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Branch Banking and Trust Co. v. Hammer

United States District Court, D. Nevada

March 29, 2017

BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Plaintiff,
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,
BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Counter-defendant.




         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.


         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.)


         “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 ...

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