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American First Federal, Inc. v. Zaria Properties, LLC

United States District Court, W.D. North Carolina, Charlotte Division

June 19, 2017

AMERICAN FIRST FEDERAL, INC., Plaintiff,
v.
ZARIA PROPERTIES, LLC, LENRAE WEAVER and HASSAN RADMANESH, Defendants and Third Party Plaintiffs,
v.
NEW DOMINION BANK, INC. and GREGORY GREER, Third Party Defendants.

          ORDER

          Frank D. Whitney, Chief United States District Judge

         THIS MATTER is before the Court on several motions by Plaintiff and Third Party Defendants. In September 2016, Third Party Defendants filed a Motion for Summary Judgment as to Third Party Complaint (Doc. No. 29), and Plaintiff filed a Motion for Summary Judgment as to All Claims and Counterclaims (Doc. No. 32). After all parties fully briefed the motions, the Court held a hearing on February 9, 2017. At the conclusion of the hearing, the Court entered an oral ruling granting the motions for summary judgment and instructing the parties to file supplemental briefs or motions regarding an award for attorneys' fees and costs. Thereafter, Third Party Defendants filed a Motion for Attorneys' Fees and Costs with a supporting affidavit (Doc. Nos. 59-60), and Plaintiff filed a Brief on Propriety of an Award of Attorney's Fees with supporting affidavits (Doc. Nos. 61-63). These motions are also fully briefed, and the matter is ripe for review. For the reasons that follow, Third Party Defendants' Motion for Summary Judgment (Doc. No. 29) is GRANTED, Plaintiff's Motion for Summary Judgment (Doc. No. 32) is GRANTED, and Third Party Defendants' Motion for Attorneys' Fees and Costs (Doc. No. 59) is DENIED.

         I. BACKGROUND

         In 2005, Defendants Weaver and Radmanesh became interested in purchasing two undeveloped residential lots near Lake Norman (the “Property”). They formed Defendant Zaria Properties, LLC (“Zaria, ” and together with Weaver and Radmanesh, “Borrowers”) for the sole purpose of holding the Property. (Doc. No. 30-2, p. 6; Doc. No. 30-3, p. 14). In 2006, Borrowers executed contracts to purchase the lots for $250, 000 and $150, 000. (Doc. No. 30-2, p. 25, Doc. No. 30-3, p. 13). Nearly two years later, in 2008, Borrowers pursued and obtained a loan from Third Party Defendant New Dominion Bank (“NDB”) to purchase the Property. (Doc. No. 1-1). NDB furnished Borrowers with appraisals ordered by the bank appraising the Property at $270, 000 and $170, 000. (Doc. No. 30-2, p. 10, Doc. No. 30-3, p. 14).

         On August 13, 2008, Zaria executed a Promissory Note (the “Note”) that obligated Zaria to pay to NDB the principal amount of $471, 750 by August 10, 2010. (Doc. No. 1-1, p. 1). Radmanesh and Weaver each executed a Guaranty of Payment Agreement (the “Guaranties”) unconditionally guaranteeing the payment of all amounts due under the Note. (Doc. No. 1-1, p. 18-21). Thereafter, Borrowers executed several successive amended agreements extending the time within which the debt had to be repaid. (Doc. No. 1-1, pp. 3-14).

         The Guaranties included a waiver clause in which Radmanesh and Weaver each

waive[d] all rights of offset and counterclaims against Bank or Borrower, all defenses to the enforceability of the[e] Guaranty, all defenses based on suretyship or impairment of collateral, and rights under NCGS Section 26-7 et seq. or any similar or subsequent laws, and any defenses which the undersigned or the Borrower may assert on the Obligations, including but not limited to, failure of consideration, breach of warranty, theft, statute of frauds, bankruptcy, lack of legal capacity, lender liability, deceptive trade practices accord and satisfaction or usury.

(Doc. No. 1-1, pp. 18, 20). Likewise, in one amended agreement extending the loan's due date, Zaria agreed to “waive all claims, defenses, setoffs, or counterclaims relating to the [loan], or any document securing the [loan], that [it] may have.” (Doc. No. 1-1, p. 14). In another, Weaver and Radmanesh “unconditionally consent[ed] to the modification [and] acknowledge[d] that the terms and conditions of the [loan] and the Guaranty continue in full force and effect.” (Doc. No. 30-3).

         Despite having been in the business of owning and managing commercial and residential properties for nearly a decade, (Doc. No. 30-2, pp. 3-7; Doc. No. 30-3, pp. 4-5, 23-25, 28), Borrowers chose not to verify the appraisals ordered by NDB, chose not to order their own appraisals, and chose not to conduct any due diligence regarding the Property's value prior to obtaining the loan. (Doc. No. 30-2, pp. 10-12; Doc. No. 30-3, pp. 15-18). They also admit to not reading the loan documents before signing them. (Doc. No. 30-2, pp. 8, 16-20; Doc. No. 30-3, pp. 7-8, 11, 31-32).

         On December 19, 2014, NDB sold its interest in the loan documents to Plaintiff, (Doc. 1-1, p. 15), and Plaintiff demanded payment (Id. at 16). When Borrowers failed to make payments as required by the loan documents, Plaintiff filed the instant action for breach of contract and breach of personal guaranties, as well as for attorneys' fees and costs. (Doc. No. 1).

         Borrowers raised several affirmative defenses and counterclaims against Plaintiff and filed a third party complaint against NDB and Greer, a senior Vice President at NDB who handled the loan at issue. (Doc. No. 13). Both Plaintiff and Third Party Defendants filed motions for summary judgment asserting, inter alia, that the waiver provisions contained in the loan documents bar all of Borrowers' defenses, claims, and counterclaims.

         II. STANDARD OF REVIEW

         Summary judgment must be granted “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); Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir. 2003). The court determines “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The moving party has the burden to show the court it must prevail because there are no genuine issues of material fact, Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), and the non-moving party must then demonstrate the existence of “evidence from which a jury might return a verdict in his favor.” Anderson, 477 U.S. at 257. In making its decision, the Court must view the facts and all inferences drawn from the facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986); see also Henson v. Jefferson, N.C.App. 204, 200 S.E.2d 812 (1973).

         III. ...


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