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Access Point Financial, Inc. v. Ext-Indy Suites, LLC

United States District Court, N.D. Georgia, Atlanta Division

June 13, 2018

ACCESS POINT FINANCIAL, INC., Plaintiff,
v.
EXT-INDY SUITES, LLC, RYSZARD J. ZADOW, CLAIRE J. ZADOW, JERRY DEHNER, and HYDE PARK CG, LLC, Defendants.

          ORDER

          RICHARD W. STORY, UNITED STATES DISTRICT JUDGE.

         This case comes before the Court on Defendants' Jerry Dehner and Hyde Park CG, LLC's Motion for Summary Judgment of the Cross-Claims of Defendants Ext-Indy Suites, LLC and Ryszard and Claire Zadow (“Motion for Summary Judgment”) [153]. After reviewing the record, the Court enters the following Order.

         Background

         This action arises out of an arrangement between Plaintiff Access Point Financial, Inc. (“APF”) and Defendant Ext-Indy Suites, LLC (“Ext-Indy”). Ext-Indy and APF entered into several agreements in an effort to secure funds to transform a hotel, owned by Ext-Indy, into a more profitable enterprise. These agreements were facilitated by Ext-Indy's broker, Defendant Hyde Park CG, LLC (“HPCG”). On December 29, 2017, APF's claims against HPCG and Defendant Jerry Dehner (collectively the “HPCG Defendants”) were dismissed with prejudice by stipulation. (Stipulation of Dismissal, Dkt. [177].) On March 8, 2018, the claims between APF, Ext-Indy, Ryszard J. Zadow, and Claire J. Zadow (collectively the “Ext-Indy Defendants”) were dismissed with prejudice by stipulation. (Order, Dkt. [183].) The cross-claims asserted by the Ext-Indy Defendants against the HPCG Defendants are therefore all that remain pending.

         Ext-Indy's initial financing involved a loan with Private Capital Group (“PCG”). Ext-Indy entered into an agreement with HPCG in order to secure new financing prior to the maturity date on the loan with PCG. Ext-Indy and HPCG signed a written Advisory Engagement Agreement on July 30, 2013, under which HPCG would act as a broker for Ext-Indy. (Statement of Material Facts in Supp. of HPCG Defs.' Mot. for Summ. J. (“HPCG Defs.' SOMF”), Dkt. [153-2] ¶ 1.) HPCG facilitated the loan between APF and Ext-Indy.

         In their cross-claims, the Ext-Indy Defendants bring claims for breach of fiduciary duty, fraud, negligent misrepresentation, breach of contract, and other subsidiary claims. These claims, in large part, stem from the terms of the loan from APF. The Closing Statement, signed by Claire Zadow for Ext-Indy, stated that Ext-Indy would be required to make an equity contribution of $115, 610 prior to the first draw. (Id. ¶ 5.) The Ext-Indy Defendants allege that the inclusion of this term amounts to a breach of contract and a breach of fiduciary duty by the HPCG Defendants, as well as fraud and negligent misrepresentation. They further allege that Henry Dehner's representations that he would have the equity requirement removed after the Closing Statement was signed amounts to fraud and negligent misrepresentation. Finally, they allege that Henry Dehner shared confidential financial information with PCG, thus breaching the fiduciary duty owed to the Ext-Indy Defendants.

         Analysis

         I. Legal Standard

         Federal Rule of Civil Procedure 56 requires that summary judgment 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.” “The moving party bears ‘the initial responsibility of informing the . . . court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.'” Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Where the moving party makes such a showing, the burden shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).

         The applicable substantive law identifies which facts are material. Id. at 248. A fact is not material if a dispute over that fact will not affect the outcome of the suit under the governing law. Id. An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. at 249-50.

         Additionally, “the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). No. genuine issue of material fact exists “since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 323. Thus, if a party who has the burden of proof fails to make a showing sufficient to establish the existence of any essential element to a claim, summary judgment may be properly granted against him.

         Finally, in resolving a motion for summary judgment, the court must view all evidence and draw all reasonable inferences in the light most favorable to the non-moving party. Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296 (11th Cir. 2002). But, the court is bound only to draw those inferences that are reasonable. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50 (internal citations omitted); see also Matsushita, 475 U.S. at 586 (once the moving party has met its burden under Rule 56(a), the nonmoving party “must do more than simply show there is some metaphysical doubt as to the material facts”).

         II. Analysis

         A. Breac ...


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