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Footbridge Limited Trust v. Zhang

November 5, 2008

FOOTBRIDGE LIMITED TRUST, PLAINTIFF,
v.
JAMES ZHANG, DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiff Footbridge Limited Trust ("Footbridge") has filed the instant malpractice and negligence action against James Zhang ("Zhang"), an attorney who is proceeding pro se. Footbridge loaned $1.5 Million to certain non-party borrowers through Cambridge Holdings Group, Inc. ("Cambridge"), a non-party that employed Zhang as an attorney. Footbridge alleges that its loan was supposed to have been secured by mortgages on two pieces of real property located in Pennsylvania and New Jersey, respectively, but that its security interests were not perfected (i.e. the mortgage was not recorded) on the New Jersey property until approximately seven months after the closing of the loan transaction.*fn1 During this seven month period, National Penn Bank (also a non-party) recorded a mortgage as to which a security interest in the New Jersey property was pledged. After the borrowers defaulted on their loan and filed for bankruptcy, Footbridge attempted to foreclose on its security interests. Because National Penn Bank had a priority interest by virtue of its earlier recorded mortgage, Footbridge alleges that it received only $467,959 from the sale of the properties instead of the $2.25 Million it would have received had its security interests been perfected immediately following the closing of the loan transaction.

Footbridge blames Zhang for the seven-month lapse between the closing of the loan transaction and the perfection of Footbridge's security interests. Zhang, in turn, maintains that he bears no responsibility for the events described above. He denies having attended the loan closing or having any knowledge of the loan transaction between Cambridge and the borrowers, and asserts that he never had possession of the mortgage documents at issue. Zhang also denies owing any legal obligation to Footbridge.

Currently pending before the Court are the parties' Cross-Motions for Summary Judgment and two motions filed by Zhang relating to Footbridge's submissions to the Court -- (1) Defendant's Motion to Strike a Portion of Plaintiff's Affidavit in Support of its Motion for Summary Judgment and (2) Defendant's Motion to Strike a Portion of Plaintiff's Response to Defendant's Statement of Undisputed Material Facts. Footbridge did not oppose either Motion to Strike. After thoroughly reviewing all of the parties' submissions, including the attachments thereto, applicable case law, statutory authority, and the record of the case as a whole, the Court shall GRANT Defendant's [102, 104] Motions to Strike, shall GRANT Defendant's [95] Motion for Summary Judgment, and shall DENY Plaintiff's [96] Motion for Summary Judgment, for the reasons that follow.

I. BACKGROUND

As a preliminary matter, the Court shall address Footbridge's inexplicable failure to comply with Local Civil Rule 7(h)(1), which sets forth the requirements that parties must follow when filing or opposing a motion for summary judgment:

[e]ach motion for summary judgment shall be accompanied by a statement of material facts as to which the moving party contends there is no genuine issue, which shall include references to the parts of the record relied on to support the statement. An opposition to such a motion shall be accompanied by a separate concise statement of genuine issues setting forth all material facts as to which it is contended there exists a genuine issue necessary to be litigated, which shall include references to the parts of the record relied on to support the statement . . .

In determining a motion for summary judgment, the court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion.

LCvR 7(h)(1). The Court has repeatedly instructed the parties to comply with this local rule. See, e.g., [4] Order at 1 (Mar. 16, 2004) (requiring the parties "to comply fully with [] LCvR 7(h)," and advising the parties that "[t]he Court assumes facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion"); [46] Order at 4-5 (Jan. 18, 2007) (instructing the parties to "comply fully with [] LCvR 7(h)," which requires the parties to "furnish precise citations to the portions of the record on which they rely"). When the Court set the briefing schedule for the parties' cross-motions for summary judgment, it again advised the parties to comply with this local rule. See [93] Order at 1-2 (Feb. 20, 2008) (instructing the parties to "comply fully with [] LCvR 7(h)," and repeating that "[a]t all points, parties must furnish precise citations to the portions of the record on which they rely").

Footbridge ignored Local Civil Rule 7(h) and the Court's Orders relating to the same in at least four ways. First, Footbridge's Statement of Material Facts contains several facts that lack any citation to record evidence, a clear requirement of Local Civil Rule 7(h). See, e.g., Pl.'s Stmt. ¶¶ 11, 14, 17, 18. Second, where Footbridge does include a citation to record evidence, it fails to furnish "precise" citations to the record and instead relies on references to entire documents -- including one that is over forty pages in length. Id. ¶¶ 5, 12, 21 (11/30/00 Mortgage and Security Agreement). Third, Footbridge failed to file any response to Zhang's Statement of Material Facts even though the Court advised the parties that it would "assume[] facts identified by the moving party in its statement of material facts are admitted" unless controverted. [4] Order at 1 (Mar. 16, 2004). The Court nevertheless allowed Footbridge to file a response by issuing yet another Order directing Footbridge to comply with Local Civil Rule 7(h). See Min. Order dated Aug. 27, 2008. Although Footbridge complied with this instruction, it again violated Local Civil Rule 7(h) by objecting to two of Zhang's proffered facts without citing to any record evidence. Pl.'s Resp. Stmt. ¶¶ 15, 16.

Footbridge's fourth violation led Zhang to file a Motion to Strike paragraphs 15 and 16 of Footbridge's Response for lack of any citations to record evidence. See [104] Def.'s Mot. to Strike at 1. Footbridge did not file an Opposition. The Court shall therefore grant the Motion to Strike as conceded, see Local Civil Rule 7(b) (authorizing a court to treat an unopposed motion as conceded), and as appropriate on the merits, and shall strike paragraphs 15 and 16 of Footbridge's Response to Zhang's Statement of Material Facts. To survive a motion for summary judgment, moreover, a party's claims must rely on evidence and not bare allegations. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Although the burden to identify such evidence should fall on the parties, in response to Footbridge's failure to identify the same, the Court has undertaken its own independent review of the record and shall disregard all proffered facts contained in Footbridge's Statement of Material Facts (and reflected in its summary judgment briefs) that are not properly supported by record evidence.

A. Factual Background

On November 30, 2000, Footbridge executed a Participation Agreement with Cambridge as part of a $1.5 Million loan to James M. Dwyer Real Estate Equities International; JMD, VJ Locust, LLC; Dwyer VJ-Locust, L.P.; James M. Dwyer, individually; and Margart A. Dwyer, individually (the "Borrowers").*fn2 Pl.'s Stmt. ¶ 1. Pursuant to the Participation Agreement, the $1.5 Million loan was to be secured by two real properties located in Pennsylvania and New Jersey, respectively. Id. ¶ 3. The Participation Agreement also required Cambridge "to maintain books to account for the loan, and, without limitation, provide all services necessary and reasonable to administer and collect sums due under the loan and monitor the status of the collateral for the sole and exclusive benefit and use of [Footbridge]." Id. ¶ 4.

At the loan closing, the Borrowers signed a Mortgage and Security Agreement that pledged a security interest in the properties. Pl.'s Stmt. ¶ 12. The first page of the agreement contained the following typed statement in the upper right-hand corner:

After recording, please return to:

James Zhang, Esq. Cambridge Capital Group, Inc. 5335 Wisconsin Avenue, NW, Suite 440 Washington, DC 20015

Id. at 1. The mortgage on the New Jersey property was recorded approximately seven months after the closing on July 5, 2001.*fn3 Pl.'s Stmt. ¶ 15; Def.'s Resp. Stmt. ¶ 15. Footbridge alleges that this delay caused them to suffer ...


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