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Lsref2 Baron, LLC v. Beemer & Associates Xlvii

December 29, 2011



Regions Bank ("Regions") filed suit against Beemer & Associates XLVII, L.L.C. ("Beemer") to collect on a promissory note and against Mike Ashourian as guarantor.*fn1 This case is before the Court on Plaintiff's Amended Motion for Final Summary Judgment (Doc. 19), to which defendants have responded (Doc. 47.) The Court held oral argument on the motion for summary judgment on September 26, 2011, the transcript of which is incorporated by reference. (Doc. 57.) The Court also considers defendants' Motion to Compel Discovery (Doc. 59), plaintiff's Motion to Substitute Party Plaintiff (Doc. 63), and defendants' motions to strike (Docs. 66, 76, 81).


This dispute arises from a series of agreements between the parties relating to a loan for the construction of improvements to certain real property. Regions and Beemer first entered into an ISDA Master Agreement (the "Swap Agreement"), which, among other things, provided terms applicable to all future transactions between the parties. Doc. 1 at 6-26. Regions and Beemer then entered into a Construction Loan, wherein Regions agreed to lend a maximum principal amount of $5,250,000 to Beemer. Doc. 19-2. The Construction Loan was evidenced by a promissory note (the "Note"), which Beemer executed and delivered to Regions, in the same amount. Doc. 1 at 29-36. Ashourian executed and delivered a guaranty to Regions (the "Guaranty"), which guaranteed Beemer's performance under the Construction Loan and the Note. Doc. 1 at 40-46.

On June 2, 2010, Regions sent a letter to Ashourian and Beemer stating that Beemer had defaulted on the Note by failing to make any monthly payments since May 1, 2010. In the letter, Regions also demanded full and immediate payment on the Note and listed the amounts that Beemer was obligated to pay. Doc. 1 at 38-39.

On June 16, 2010, Regions sent a letter to Ashourian and Beemer which stated that Beemer was in default of it obligations under the Swap Agreement. The letter further notified Beemer that all transactions under the Swap Agreement would be terminated on June 21, 2010. The letter also states: "Pursuant to the [Swap] Agreement, we will provide to you on or as soon as reasonably practicable after the Early Termination Date a statement of any amounts that may be due to Regions . . . and the details of the account to which such amounts may be paid." Doc. 1 at 37. However, Regions has not provided defendants with such a statement. Doc. 46 at 5.

Regions filed suit against Beemer to recover under the Note and against Ashourian to recover under the Guaranty. In the Complaint, Regions claims damages of $5,961,720.52, consisting of "the principal balance in the amount of $5,250,000.00, plus accrued but unpaid interest in the amount of $23,149.16, late fees of $850.62 through June 22, 2010 and the Swap Agreement Termination Fee of $687,720.74." Doc. 1 at 3. Regions also seeks interest and late fees accruing after June 22, 2010, court costs, and attorneys' fees. Id. After filing suit, Regions assigned all of its rights, title, and interest in the Beemer loan to LSREF2 Baron, LLC ("LSREF2"), (see Doc. 53-A), and the Court thus substituted LSREF2 as the party plaintiff in this case (Doc. 54).

The Court held a hearing on pending motions on September 27, 2011. Doc. 57. At the hearing, defendants argued that LSREF2 had presented insufficient evidence of the transfer of the Note, that LSREF2 had not explained how it had arrived at its monetary calculations under the Swap Agreement, and that defendants should not be required to repay the Note at this time due to commercial impracticability. Because Beemer had not properly raised these issues prior to the hearing, the Court ordered additional briefing. Doc. 58. After the hearing, LSREF2 assigned its interest in the Note to Wells Fargo Bank, N.A. ("Wells Fargo") and now seeks to substitute Wells Fargo as party plaintiff in this case. Doc. 63.


Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). "The burden of demonstrating the satisfaction of this standard lies with the movant." Branche v. Airtran Airways, 342 F.3d 1248, 1252-53 (11th Cir. 2003). In determining whether summary judgment is appropriate, a court must draw inferences from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. Centurion Air Cargo, Inc. v. United Parcel Serv. Co., 420 F.3d 1146, 1149 (11th Cir. 2005).


Plaintiff claims it is entitled to summary judgment because the undisputed facts show that the Note is in default and that this default allows it to enforce the terms of the Note and Guaranty. (Doc. 19 at 4.) In its response to plaintiff's motion for summary judgment, defendants do not assert that they are in compliance with their obligations under the Note or Guaranty. (See Doc. 47.)*fn2 Instead, they assert that, even though they are in default under the Note and Guaranty, they nevertheless have no legal obligation to pay at this time.

Defendants first assert that plaintiff cannot recover in this action because it has not complied with its obligations under Section 6(d)(i) of the Swap Agreement, which states:

On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (l) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid.

Doc. 1 at 12. Defendants claim that Regions' failure to provide such a statement following termination of the Swap Agreement on June 21, 2010, "represents a failure of a condition precedent to ...

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