The opinion of the court was delivered by: Standish, District Judge.
AND NOW, this 8th day of June, 2000, after the plaintiff, McNeil Real
Estate Fund XXVI, L.P., filed an action in the above-captioned case, and
after a motion for summary judgment was submitted by plaintiff, and after
a Report and Recommendation was filed by the United States Magistrate
Judge granting the parties ten days after being served with a copy to
file written objections thereto, and upon consideration of the objections
filed by defendant, Matthew's, Inc. of Delaware, and the response to
those objections filed by plaintiff, and upon independent review of the
motion and the record and upon consideration of the Magistrate Judge's
Report and Recommendation, which is adopted as the opinion of this
IT IS ORDERED that plaintiffs motion for summary judgment (Docket No.
7) is granted and judgment is entered in favor of plaintiff.
IT IS FURTHER ORDERED that within fifteen (15) days of the date of this
Order the parties submit a stipulation in conformity with the Magistrate
Judge's Report and Recommendation as to the total dollar amount owed
under the Lease and Guaranty Agreement through June 30, 2000, including
any interest due on the $519,799.45 uncontested damages and the present
value of the base rent payments due under the Lease Agreement for the
period between March of 2002 and February of 2005.
REPORT AND RECOMMENDATION
MITCHELL, United States Magistrate Judge.
Presently before this Court for disposition is a motion for summary
judgment brought by the plaintiff, McNeil Real Estate Fund XXVI, L.P.
Plaintiff commenced this action on August 30, 1999, bringing a single
claim for Breach of Guaranty Surety against defendant Matthew's, Inc. of
The record demonstrates that in 1993, McNeil acquired a retail mall in
Pittsburgh. Pennsylvania known as the Northway Mall.*fn1 In an effort to
"reposition" the Northwav Mall as a "power center," McNeil approached
Reading China about leasing space.*fn2 Jay Brinsfield, the manager and
controlling shareholder of Reading China, expressed interest in the
proposal and subsequently entered into negotiations with Dean Lontos, the
Vice President of Commercial Leasing at McNeil.*fn3 Once the commitment
was made to lease space at the Northway Mall, Mr. Brinsfield delegated
the lease negotiations to Joe Bizzarro, Reading China's Chief Financial
Officer.*fn4 During negotiations it became apparent that Reading China's
"financial statements were not particularly strong" and McNeil
consequently sought additional security. Specifically McNeil requested
that Matthews, Reading China's sister company which was also owned by Jay
Brinsfield and managed by Messrs. Bizzarro and Brinsfield, act as a
guarantor for Reading China.*fn5 A security agreement ("the Guaranty
Agreement") was eventually entered into providing that:
If the Lease is terminated or rejected in any such
[bankruptcy] proceeding then as between Landlord and
Guarantors, Landlord shall have the right to
accelerate all of Tenant's obligations under the Lease
and Guarantors' obligations under this Guaranty. In
such event, all such obligations shall become
immediately due and payable by Guarantors to Landlord
without any notice or demand whatsoever.*fn6
The Guaranty Agreement, which was signed by Mr. Bizzarro, was expressly
incorporated into the agreement subsequently entered into by Mr.
Brinsfield and Mr. Lontos on May 5, 1994, under which Reading China was
to lease space ...