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The Union Labor Life Insurance Company v. O'Neill

United States District Court, D. Rhode Island

January 3, 2017

THE UNION LABOR LIFE INSURANCE COMPANY, Plaintiff
v.
J. BRIAN O'NEILL, Defendant

          ORDER

          Mary M. Lisi Senior United States District Judge

         This matter is before the Court on review of a Report and Recommendation (“R&R”) issued by Magistrate Judge Sullivan on October 25, 2016 (ECF No. 34). Because the Defendant filed a timely objection to the R&R, the Court reviews de novo those portions of the R&R to which an objection has been made. See Fed.R.Civ.P. 72(b). The Court has thoroughly reviewed and considered the R&R, the Defendant's objection thereto (ECF No. 35-1), and the Plaintiff's response (ECF No. 36). Having done so, the Court now adopts the R&R in its entirety. Accordingly, the Defendant's motion for partial summary judgment on Counts I and II as to liability is GRANTED.

         I. Factual Background and Procedural Summary

         The Plaintiff, The Union Labor Life Insurance Company (“ULLICO”), seeks payment under a Guaranty (the “Guaranty”) executed by Defendant J. Brian O'Neill (“O'Neill”) in his personal capacity in connection with a loan agreement (the “Loan Agreement”) between ULLICO and two companies (the “O'Neill Companies”) of which O'Neill is the principal. The Loan Agreement served to refinance the development and marketing of a condominium high-rise (the “Property”) in Portsmouth, Rhode Island in 2012.

         On April 10, 2014, after the O'Neill Companies defaulted on the Loan Agreement, ULLICO and O'Neill, together with the O'Neill Companies and another O'Neill entity (together with the O'Neill Companies, the “O'Neill Entities”), executed a forbearance agreement (the “Forbearance Agreement”) to extend the term of the Loan Agreement and to afford the O'Neill Companies the opportunity to sell the Property and repay the loan. Shortly thereafter, the O'Neill Entities failed to make an April 30, 2014 real estate tax payment as required under the Forbearance Agreement. The failure to make the tax payment constituted a default. ULLICO took title to the Property and demanded payment from O'Neill under the Guaranty and the Forbearance Agreement, which O'Neill refused.

         On April 16, 2015, ULLICO brought claims against O'Neill for breach of guaranty (Count I), breach of the Forbearance Agreement (Count II), and breach of the covenant of good faith and fair dealing (Count III). The parties engaged in, at times, contentious discovery proceedings. On April 15, 2016, the Court granted the parties' joint motion for an extension of time to complete discovery, extending factual discovery to August 28, 2016, expert discovery to December 19, 2016, and re-setting the deadlines for the filing of dispositive motions to January 18, 2017. April 15, 2016 Order (ECF No. 21).

         On May 31, 2016, ULLICO filed a motion for partial summary judgment on liability (ECF No. 22). O'Neill responded with an objection on July 18, 2016 (ECF No. 24), to which ULLICO filed a reply on August 9, 2016 (ECF No. 26). On August 22, 2016, the parties filed a joint motion (ECF No. 30) to stay discovery and further extend the case management deadlines. The joint motion states that resolution of Plaintiff's summary judgment motion would “determine whether there is any further need for discovery on liability issues or only potentially Plaintiff's alleged damages.” Joint Motion at 2. The Court granted the motion on August 23, 2016. August 23, 2016 Order (ECF No. 31).

         Following a hearing on September 21, 2016, Magistrate Judge Sullivan issued a detailed and well-reasoned R&R, in which she recommended that ULLICO's motion for partial summary judgment be granted. On November 8, 2016, O'Neill filed a timely objection to the R&R, to which ULLICO filed a response in opposition on November 22, 2016.

         II. Standard of Review

         The Court, in considering a motion for summary judgment, reviews the record “in the light most favorable to the non-moving party, drawing all reasonable inferences in its favor.” Merchants Ins. Co. of New Hampshire, Inc. v. U.S. Fidelity and Guar. Co., 143 F.3d 5, 7 (1st Cir. 1998)(citing Reich v. John Alden Life Ins. Co., 126 F.3d 1, 6 (1st Cir. 1997)).

         ULLICO, as the party seeking summary judgment, bears the burden of establishing the lack of a genuine issue of material fact. Merchants Ins. Co. of New Hampshire, Inc. v. U.S. Fidelity and Guar. Co., 143 F.3d at 7. “Once such a showing is made, ‘the burden shifts to the nonmoving party, who must, with respect to each issue on which [it] would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in [its] favor.'” Flovac, Inc. v. Airvac, Inc., 817 F.3d 849, 853 (1st Cir. 2016) (quoting Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir.2010)).

         Summary judgment is appropriate “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.” Fed.R.Civ.P. 56(a). “A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party.” Prescott v. Higgins, 538 F.3d 32, 40 (1st Cir. 2008) (citations omitted). “A fact is material if it has the potential of determining the outcome of the litigation.” Id. (quoting Maymi v. Puerto Rico Ports Auth., 515 F.3d 20, 25 (1st Cir. 2008)).

         III. Discussion

         O'Neill's objections to the R&R echo his arguments opposing ULLICO's motion for partial summary judgment. Specifically, O'Neill contends that (1) ULLICO waived the O'Neill Entities's obligation to pay real estate taxes on April 30, 2014; (2) O'Neill's request for additional discovery pursuant to Fed.R.Civ.P. 56(d) should have been granted; and (3) the Forbearance Agreement did not become effective until ...


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