United States District Court, S.D. Indiana, Indianapolis Division
HON. JANE MAGNUS-STINSON, JUDGE UNITED STATES DISTRICT COURT.
Plaintiff Anton Realty, LLC and Andy Mohr Truck Center, Inc. (collectively, “Anton Realty”) bring this suit against Defendants Guardian Brokers Ltd., Inc. (“Guardian Brokers”) and National Bank of Commerce, NA, asserting several claims under Indiana law. Guardian Brokers asserts state-law counter claims against Anton Realty. The parties’ claims all revolve around a dispute regarding the ownership of real property located at 1301 South Holt Road, Indianapolis, IN (the “Property”) and Guardian Brokers’ entrance onto the Property following the ownership dispute.
Presently pending before the Court are Guardian Brokers’ and Anton Realty’s cross motions for summary judgment. For the reasons explained, Guardian Brokers’ Motion for Summary Judgment is GRANTED, [Filing No. 106], and Anton Realty’s Cross Motion for Summary Judgment is DENIED, [Filing No. 133]. Because the parties’ briefs adequately framed the issues, oral argument was unnecessary to resolve these motions, Anton Realty’s Motion for Oral Argument is therefore DENIED. [Filing No. 141.]
Standard of Review
A motion for summary judgment asks the Court to find that a trial is unnecessary because there is no genuine dispute as to any material fact and, instead, the movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). As the current version of Rule 56 makes clear, whether a party asserts that a fact is undisputed or genuinely disputed, the party must support the asserted fact by citing to particular parts of the record, including depositions, documents, or affidavits. Fed.R.Civ.P. 56(c)(1)(A). A party can also support a fact by showing that the materials cited do not establish the absence or presence of a genuine dispute or that the adverse party cannot produce admissible evidence to support the fact. Fed.R.Civ.P. 56(c)(1)(B). Affidavits or declarations must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on matters stated. Fed.R.Civ.P. 56(c)(4). Failure to properly support a fact in opposition to a movant’s factual assertion can result in the movant’s fact being considered undisputed, and potentially in the grant of summary judgment. Fed.R.Civ.P. 56(e).
In deciding a motion for summary judgment, the Court need only consider disputed facts that are material to the decision. A disputed fact is material if it might affect the outcome of the suit under the governing law. Hampton v. Ford Motor Co., 561 F.3d 709, 713 (7th Cir. 2009). In other words, while there may be facts that are in dispute, summary judgment is appropriate if those facts are not outcome determinative. Harper v. Vigilant Ins. Co., 433 F.3d 521, 525 (7th Cir. 2005). Fact disputes that are irrelevant to the legal question will not be considered. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed. 202 (1986).
On summary judgment, a party must show the Court what evidence it has that would convince a trier of fact to accept its version of the events. Johnson v. Cambridge Indus., 325 F.3d 892, 901 (7th Cir. 2003). The moving party is entitled to summary judgment if no reasonable fact-finder could return a verdict for the non-moving party. Nelson v. Miller, 570 F.3d 868, 875 (7th Cir. 2009). The Court views the record in the light most favorable to the non-moving party and draws all reasonable inferences in that party’s favor. Darst v. Interstate Brands Corp., 512 F.3d 903, 907 (7th Cir. 2008). It cannot weigh evidence or make credibility determinations on summary judgment because those tasks are left to the fact-finder. O’Leary v. Accretive Health, Inc., 657 F.3d 625, 630 (7th Cir. 2011). The Court need only consider the cited materials, Fed.R.Civ.P. 56(c)(3), and the Seventh Circuit Court of Appeals has “repeatedly assured the district courts that they are not required to scour every inch of the record for evidence that is potentially relevant to the summary judgment motion before them, ” Johnson, 325 F.3d at 898. Any doubt as to the existence of a genuine issue for trial is resolved against the moving party. Ponsetti v. GE Pension Plan, 614 F.3d 684, 691 (7th Cir. 2010).
“The existence of cross-motions for summary judgment does not, however, imply that there are no genuine issues of material fact.” R.J. Corman Derailment Servs., LLC v. Int’l Union of Operating Engineers, 335 F.3d 643, 647 (7th Cir. 2003). Specifically, “[p]arties have different burdens of proof with respect to particular facts; different legal theories will have an effect on which facts are material; and the process of taking the facts in the light most favorable to the non- movant, first for one side and then for the other, may highlight the point that neither side has enough to prevail without a trial.” Id. at 648.
The following factual background is drawn from the undisputed evidence submitted by the parties unless otherwise noted.
A. The Property Dispute
This action revolves around the disputed ownership of the Property. M-3 Investments, LLC (“M-3”)-whose only member is Mark Smith-purchased the Property through a loan from Fifth Third Bank (“Fifth Third”), signed a note to Fifth Third to repay the loan, and granted Fifth Third a mortgage on the Property (collectively, the Court will refer to the note and mortgage on the Property as the “Notes”). [Filing No. 57-2 at 1; Filing No. 135-37 at 2.]
In March 2010, Andy Mohr Automotive Group, Inc. (“Andy Mohr Automotive Group”) leased the Property from M-3. [Filing No. 135-40 at 1.] Andy Mohr Automotive Group subsequently assigned the lease to Plaintiff Andy Mohr Truck Center (the “Truck Center”), which operates a Volvo semi-truck dealership on the property. [Filing No. 135-40 at 1.]
In May 2010, M-3 entered into a settlement agreement (the “Settlement Agreement”) with Fifth Third regarding the loan and mortgage on the Property. [Filing No. 57-2 at 1; Filing No. 57-2 at 6-9.] The Settlement Agreement provided debt forgiveness for M-3 in excess of $3.2 million, required M-3 to “execute and deliver a deed in lieu of foreclosure if requested by [Fifth Third], ” and assigned all lease payments from the Property to Fifth Third. [Filing No. 57-2 at 6-7.]
Guardian Brokers is a property management company based in Alabama owned in part by Keith Sharp. [Filing No. 135-36 at 2.] On July 15, 2013, Guardian Brokers entered into a Loan Purchase and Assumption Agreement (the “Loan Purchase Agreement”) with Fifth Third. [Filing No. 57-1 at 2; Filing No. 135-7.] Pursuant to the Loan Purchase Agreement, Guardian Brokers agreed to pay Fifth Third $700, 000 in exchange for Fifth Third’s rights in the Notes with M-3 regarding the Property. [Filing No. 135-7.] Guardian Brokers, as part of the Loan Purchase Agreement, agreed to “fully and timely pay, perform, and discharge when due, all of the liabilities of [Fifth Third] arising in respect of the Loan.” [Filing No. 135-7 at 3.]
Anton Realty is a limited liability based in Indiana, and its sole member is Andy Mohr. [Filing No. 24 at 1.] In late August and early September of 2013, Andy Mohr, who knew of Guardian Brokers’ intent to purchase the Notes from Fifth Third, explored purchasing the Property from M-3. [Filing No. 57-4 at 11-12.] Mr. Mohr had informed Mr. Smith that he was buying the Property but Guardian Brokers had also stated that it bought the property, so, on September 5, 2013, Mr. Smith emailed Mark Beeghley of Fifth Third requesting an update on the legal status of the Property. [Filing No. 135-11 at 1-2.] Mr. Beeghley responded that he was not aware of Mr. Mohr buying the property, and that Fifth Third’s purchase contract was with Guardian Brokers. [Filing No. 135-11 at 1.] On September 6, 2013, Mr. Beeghley emailed Mr. Smith again, stating as follows:
In thinking about this a little longer, Andy Mohr could buy the property from you. As long as the funds were sufficient to pay us off that would trump our contract. The reason it would trump our [Loan Purchase Agreement with Guardian Brokers] is that [it] is a note sale. We are selling our note. If he purchases the real estate from you, our note ceases to exist. Therefore, no note sale can happen. Now the problem is timing. Our note sale [with Guardian Brokers] is due to close next Friday, [September] 13th.
[Filing No. 135-11 at 1.]
On September 8, 2013, Mr. Mohr contacted Mr. Smith and asked him for the payoff amount because he intended to pay off the mortgage and buy the Property. [Filing No. 135-37 at 7.] That same day, Mr. Mohr sent a purchase agreement (the “Purchase Agreement”) and other closing documents to Mr. Smith. [Filing No. 135-13.] Mr. Smith emailed the documents to his attorney on September 9, 2013, with the following message:
Check this out. I still own the [Property]. The dealership property. As part of my settlement with [Fifth Third] I agreed to hold onto it and sell it. Andy Mohr is the tenant. [Fifth Third] has an [agreement] to sell the note to [Guardian Brokers]. Andy is concerned he will get tossed or at a minimum pay significantly higher rent. So, he wants to sort [of] back door [Guardian Brokers] and pay off the not[e]. [Fifth Third] bank is OK with this because it gets them more than the note was being sold under the [agreement]. I want no risk whatsoever. I do not have to do this. Please make changes to [the documents] so I am free and clear no matter what happens.
[Filing No. 135-13 at 1.] Mr. Smith’s attorney responded that the documents are “okay, ” but that Mr. Smith should seek a representation and warranty from Fifth Third that it “owns the note and mortgage and has not entered into agreement to sell or transfer the note and mortgage to any third party.” [Filing No. 135-13 at 1.]
Fifth Third sent Mr. Smith the payoff letter (the “Payoff Letter”) on September 9, 2013. [Filing No. 135-28; Filing No. 135-29.] The Payoff Letter, in relevant part, stated as follows: “Fifth Third Bank will issue appropriate release of mortgage as it relates to the [Property] upon receipt of . . . $765, 443.99. . . . This payoff letter is valid until September 12, 2013.” [Filing No. 135-29 at 2.] Mr. Sharp became aware of the Payoff Letter the date it was issued. [Filing No. 135-36 at 4.] Although Mr. Sharp originally planned on concluding his transaction with Fifth Third pursuant to the Loan Purchase Agreement on September 16, 2013, once he became aware of the Payoff Letter, he thought Fifth Third was trying to circumvent the Loan Purchase Agreement and thus sought to conclude the transaction earlier. [Filing No. 135-36 at 4-5.]
On September 10, 2013, Guardian Brokers wired the balance owed under the Loan Purchase Agreement to Fifth Third. [Filing No. 57-1 at 2.] After wiring the money to Fifth Third, Mr. Sharp emailed Mr. Smith, stating that Guardian Brokers is “the new owner of the note” and that he is ready for Mr. Smith “to sign the deed for a total release of the note.” [Filing No. 57-1 at 47.] Mr. Smith forwarded the email to Mr. Beeghley, asking “[w]hat in the heck is going on here?” [Filing No. 135-16 at 1.] However, Mr. Smith did not receive a response. [Filing No. 57-2 at 3.]
At 6:25 a.m. on September 11, 2013, Mr. Smith sent a longer email to Mr. Beeghley, stating as follows:
It appears that Mr. Sharp has no idea what is going on here. He appears to believe that he already owns the note. How can we close on the property at noon ...