make payments on the loan and to pay real estate taxes. The total amount then due under the note — principal, interest, and unpaid taxes — was said to be $2,184,809.79. Alturas ultimately paid $1.1 million to satisfy the District of Columbia's tax liens against the property. At the time Alturas purchased the note in June 2000, Victor Kibunja was under Chapter 11 bankruptcy protection. On December 18, 2000, the Chapter 11 case was dismissed. Three days later, on December 21, Alturas filed a notice of foreclosure sale with the District of Columbia Recorder of Deeds, stating its intent to conduct a foreclosure sale on January 24, 2001, at 12:45 p.m. The foreclosure sale was also advertised for five days in The Washington Times. At 10:45 a.m. on the date of the scheduled sale, Victor Kibunja filed a Chapter 13 bankruptcy petition. As a result, the trustee announced at the foreclosure sale that the sale would go on, but would be subject to obtaining subsequent bankruptcy court approval.¹ Bids were conditionally taken, and Alturas was the highest bidder at $1.15 million.

Two days later, on January 26, Alturas filed in the bankruptcy court a motion to dismiss ab initio the Chapter 13 case and to ratify the sale retroactively. Mr. Kibunja also filed a motion for voluntary dismissal of his bankruptcy petition. The bankruptcy court denied Alturas' motion, but accepted Mr. Kibunja's voluntary dismissal and entered a handwritten order stating: "Case has been dismissed. Creditor violated the automatic stay by going forward with foreclosure after the filing of the petition and will not be granted sanctions. It further appears that the foreclosure sale was void."

Having thus failed to obtain approval of the foreclosure sale from the bankruptcy court, the trustee on February 2, 2001, advertised and gave notice of a second foreclosure sale to be held on February 15. The "Notice of New Foreclosure Sale" was sent by certified mail, return receipt requested, to all those attending the earlier sale, including Mr. and Mrs. Kibunja, and advertisements were again published in The Washington Times. The sale went forward on February 15, 2001 — thirteen days after the second notice, and twenty-two days after the first sale — and Alturas was once again the successful bidder.

When the Kibunjas failed to relinquish possession of the property, Alturas filed suit for possession in the Landlord and Tenant (L & T) Branch of the Superior Court on June 6, 2001.² A money judgment was not requested. Appellants raised a plea of title in defense, asserting that the second foreclosure sale was improper. On October 17, 2001, the action was certified to the Civil Division in response to the plea of title, pursuant to L & T Rule 5(c).

On November 2, 2001, Alturas filed a motion for summary judgment, and on December 4 the Kibunjas filed an opposition. The main thrust of appellants' opposition was that they were not given adequate notice of the second foreclosure sale. Appellants also argued that "the balance owed for the subject property on the plaintiff's December 21, 2000, notice of foreclosure is at issue." However, appellants did not file with their opposition an affidavit pursuant to Civil Rule 56(f)³ explaining how and why further discovery was needed in order to respond. Furthermore, at the time their opposition was filed, appellants had yet to serve interrogatories or document requests, as allowed under L & T Rule 10(c). It was not until March 1, 2002, that appellants served Alturas with interrogatories and a request for documents, and the corresponding "Certificate Regarding Discovery" was not filed with the court until March 8, 2002.

On that same day, March 8, the trial court granted summary judgment in favor of Alturas. The Kibunjas filed timely notices of appeal.⁴ Months later, on July 8, 2002, appellants filed in the trial court a motion for reconsideration, arguing inter alia that they had not been given an adequate opportunity for discovery. They argued that they had no reasonable opportunity for discovery until the cases were transferred to the Civil Division on November 5, 2001 — which was three days after Alturas filed its motion for summary judgment — since the L & T Rules provide for only limited discovery. Alturas filed an opposition, and by order dated August 31, 2002, the trial court denied the motion for reconsideration.

II. ADEQUATE TIME FOR DISCOVERY

According to the scheduling order entered by the trial court on February 1, 2002, discovery was to be closed on April 1, 2002. The date by which dispositive motions were to be decided was May 16, 2002, but the court granted Alturas' motion for summary judgment on March 8, 2002. Appellants now argue that the court abused its discretion in rendering summary judgment before discovery was scheduled to be closed, and before the date set for dispositive motions to be decided. They assert that the trial court decided "without warning ... that the assigned Track I calendar would be rescinded, and without opportunity ... to incorporate discovery responses into [the] opposition." Specifically, appellants argue (1) that they were unable to refute the amount of debt owed under the promissory note without first gaining information from Alturas (which was the only source of information on how that figure was calculated); (2) that they anticipated "the opportunity to plug in evidence that elucidated the basis for their dispute" with that figure as information became available through discovery; and (3) that filing a Rule 56(f) affidavit with their opposition would have been premature, since dispositive motions were not to be decided until May 16, 2002. We reject each of these arguments.

"[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, 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." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (emphasis added). The record here shows that appellants had adequate time for discovery to contest the amount they owed under the promissory note. The case was certified to the Civil Division on October 17, 2001, thus giving appellants the right, under L & T Rule 10(c),⁵ to initiate the discovery process. Even if we focus on the later date of November 2, 2001, when Alturas filed its motion for summary judgment, appellants filed their opposition on December 4, 2001, more than a month later. Assuming that discovery was even necessary for the sort of information sought by appellants, either time frame (i.e., from October 17 or from November 2) gave them ample opportunity to seek the relatively uncomplicated information which they now claim they needed, namely, how the figure of $2,184,809.79 was calculated. Appellants' argument is further weakened by the fact that they made no attempt at all to obtain discovery during the period in which they now say they needed it. They did not do so until March 1, 2002, nearly nine months after the complaint was filed and nearly three months after they filed their opposition to the summary judgment motion. Moreover, appellants cannot plausibly argue that they relied on the scheduling order, since it was not entered until almost two months after they filed their opposition.

Since adequate time existed for discovery, the issue becomes whether the trial court may permissibly grant a motion for summary judgment before the date on which discovery is scheduled to close and the date by which dispositive motions are set to be decided. Alturas is correct that there is no rule or case law requiring the court to wait until the deadline for discovery before deciding a summary judgment motion. On the contrary, in Hollins v. Federal Nat'l Mortgage Ass'n, 760 A.2d 563 (D.C.2000), summary...