United States District Court, D. Nevada
BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Plaintiff,
v.
JAMES D. HAMMER, an individual; BIG INVESTORS, LLC, a Nevada limited liability corporation; and DOES 1 through 10, inclusive, Defendants. JAMES D. HAMMER, an individual, Counter-claimant,
v.
BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Counter-defendant.
ORDER (PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT -
ECF NO. 20; COUNTER-CLAIMANT'S MOTION FOR PARTIAL SUMMARY
JUDGMENT - ECF NO. 21)
MIRANDA M. DU UNITED STATES DISTRICT JUDGE.
I.
INTRODUCTION
This
case stems from the relationship between a lender, a
borrower, the Federal Deposit Insurance Corporation
(“FDIC”), and an assuming bank. Before the Court
are cross motions for summary judgment from
Plaintiff/Counter-defendant Branch Banking & Trust
Company (“BB&T”) (ECF No. 20) and
Defendant/Counter-claimant James Hammer
(“Hammer”) and Big Investors, LLC (“Big
Investors”) (ECF No. 21.) The Court has also reviewed
each side's respective responses (ECF Nos. 22, 24) and
replies (ECF Nos. 23, 25). Several months after the cross
motions were fully briefed, Hammer and Big Investors filed a
supplement (without seeking leave of court pursuant to LR
7-2(g)) based on a change in the material facts underlying
their Partial Motion for Summary Judgment - namely a change
in the relationship between BB&T and the FDIC. (ECF No.
26.) BB&T filed a response to the supplement. (ECF No.
31.)
For the
reasons discussed below, BB&T's Motion is granted in
part and denied in part, and Hammer and Big Investors'
Motion is granted in part and denied in part.
II.
BACKGROUND
In
2007, Colonial Bank lent Hammer $2, 000, 000 in exchange for
a promissory note (“the Hammer Loan”). (ECF No.
20-3 at 5-6.) In 2008, Hammer and Colonial Bank agreed upon
certain changes including a later maturity date and a
reduction of the principal to $1, 500, 000 (“the
Amended Note”). (ECF No. 20-3 at 12-14.) On July 3,
2009, ten days before the loan was to mature, Colonial Bank
sent Hammer a notice listing the maturity date, principal due
($1, 464, 383.29), and interest due ($6, 711.75). (ECF No.
20-3 at 23.) When the loan became due, Hammer did not pay.
On
August 14, 2009, Colonial Bank folded and appointed the FDIC
as receiver. The FDIC and BB&T entered into a
purchase-and-assumption agreement wherein BB&T assumed a
significant portion of Colonial Bank's assets - including
the Amended Note and other related debts. (ECF No. 20-2 at
2-3.) BB&T was acting as what the parties refer to as an
assuming bank. (Id. at 48.) The
purchase-and-assumption agreement included a provision for
sharing losses, which meant that the FDIC would compensate
BB&T for up to 80% of the losses on Colonial Bank's
assets. (Id. at 33.) The agreement also obligated
BB&T to use its best efforts to collect.
In 2010
and 2011, Hammer and his business partner, James Meservey,
approached BB&T several times about settling a number of
their debts. They often dealt with Rich Yach
(“Yach”), who was a problem loan administrator at
BB&T. (ECF No. 26-1 at 99.) Yach, who had previously
worked for Colonial Bank, introduced himself to Hammer and
Merservey as a BB&T representative who was authorized to
discuss their various loans. (ECF No. 21-1 at 22.) Hammer and
Merservey proposed different plans for dealing with their
debts, including resolving all of Hammer's Colonial Bank
loans as part of one global resolution. (Id.)
According to Hammer, sometime in June 2012 he and Meservey
met with Yach. At that meeting Yach told Hammer and Merservey
that he had not gotten a defeasance they had requested,
“but the good news is that I did get the unsecured
loans written off.” (Id.) Hammer understood
Yach's statements to mean that BB&T had released them
from the debt associated with the Hammer Loan. Yach denies
that he made any remarks indicating that Hammer was no longer
responsible for the debt. (ECF No. 20 at 9.) Yach also
maintains that a decision to relieve the debt would have
required the approval of multiple BB&T employees and a
written change to the Amended Note. (Id.) Hammer
alleges that Yach's statements affected his decision
about how to resolve other loans with BB&T. (ECF No. 14
at 4.)
On
March 27, 2015, BB&T filed the Complaint against Hammer
and Big Investors in this action, alleging causes of action
for (1) civil conspiracy, (2) breach of the Amended Note, (3)
breach of the covenant of good faith and fair dealing, and
(4) unjust enrichment. (ECF No. 1.) Hammer answered and
asserted counterclaims including (1) breach of the express
and implied terms of the Amended Note, (2) intentional and/or
negligent misrepresentation, and (3) promissory estoppel.
(ECF No. 14.)
On
September 14, 2016, BB&T and the FDIC agreed to terminate
the shared-loss program. BB&T paid the FDIC $230, 288,
961 for the remaining assets. (ECF No. 26-1 at 12-19.)
BB&T
now moves for summary judgment on several issues. First,
BB&T asks the Court to determine, as a matter of law,
that it has established Hammer is liable for breach of the
Amended Note. Next, BB&T seeks summary judgment for each
of Hammer's counterclaims, and lastly for a determination
that the amount Hammer owes BB&T totals $2, 003, 456.88
plus interest in the amount of $220.66 per day for every day
after March 21, 2016. (ECF No. 20 at 19.)
Hammer
cross moves for summary judgment on three issues. First,
Hammer argues that equity demands that any judgment against
him must be limited by the amount the FDIC paid BB&T for
Hammer's Loan as part of the final agreement. Second,
Hammer seeks dismissal of all claims against Big Investors.
And finally, Hammer argues that BB&T has not produced any
evidence to support its civil conspiracy claims. (ECF No. 21
at 2-3.)
III.
LEGAL STANDARD
“The
purpose of summary judgment is to avoid unnecessary trials
when there is no dispute as to the facts before the
court.” Nw. Motorcycle Ass'n v. U.S. Dep't
of Agric., 18 F.3d 1468, 1471 (9th Cir.1994). Summary
judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show there is no
genuine issue as to any material fact and that the movant is
entitled to judgment as a matter of law.” See
Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986)
(citing Fed.R.Civ.P. 56(c)). An issue is
“genuine” if there is a sufficient evidentiary
basis on which a reasonable fact-finder could find for the
nonmoving party and a dispute is “material” if it
could affect the outcome of the suit under the governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-49 (1986). Where reasonable minds could differ on the
material facts at issue, however, summary judgment is not
appropriate. Warren v. City of Carlsbad, 58 F.3d
439, 441 (9th Cir. 1995). In evaluating a summary judgment
motion, a court views all facts and draws all inferences in
the light most favorable to the nonmoving party. Kaiser
Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d
1100, 1103 (9th Cir. 1986).
The
moving party bears the burden of informing the court of the
basis for its motion, together with evidence demonstrating
the absence of any genuine issue of material fact.
Celotex, 477 U.S. at 323. Once the moving party
satisfies Rule 56's requirements, the burden shifts to
the party resisting the motion to “set forth specific
facts showing that there is a genuine issue for trial.”
Anderson, 477 U.S. at 256. The nonmoving party
“may not rely on denials in the pleadings but must
produce specific evidence, through affidavits or admissible
discovery material, to show that the dispute exists, ”
Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th
Cir. 1991), and “must do more than simply show that
there is some metaphysical doubt as to the material
facts.” Bank of Am. v. Orr, 285 F.3d 764, 783
(9th Cir. 2002) (internal citations omitted). “The mere
existence of a scintilla of evidence in support of the
plaintiff's position will be insufficient.”
Anderson, 477 U.S. at 252. Although the parties may
submit evidence in an inadmissible form, only evidence which
might be admissible at trial may be considered by a trial
court in ruling on a motion for summary judgment.
Fed.R.Civ.P. 56(c).
A.
Plaintiff's Motion for Summary Judgment
BB&T
asks the Court to grant summary judgment (1) on Hammer's
liability for BB&T's claim for breach of the Amended
Note, (2) against Hammer's counterclaims, and (3) on
BB&T's entitlement to $2, 003, 456.88 under the note
plus any interest accrued after March 21, 2016. In evaluating
BB&T's Motion, the Court resolves questions of fact
in favor of Hammer. Specifically, the Court considers
BB&T's Motion under the assumption that Yach
represented to Hammer that his loan had been “written
off” and that representation affected Hammer's
decisions about his remaining debts with BB&T.
BB&T's main arguments are, first, even accepting
Hammer's allegations as true, it was unreasonable for him
to rely on an oral waiver of liability when so much money was
at ...