Mark Andrew of Palm Beaches v. Gmac Comm. Mortg.
| Decision Date | 03 July 2003 |
| Docket Number | No. 01 CIV. 1812(JGK).,01 CIV. 1812(JGK). |
| Citation | 265 F.Supp.2d 366 |
| Parties | THE MARK ANDREW OF THE PALM BEACHES, LTD., the Mark Andrew Operating Company, Inc., Green Fields & White Doors, Inc., Flagler Life Care, Inc., Loretta Gardner and Robert Gardner Plaintiffs, v. GMAC COMMERCIAL MORTGAGE CORPORATION, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Willie E Gary, F Shields McManus, Williams, Parenti, Finney, Lewis, Mc-Manus, Watson & Sperando, Stuart, FL, for The Mark Andrew of the Palm Beaches, Ltd, The Mark Andrew Operating Company, Inc, Flagler Life Care, Inc, Loretta Gardner, Robert C Gardner, Green Fields & White Doors, Inc.
This action seeks to recover damages from the defendant, the GMAC Commercial Mortgage Corporation ("GMAC"), for the alleged failure to fund a loan for the construction of a continuing care retirement community in West Palm Beach, Florida known as The Mark Andrew. The Mark Andrew of the Palm Beaches, Ltd., the Mark Andrew Operating Company, Inc., Green Fields & White Doors, Inc., Flagler Life Care, Inc., Lorretta Gardner and Robert Gardner (collectively "the plaintiffs") have sued the defendant for, among other things, common law fraud and breach of contract for GMAC's alleged failure to live up to its obligations to provide the plaintiffs $9 million in loan funds.
GMAC has moved for summary judgment on all of the plaintiffs' claims, including breach of contract (Count 1); promissory estoppel (Count 2); fraud (Count 4); negligent misrepresentation (Count 5); bad faith and unfair dealing (Count 7); and failure to exercise reasonable care in processing of loan application (Count 8).1 GMAC argues, among other things, that at no time was there any contract to fund any loan, because the parties never signed the necessary documents, that GMAC never signed the necessary commitment letter that would have obligated GMAC to loan the plaintiffs money, and that the parties never agreed upon material terms of the proposed loan, before GMAC decided to abandon the final negotiations. GMAC also argues that any claim based on alleged oral guarantees made by GMAC to provide a loan is barred by the statute of frauds applicable to transactions between banks and borrowers. On the other hand, the plaintiffs argue that summary judgment would be inappropriate on any of its claims, because there are material facts in dispute with respect to whether a finalized contract did in fact exist and whether GMAC did agree to finalize a loan. The plaintiffs main contention is that GMAC finalized the loan, and went so far as to send to the plaintiffs loan closing documents, including a promissory note, that were signed and returned to GMAC. The plaintiffs contend that after they signed the closing documents, GMAC simply breached its obligations and refused to loan the agreed upon $9 million.
The standard for granting summary judgment is well established. Summary judgment may not be granted unless "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 a judgment as a matter of law." Fed. R.Civ.P. 56(c); see also Celotex Corp: v. Catrett, All U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Gallo v. Prudential Residential Servs. Ltd. P'ship, 22 F.3d 1219,1223 (2d Cir.1994). Gallo, 22 F.3d at 1224. The moving party bears the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstratefs] the absence of a genuine issue of material fact." Celotex, All U.S. at 323, 106 S.Ct. 2548. The substantive law governing the case will identify those facts that are material and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., All U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., A15 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)); see also Gallo, 22 F.3d at 1223. Summary judgment is improper if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party. See Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir.1994). If the moving party meets its burden, the burden shifts to the nonmoving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed R. Civ. P. 56(e). The nonmoving party must produce evidence in the record and "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible." Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir. 1993); see also Scotto v. Almenas, 143 F.3d 105, 114-15 (2d Cir.1998) (collecting cases). Unless otherwise noted, the following facts are undisputed.
In or about 1994 and 1995, Loretta Gardner, a licensed real estate broker with real estate development experience, along with her husband, Dr. Robert Gardner, formed the Flagler Life Care, Inc. corporation. .) Through this corporation, the Gardners sought to acquire a large number of contiguous parcels of land located on Flagler Drive in West Palm Beach, Florida that was referred to as the "Assemblage." .) The Gardners intended, after purchasing the land in the Assemblage, to construct a "Ritz-Carlton" quality senior citizen's continuing care retirement community called "The Mark Andrew." .) The expected cost of the Mark Andrew was anticipated to exceed $100 million. .) The Mark Andrew was to consist of approximately 150 independent living units, 66 assisted living units and a 54 bed nursing care facility, which included 15 units for the care of Alzheimers patients and common support areas. .)
As of 1996, the Gardners had purchased most of the 20 contiguous parcels in the Assemblage, and those parcels were all encumbered by substantial mortgages. .) In or about 1996 and 1997, the Gardners entered into contracts to purchase the two remaining parcels in the Assemblage. .) In or about 1997, the Gardners sought to locate a lender to provide the funds necessary to complete the purchase of the remaining parcels of the Assemblage and to finance certain pre-sale requirements; one of these lenders was the defendant, GMAC.
One other lender from whom the plaintiffs sought to obtain loan financing was the First Connecticut Consulting Group ("First Connecticut"), and on or about May 28, 1997, First Connecticut issued a written commitment letter to lend the plaintiffs $7.5 million for, among other things, The Mark Andrew. .) Ultimately, First Connecticut did not fund the loan, and the plaintiffs subsequently filed suit in the District of Connecticut against First Connecticut and certain related individuals for failure to fund the loan and they sought damages totaling in excess of $50 million. .) As against the defendant First Connecticut, the action is still pending in the Bankruptcy Court for the District of Connecticut. .)
By April, 1999, the Gardners were out of capital, and were in default in payment of many of the mortgages on the properties in the Assemblage. .) Given these circumstances, and the fact that the plaintiffs were seeking to finance a care facility that was traditionally considered a high risk project, the defendant contend that the Gardners were aware that it would be difficult to obtain financing for the construction of The Mark Andrew. Dr. Gardner testified in his deposition that he was aware that banks traditionally do not fund projects intended to be nursing home facilities, because those projects do not tend to fit within banks' conventional lending profiles. (Dep. of Robert Gardner dated Aug. 3, 2001 attached as exh. 7 to decl. of Steven Rand dated Dec. 9, 2002 ("Rand II Decl.") at ¶ 20.) The plaintiffs contend that the Gardners were confident that after obtaining interim financing, the Gardners would be able to sell units in the Mark Andrew and to obtain additional financing to complete the project. ...
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