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LLC v. Greenwald

United States District Court, M.D. Pennsylvania

August 17, 2017

ZORM 2009, LLC, Plaintiff
v.
JONATHAN GREENWALD, Defendant

          MEMORANDUM

          JAMES M. MUNLEY UNITED STATES DISTRICT COURT JUDGE

         This matter consists of two consolidated cases, 3:15cv35 and 3:15cv67. Each case deals with whether Defendant Jonathan Greenwald owes sums of money to plaintiff, Zorm 2009, LLC, under personal guaranties that he signed involving two mortgages. The consolidated cases now come before the court for decision following a non-jury trial held on February 7th and 8th, 2017. The following memorandum includes our findings of fact and conclusions of law. See Fed.R.Civ.P. 52(a)(1)

         Background

         Plaintiff filed lawsuits regarding personal guaranties on two mortgages. The parties refer to the two mortgages/loans as the HACAG loan and the HAC II loan. Specifically, plaintiff started the action involving the HACAG loan with a “complaint in confession of judgment” filed on January 1, 2015 against Greenwald and Robert Maynard. (Doc. 1, 3:15cv67). Pursuant to the confession of judgment complaint, the court entered judgment in favor of plaintiff in the amount set forth in the complaint, $958, 539.64. (Doc. 5, 3:15cv67, Judgment).

         Defendant Greenwald then filed a motion to strike the judgment or in the alternative, open the judgment. (Doc. 8, 15cv67). The court granted the motions to strike and/or open judgment and directed the clerk of court to reopen the case. (Doc. 25, 15cv67, Ord. of Aug. 4, 2015). The defendants answered the case and Defendant Greenwald moved to consolidate this case with 15cv35, which deals with the HAC II loan. (Doc. 27) The other parties concurred in the motion. (Id.) The court consolidated the cases on August 18, 2015. (Doc. 28, 15cv67, Ord. on Mtn. to Consol.)

         Plaintiff started the HAC II lawsuit by filing a complaint on January 5, 2015 against Defendant Jonathan Greenwald and Robert Maynard. (Doc. 1). The defendants answered the case and as noted above, the court consolidated the HAC II case with the HACAG case. The parties then went through a period of discovery.

         Subsequently, the parties filed motions for summary judgment, which the court denied on September 8, 2016. (Doc. 52). The court held a two-day non-jury trial, commencing on February 7, 2017. After the completion of the transcript, the parties filed proposed findings of fact and conclusions of law, bringing the case to its present posture.

         Legal standard

         Plaintiff has the burden of proving its case by the preponderance of the evidence. That means plaintiff has to prove, in light of all the evidence, that what it claims is more likely so than not so. Greenwich Collieries v. Director, Office of Workers' Comp., 990 F.2d 730, 736 (3d Cir. 1993). Defendant has the burden of establishing his affirmative defenses. Moore v. Kulicke & Soffa Indus., Inc., 318 F.3d 561, 566 (3d Cir. 2003).

         In determining whether any fact has been proved by a preponderance of evidence in the case, we have considered the testimony of all witnesses, regardless of who may have called them, and all exhibits received in evidence, regardless of who produced them.

         Defendant Greenwald's defense to the lawsuits is that the respective personal guarantees were no longer in effect at the time that lawsuits were filed. Thus, he personally, is not liable for any damages. We will address the guarantees separately beginning with the HAC II loan the case originally docketed at 3:15cv35.

         I. The case originally docketed at 3:15cv35, HAC II

         The first case has its origins in the HAC II loan extended by Oritani Bank to a business called HAC, II, LLC (hereinafter “borrower”) on April 9, 2009. (Doc. 78-1, Exh. A, Court Exh. 1, Statement of Stipulated Facts Agreed to by Counsel, (hereinafter “Stip.”) at ¶ 1). The principal amount of the loan was $2 million. (Id.) A construction/permanent loan note governed the repayment of the loan (hereinafter “HAC Note”). Defendant Jonathan Greenwald executed the HAC Note on behalf of HAC II. (Id.) A mortgage and Security Agreement secured the HAC Loan and encumbered property located at Melrose Street in Hazleton, PA (hereinafter “Melrose Property”). (Id. ¶ 2).[1]

         Additionally, Defendant Greenwald executed and delivered a guaranty to Oritani Bank, under which Defendant Greenwald became a surety for all obligations, indebtedness and liabilities of the borrower to Oritani Bank under the note. (Id. ¶ 3).[2] ...


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