Resolution Trust Corp. v. Sharif-Munir-Davidson Development Corp.
Citation | 992 F.2d 1398 |
Decision Date | 14 June 1993 |
Docket Number | No. 91-7304,SHARIF-MUNIR-DAVIDSON,91-7304 |
Parties | RESOLUTION TRUST CORPORATION, as Receiver for Southwest Federal Savings Association, Plaintiff-Appellee, v.DEVELOPMENT CORPORATION, et al., Defendants,DEVELOPMENT CORPORATION, Ramsey M. Munir and the Estate of Louay E. Sharif, Defendants-Counter Plaintiffs-Appellants, RESOLUTION TRUST CORPORATION, as Receiver for Southwest Savings Association, Intervening Counter Defendant-Appellee. |
Court | U.S. Court of Appeals — Fifth Circuit |
E.P. Keiffer, Burke & Wright, Dallas, TX, for defendants.
Robert W. Dupuy, Brown McCarroll & Oaks Hartline, Dallas, TX, Jeffrey Ehrlich, RTC, Washington, DC, for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before GOLDBERG, SMITH, and EMILIO M. GARZA, Circuit Judges.
On October 29, 1985, SMD and Southwest entered into a loan agreement. That same day, defendants Sharif and Munir entered into a guaranty agreement securing the note, and executed a deed of trust giving Southwest a security interest in an office building owned by defendants. In addition, defendants executed an "Assignment of Leases and Rents" and an "Equity Participation Agreement," giving the Bank certain additional rights with respect to the office building securing the note.
SMD defaulted on the note in 1987. Southwest notified SMD that SMD was in default, but SMD failed to cure. When Southwest foreclosed on the office building, it was unable to collect the full amount owing on the note. In July, 1988, Southwest filed suit against defendants in state court to collect the deficiency.
After Southwest sued defendants, Southwest was placed by the FDIC into RTC conservatorship, and then into RTC receivership. Substantially all of Southwest's assets (including the note and guaranty at issue in this case) were transferred to RTC by way of a purchase and assumption transaction. RTC then intervened in the pending state court action by Southwest against defendants, and removed the case to federal court on June 15, 1990. Defendants counterclaimed and asserted various affirmative defenses, including failure of consideration and breach of a profit sharing agreement.
Southwest and RTC (hereinafter "Southwest/RTC" or "plaintiff") filed a motion for summary judgment on May 3, 1991. Local rules in the United States District Court for the Northern District of Texas specify that a response to a motion for summary judgment is due within twenty days of its filing, which would have been May 23, 1991. However, defendants did not file their response to the motion for summary judgment until August 2, 1991.
On May 22, 1991, several defendants moved to have their current counsel withdraw and to substitute new counsel. That motion was granted on May 23, 1991, the same day on which the local rules specified that a response to plaintiff's motion for summary judgment was due.
On May 24, 1991, both parties requested extension of the discovery deadline from June 3, 1991, to August 2, 1991, agreeing that the extension of discovery was not interposed for delay, but for the purpose of enabling defendants' new counsel to become "acclimated" to the case and to timely institute and complete discovery. On May 29, 1991, the court entered an order extending the deadlines for discovery and for filing of a "trial length estimate" until August 2, 1991.
On June 18, 1991 and again on July 8, 1991, several defendants moved to have their counsel withdraw and to substitute new counsel. These motions were granted on June 27, 1991, and July 8, 1991, respectively.
On July 22, 1991, the defendants made a motion for leave to file an amended answer to the complaint. On July 24, 1991, both parties moved for a second extension of the discovery deadline (from August 2, 1991, to September 17, 1991). That same day, the court entered an opinion and order denying defendants leave to amend their answer to plaintiff's complaint, and granting plaintiff's motion for summary judgment. The discovery deadline set by the court in its order of May 29, 1991, was still nine days away. No hearing date had ever been scheduled on the summary judgment motion, and no defendant had filed any response to that motion. The district court stated that the summary judgment motion had been ripe for consideration since May 23, 1991. The court did not mention its May 29, 1991, order extending discovery until August 2, 1991, nor did the court mention any of its orders after May 23, 1991, granting defendants' counsel leave to withdraw and to substitute new counsel.
On July 29, 1991, defendants moved for reconsideration of the order granting summary judgment for plaintiff. On August 2, 1991, the date which the parties had chosen and the court had approved as the deadline for completion of discovery, the defendants submitted a response to plaintiff's motion for summary judgment, which included the arguments that defendants had sought to make in their amended answer, as well as affidavits meant to support the argument that Southwest had violated its alleged "bilateral obligations" under one of the loan agreements.
The motion for reconsideration of summary judgment was denied on November 11, 1991. On December 2, 1991, appellants filed this appeal. At the heart of this appeal is whether certain defenses to enforcement of the guaranty agreement were timely made or would have been effective.
Our review of the district court's decision to preclude further discovery before granting summary judgment is limited to whether the district court abused its discretion. 2 See, e.g., Solo Serve Corp. v. Westowne Assoc., 929 F.2d 160, 167 (5th Cir.1991); Carriere v. Sears, Roebuck & Co., 893 F.2d 98, 102 (5th Cir.), cert. denied, 498 U.S. 817, 111 S.Ct. 60, 112 L.Ed.2d 35 (1990); Fontenot v. Upjohn Co., 780 F.2d 1190, 1193 (5th Cir.1986). If it reasonably appears that further discovery would not produce evidence creating a genuine issue of material fact, the district court's preclusion of further discovery prior to entering summary judgment is not an abuse of discretion. See, e.g., Netto v. Amtrak, 863 F.2d 1210, 1216 (5th Cir.1989) (citing Paul Kadair, Inc. v. Sony Corp. of America, 694 F.2d 1017, 1029-30 (5th Cir.1983)); International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1267 (5th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 936, 117 L.Ed.2d 107 (1992); Solo Serve, 929 F.2d at 167; Washington v. Allstate Ins. Co., 901 F.2d 1281, 1285 (5th Cir.1990).
We review the grant of summary judgment itself de novo, including the question whether the court provided the notice required by Fed.R.Civ.P. 56. See, e.g., International Shortstop, 939 F.2d at 1263; Ackerman v. Federal Deposit Ins. Corp., 973 F.2d 1221, 1223 (5th Cir.1992); Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1444 (1993). Summary judgment is appropriate if "[t]he pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, ... demonstrate there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Ayo v. Johns-Manville Sales Corp., 771 F.2d 902, 904 (5th Cir.1985). A "material" fact is one that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In performing our analysis we look at the evidence in the light most favorable to the nonmoving party. See, e.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986). If no rational trier of fact could possibly find for the nonmoving party, then summary judgment is proper. Id.
Defendants did not make a written or oral statement to the court specifying why they could not complete discovery by the date on which the local rules specified that their response to plaintiff's summary judgment motion was due, and how further discovery would enable defendants to oppose plaintiff's summary judgment motion. See International Shortstop, 939 F.2d at 1266-67. However, defendants contend that it was reasonable for them to rely on the court's extension of the deadline for...
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