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CityPlace Retail, LLC v. Wells Fargo Bank, N.A.

United States District Court, S.D. Florida

August 7, 2019

CITYPLACE RETAIL, LLC, Plaintiff,
v.
WELLS FARGO BANK, N.A., AS TRUSTEE FOR THE REGISTERED HOLDERS OF CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., COMMERCIAL MORTGAGE SECURITIES CORP., COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-C1, Defendant.

          ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION FOR SANCTIONS

          ROBIN L. ROSENBERG UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiff's Motion for Summary Judgment [DE 88]. The Motion has been fully briefed. For the reasons set forth below, the Motion is denied.

         I. BACKGROUND[1]

         This action concerns certain real property located in West Palm Beach, Florida, known as CityPlace, which is also the name of the Plaintiff in this case. DE 89 at 2. In 2011, CityPlace entered into a security modification agreement with its mortgage holder and, in connection with that agreement, a company known as Berkadia Commercial Mortgage became the servicer of the mortgage. Id. Also in connection with the agreement, the Defendant in this case, Wells Fargo, became the trustee for the mortgage holder. Id. The 2011 modification agreement is important to this case; the Court refers to the modification agreement as the “Agreement.” See id.

         The Agreement had a fixed maturity date of December 11, 2018. Id. As the date for maturity drew near, CityPlace began the process (in September) of refinancing its loan through a new lender. See Id. at 3. Refinancing required an appraisal, and the Agreement contained a detailed appraisal process for CityPlace and Wells Fargo to follow, which included the use of multiple appraisers to value the CityPlace property. See Id. at 2-3. Wells Fargo, by virtue of its selection of Berkadia as servicer, delegated its appraisal responsibilities under the Agreement to Berkadia. See Id. The parties disagree over whether Berkadia complied with its responsibilities under the Agreement-over whether Berkadia followed the refinancing appraisal process in the Agreement. Id. at 2-5.

         The refinancing appraisal process in the Agreement is the central issue in dispute in this case. The appraisal process was necessary to determine the payoff amount that CityPlace had to pay to Wells Fargo. DE 1-2 at 6. Without the payoff amount, CityPlace could not refinance its loan through a new lender. Id. Between September and December of 2018, the parties litigated Berkadia's compliance with the appraisal process, ultimately resulting in an emergency motion for preliminary injunction, by CityPlace, wherein CityPlace sought to compel Wells Fargo to accept CityPlace's position on the appraisal process so that CityPlace could refinance the property. DE 14. That specific dispute was ultimately resolved by the parties insofar as Wells Fargo permitted CityPlace to satisfy its loan and refinance the property (using a disputed number for the payoff amount), subject to this Court's determination of the proper payoff amount post-closing. DE 26. Plaintiff's Motion argues that this Court may find as a matter of law that Plaintiff's payoff amount (and corresponding appraisal) is the correct amount under the Agreement.

         II. SUMMARY JUDGMENT STANDARD

         Summary judgment is appropriate 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). The existence of a factual dispute is not by itself sufficient grounds to defeat a motion for summary judgment; rather, “the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A dispute is genuine if “a reasonable trier of fact could return judgment for the non-moving party.” Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (citing Anderson, 477 U.S. at 247-48). A fact is material if “it would affect the outcome of the suit under the governing law.” Id. (citing Anderson, 477 U.S. at 247-48).

         In deciding a summary judgment motion, the Court views the facts in the light most favorable to the non-moving party and draws all reasonable inferences in that party's favor. See Davis v. Williams, 451 F.3d 759, 763 (11th Cir. 2006). The Court does not weigh conflicting evidence. See Skop v. City of Atlanta, 485 F.3d 1130, 1140 (11th Cir. 2007). Thus, upon discovering a genuine dispute of material fact, the Court must deny summary judgment. See id.

         III. ANALYSIS OF THE FACTS

         Before the Court analyzes the parties' legal arguments in this case, it is necessary to set forth (1) the crux of the dispute between the parties, (2) CityPlace's version of the facts, and (3) Wells Fargo's version of the facts. After the Court discusses these three areas, the Court addresses the parties' respective legal arguments.

         (1) The Crux of the Dispute Between the Parties

         Stated simply, CityPlace contends that Wells Fargo lost its chance to challenge CityPlace's appraised value of its property. Section 4.9 of the Agreement governs the procedure for refinancing appraisals. DE 89-2 at 15. Under Section 4.9, CityPlace was required to notify Wells Fargo of its intent to refinance. Id. CityPlace undisputedly did so. DE 119 at 2. Subsequent to this notification, CityPlace was required to appoint an appraiser. DE 89-2 at 17. CityPlace was also required to disclose its appraiser's identity and to provide Wells Fargo with the appraiser's report. Id. CityPlace undisputedly did both of these things. DE 119 at 3.

         The Agreement imposes counter-requirements on Wells Fargo, once Wells Fargo was notified of CityPlace's intent to refinance. DE 89-2 at 17. Wells Fargo was required to appoint an appraiser within a certain timeframe, and the parties dispute whether Wells Fargo did so. Wells Fargo was required to notify CityPlace of its appraiser's identity, and the parties dispute whether Wells Fargo did so in a timely fashion.

         CityPlace's position that Wells Fargo failed to comply with the appraiser appointment and notification process comes with a powerful ramification. Section 4.9(g) of the Agreement addresses the situation where “either Lender or Borrower does not appoint a Qualified Appraiser within the time period, ” and the result is that “the MAI Appraisal obtained by Lender or Borrower . . . shall be the only MAI Appraisal used to calculate the Net Refinancing Proceeds.” DE 89-2 at 17 (emphasis added). This forms the premise for CityPlace's position that only CityPlace's appraisal may be used in the refinancing calculations.

         (2) CityPlace's Version of the Facts

         CityPlace contends that the parties' transaction is unremarkable, other than for the fact that Berkadia made a systemic series of errors related to untimeliness. The facts, as presented by CityPlace, do not focus on the reason CityPlace wanted to refinance its property or the context surrounding CityPlace's decision to do so. Instead, CityPlace's rendition of the record evidence focuses on its own compliance with the Agreement's provisions for refinancing and Berkadia's failure to comply. More specifically, CityPlace contends that Berkadia never appointed an appraiser nor timely informed CityPlace of the identity of an appraiser. DE 89 at 6-7.

         There is certainly record evidence to support CityPlace's position. By way of example, the parties agree[2] that the latest date Berkadia could appoint an appraiser was September 24, 2018. On October 5th-well past the aforementioned deadline-Berkadia sent an e-mail to CityPlace wherein Berkadia stated that “Berkadia will appoint an MAI appraiser.” DE 119 at 4 (emphasis added). Thus, Berkadia's statement that it would appoint an appraiser is evidence that no appraiser had been appointed by September 24th, and other record evidence supports this inference as well. E.g., DE 90 at 6-7. Furthermore, it is undisputed that Berkadia never provided CityPlace with written notice of the identity of its appraiser during the relevant time period.[3] DE 119 at 5. Finally, it is undisputed that Berkadia never provided CityPlace with a copy of its ...


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