GE BUSINESS FINANCIAL SERVICES INC. v. GROVE STREET REALTY URBAN RENEWAL, L.L.C.
GE BUSINESS FINANCIAL SERVICES INC. f/k/a MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., Plaintiff,
GROVE STREET REALTY URBAN RENEWAL, L.L.C., et al., Defendants.
Civil No. 10-2279 (JBS/KMW).
United States District Court, D. New Jersey.
October 11, 2011.
JEROME B. SIMANDLE, District Judge.
This matter arises out of a commercial loan agreement for the construction of a residential apartment complex in West Deptford Township, New Jersey. In October of 2007, Plaintiff GE Business Financial Services Inc. ("GEBFS"), then operating under the name Merrill Lynch Business Financial Services, entered into a commercial loan agreement with Defendant Grove Street Urban Renewal ("Grove Street") which was secured by a mortgage. Plaintiff now seeks to recover on the loan and to foreclose the mortgage on certain property (a residential apartment complex). Currently before the Court is Plaintiff's motion for summary judgment as to Defendant's liability for the full loan amount and for foreclosure on the mortgage. [Docket Item 30.] The principal issues at stake in this motion are (1) whether Plaintiff's name change from Merrill Lynch Business Financial Services to GE Business Financial Services bars Plaintiff from recovery, and (2) whether Defendant can point to a dispute of fact that Plaintiff breached the implied covenant of good faith and fair dealing. As explained below, the Court will grant Plaintiff's motion for summary judgment.
II. BACKGROUND AND PROCEDURAL HISTORY
On October 16, 2007, Plaintiff (operating as Merrill Lynch Business Financial Services Inc.) entered into a loan agreement with Defendant Grove Street providing a loan in the amount up to $32,328,683 for the construction of two residential apartment buildings to be located in West Deptford, New Jersey. Poskus Aff. ¶ 7(a). These apartment buildings, called the "RiverWinds Apartments" were designated for age-restricted residents (for adults over age 55). Id. ¶ 9. Defendant signed two promissory notes (Note A and Note B), securing an obligation to repay the loan. Id. ¶ 7(b),(c). Additionally, Plaintiff secured the loan by a mortgage granting Plaintiff a first priority lien in the Rivercove property (the "property" or "Rivercove"), recorded, also, on October 16, 2007. Id. ¶ 8. The loan agreement specified that all principal and interest due under the loan was due to be paid in full by April 30, 2010. Id. ¶ 11. Defendant did not pay off all amounts owed as of the date of maturity, nor has it since; as of August 9, 2011, the amount owed under Notes A and B amounted to $34,574,558. Id. ¶ 12. Consequently, Plaintiff filed this action to recover amounts owed on May 5, 2010. [Docket Item 1.]
Shortly after Plaintiff commenced this action, Defendant filed for Chapter 11 bankruptcy protection, and an automatic stay was entered in this action. [Docket Item 7.] On May 25, 2011, the Bankruptcy Court entered an order granting GEBFS relief from the automatic bankruptcy stay. [Docket Item 11.] Indeed, Plaintiff reports to the Court that on July 29, 2011, the Bankruptcy Court of the District of New Jersey dismissed Defendant's bankruptcy case in its entirety. [Docket Item 25.]