United States District Court, M.D. Florida
MEMORANDUM AND ORDER
A. Magnuson United States District Court Judge
matter is before the Court on Plaintiff's Motion for
Summary Judgment. For the following reasons, the Motion is
granted in part and denied in part.
in 2005, Defendant Legal Outsource, P.A., had a revolving
line of credit of $450, 000 with Plaintiff Regions Bank,
renewed on a yearly or semi-yearly basis. The loan agreement
was Dated: May 30, 2013, by Legal Outsource and guaranteed by
Defendant Charles Paul-Thomas Phoenix, who is also acting as
counsel for all Defendants here. (Compl. Exs. A, B, D.) The
2013 loan matured in February 2014, and Legal Outsource did
not pay it. On April 4, 2014, Regions demanded full payment
under the loan. (Id. Ex. E.)
2011, Regions lent nearly $1.7 million to Periwinkle Partners
LLC, for the purchase of a shopping center on Sanibel Island.
(Id. Exs. F-O.) At the time of the loan transaction,
the sole member of Periwinkle Partners was a company owned by
Charles Phoenix's wife, Lisa Phoenix, called the AT
Phoenix Company. Charles Phoenix signed the promissory note
as manager of Periwinkle. (Id. Ex. F.) Charles
Phoenix, Lisa Phoenix, and Legal Outsource all provided
guaranties for the Periwinkle loan. (Id. Ex. M-O.)
the terms of the Periwinkle loan, a default of any other loan
between the parties constituted an event of default under the
Periwinkle loan. (Id. Ex. F.) After the Legal
Outsource loan default, Regions declared a default of the
Periwinkle loan and sought to accelerate that loan and for
full payment of the loan balance. Several months later,
Regions amended its default claims for the Periwinkle loan to
include as events of default that the AT Phoenix Company
transferred its interest in Periwinkle to a third party (1st
Am. Answer Ex. 11), and that Periwinkle had failed to pay ad
valorem taxes in 2013 (id. Ex. 12).
claim that Regions decided it wanted the shopping center as
collateral for the Legal Outsource line of credit, and began
demanding unreasonable documentation from Defendants in 2013.
They contend that the Legal Outsource credit line had been
renewed yearly since 2005 with no issues, and thus that the
“default” in 2014 was a manufactured default to
attempt to force Defendants to collateralize the shopping
center. Defendants do not contend, however, that they are not
in default under the Legal Outsource loan, and cannot dispute
that this default constitutes an event of default under the
Periwinkle loan as well.
Complaint contains six counts. Count I claims breach of the
Legal Outsource note, Count II claims a breach of the
guaranties for the Legal Outsource loan, Count III claims
breach of the Periwinkle note, Count IV claims a breach of
the guaranties for the Periwinkle loan, Count V seeks a
foreclosure of the Periwinkle property, and Count VI seeks a
answered the Complaint and interposed numerous counterclaims.
As relevant to Regions's Motion, Counterclaims 1, 3, 4,
and 5 assert breach-of-contract, constructive fraud, breach
of good faith and fair dealing, and breach of fiduciary duty
on behalf of Periwinkle. Counterclaim 6 contends that Charles
Phoenix's signature on the Legal Outsource loan guaranty
is a forgery, and Counterclaim 7 claims constructive fraud on
behalf of Charles Phoenix. Finally, Counterclaim 11 raises a
claim for violation of the Equal Credit Opportunity Act on
behalf of Periwinkle Partners and Lisa Phoenix.
27, 2016, the Hon. John E. Steele bifurcated the forgery
counterclaim (Counterclaim Count VI) from the remaining
claims at issue and determined that a jury trial is available
only as to the forgery counterclaim. (Docket No. 278.)
judgment is proper only if there are no disputed issues of
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986). The Court must
view the evidence and the inferences that may be reasonably
drawn from the evidence in the light most favorable to the
nonmoving party. Burton v. City of Belle Glade, 178
F.3d 1175, 1187 (11th Cir. 1999).
moving party bears the burden of showing that there is no
genuine issue of material fact and that it is entitled to
judgment as a matter of law. O'Ferrell v. United
States, 253 F.3d 1257, 1265 (11th Cir. 2001). When
opposing a motion for summary judgment, the nonmoving party
must demonstrate the existence of specific facts in the
record that create a genuine issue for trial. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A party
opposing a properly supported motion for summary judgment may
not rest on mere allegations or denials and must do more than
simply show that there is some metaphysical doubt as to the
material facts. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986).
appear to be confused about the proper standard of review for
summary judgment motions. Defendants insist repeatedly that
Regions cannot rely on any fact other than what is pled in
the Complaint. (E.g., Defs.' Opp'n Mem.
(Docket No. 350) at 28 (“The Court should disregard
‘supposedly new factual support and look only to the
factual allegations in the complaint' subject to the
summary judgment motion.” (quoting Samuels v.
Wilder, 871 F.2d 1346 (7th Cir. 1989)).) But the case on
which Defendants rely involved allegations of fraud, which
must be pled with particularity under Rule 9(b). And indeed,
in Samuels, the new factual allegations were
unrelated to the fraud claim as pled, leading the court to
describe the plaintiff's conduct as an “attempted