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DICICCO v. WILLOW GROVE BANK

March 19, 2004.

BRENDA DICICCO Plaintiff,
v.
WILLOW GROVE BANK; FRED MARCEL; THOMAS FEWER; and, KEVIN O'DONNELL Defendants; WILLOW GROVE BANK Counterclaim Plaintiff, vs. BRENDA DICICCO; and, 1750 WOODHAVEN DRIVE, L.P. Counterclaim Defendants; 1750 WOODHAVEN ROAD, L.P. Counterclaim Plaintiff, vs. WILLOW GROVE BANK Counterclaim Defendant



The opinion of the court was delivered by: JAN DUBOIS, District Judge

ORDER AND MEMORANDUM

ORDER

AND NOW, this 19th day of March, 2004, upon consideration of Plaintiff's Motion for Leave to Fil a Third Amended Complaint (Document No. 32, filed July 15, 2003), Defendant Kevin O'Donnell's Motion in Opposition to Brenda DiCicco's Motion for Leave to File a Third Amended Complaint (Document No. 38, filed August 14, 2003), and the related submission of Page 2 plaintiff Brenda DiCicco,*fn1 and Defendant Kevin O'Donnell's Motion to Dismiss 1750 Woodhaven Drive, L.P.'s Counterclaims with Prejudice (Document No. 37, filed August 14, 2003), and the related submissions of the parties,*fn2 IT IS ORDERED that Plaintiff's Motion for Leave to File a Third Amended Complaint (Document No. 32) is GRANTED. Kevin O'Donnell's Motion in Opposition to Brenda DiCicco's Motion for Leave to File a Third Amended Complaint (Document No. 38), treated by the Court as a response to Plaintiff's Motion for Leave to File a Third Amended Complaint, is DENIED.

  IT IS FURTHER ORDERED that Defendant Kevin O'Donnell's Motion to Dismiss 1750 Woodhaven Drive, L.P.'s Counterclaims (Document No. 37) is GRANTED IN PART AND DENIED IN PART as follows:

  (1) Defendant Kevin O'Donnell's Motion to Dismiss 1750 Woodhaven Drive, L.P.'s Counterclaims for breach of the loan agreement and breach of oral contract is DENIED.

  (2) Defendant Kevin O'Donnell's Motion to Dismiss 1750 Woodhaven Drive, L.P.'s Counterclaims for fraud, negligent misrepresentation, breach of fiduciary duty and negligence is GRANTED.

  (3) Defendant Kevin O'Donnell's Motion to Dismiss 1750 Woodhaven Drive, L.P.'s Counterclaims is DENIED in all other respects. Page 3

  MEMORANDUM

 I. FACTS AND PROCEDURAL HISTORY

  This consolidated action arises out of a series of loan transactions between plaintiff Brenda DiCicco. ("DiCicco") and defendant Willow Grove Bank ("Willow Grove"). The parties include: DiCicco; Willow Grove; Kevin O'Donnell ("O'Donnell"), Vice President of Commercial Loans at Willow Grove Bank; Fred Marcel ("Marcel"), President and Director of Willow Grove Bank; Thomas Fewer ("Fewer"), Senior Vice President at Willow Grove Bank; and 1750 Woodhaven Road, L.P., a business wholly owned by DiCicco.

  The following facts are set forth in the pleadings at issue in the pending motions:

  In the fall of 1999, DiCicco. met with O'Donnell about securing a $5,000,000 credit line for her business, ATS Products Corporation ("ATS"). ATS is in the business of catalog sales of automobile and travel related products. On January 10, 2000, ATS executed a Loan, Security and Suretyship Agreement ("loan agreement") for the $5,000,000 loan. DiCicco signed the loan agreement as an individual surety, and 1750 Woodhaven Drive, L.P. ("Woodhaven") signed as a corporate surety. Woodhaven's sole corporate purpose was to acquire, own, and operate a property located in Bensalem, Pennsylvania to serve as ATS's corporate headquarters.

  In or around June 2000, ATS requested an additional $2,000,000 loan or credit extension. Willow Grove approved the request on September 22, 2000. The closing for the additional loan took place on October 6, 2000. At the closing, despite promises to extend $2,000,000 in credit, O'Donnell presented DiCicco. with an amendment to the loan agreement providing only an additional $1,548,670 loan. O'Donnell told DiCicco that Willow Grove preferred the other $400,000 to be advanced by a participating lender. However, O'Donnell assured DiCicco. that, if Page 4 a participating lender could not be obtained, Willow Grove would provide the additional $400,000 loan. O'Donnell also authorized ATS to issue checks that day totaling approximately $500,000 and promised that Willow Grove would honor those checks even if ATS did not have sufficient funds in its account. In reliance on this promise, ATS issued approximately $500,000 in checks to the United States Post Office to cover the mailing of ATS's catalogs. When the checks were presented to Willow Grove, however, only one of the checks were honored. As a result, the Post Office refused to mail the catalogs and ATS's business "was destroyed."

  On or about January 5, 2001, Willow Grove confessed judgment against ATS, DiCicco. and Woodhaven in the Bucks County Court of Common Pleas, seeking to recover monies under the loan agreement. See Willow Grove Bank v. ATS Products Corp., et al., Bucks County C.C.P. 01-00122-17-1. On January 18, 2001, ATS, DiCicco. and Woodhaven filed a Verified Petition to Strike Off, or Alternatively, to Open Judgment Entered by Confession, and to Stay Execution ("Petition to Strike"). On March 7, 2001, ATS filed a petition under Chapter 11 of the Bankruptcy Code. As a result of the bankruptcy filing, DiCicco. alleges ATS was able to remain in the Woodhaven property without paying rent until approximately December 2001, leaving Woodhaven unable to obtain a new tenant to cover its monthly mortgage payments. In June 2001, Allied Capital SBLC Corporation, Woodhaven's mortgagor, declared ...


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