639 Lanark LLC v. Alamo Lanark, LLC

CourtUnited States Bankruptcy Court, W.D. Texas
DecidedJanuary 3, 2024
Docket23-01011
StatusUnknown

This text of 639 Lanark LLC v. Alamo Lanark, LLC (639 Lanark LLC v. Alamo Lanark, LLC) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
639 Lanark LLC v. Alamo Lanark, LLC, (Tex. 2024).

Opinion

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Dated: January 03, 2024. Chitht GB CHRISTOPHER G. BRADLEY UNITED STATES BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION IN RE: § WC ALAMO INDUSTRIAL CENTER, § Case No. 22-10226-cgb LP, Debtor. § (Chapter 7) § § 639 LANARK, LLC § Plaintiff, § § Adversary No. 23-01011-cgb ALAMO LANARK, LLC § Defendant. § OPINION AND ORDER GRANTING SUMMARY JUDGMENT

Introduction The plaintiff in this tortious interference suit is a would-be buyer of real estate in San Antonio. The defendant is a lender that held a defaulted note secured by a deed of trust on the real estate. The would-be buyer claims that its failure to purchase the real estate was caused by the lender imposing illegitimate conditions on the payoff of its loan and the release of its lien.

The lender is entitled to summary judgment because it has established the defense of justification under governing Texas law. In the absence of any contractual or other duty to do otherwise, it was entitled to exercise its contractual rights and proceed to foreclosure of the defaulted loan. It was entitled to release its lien altogether, or to impose conditions on the release of that lien. Because the lender’s allegedly tortious actions were taken in the course of exercising its contractual rights, it has established the defense of justification. Summary judgment will be granted in its favor. Procedural Background On September 29, 2023, Defendant Alamo Lanark, LLC filed a Motion for Summary Judgment (the “Motion for Summary Judgment”).1 On October 20, 2023, the plaintiff filed a Response to Lender’s Motion for Summary Judgment (the “Response”).2 A week later, the defendant filed a Response to Plaintiff’s Objection to Motion for Summary Judgment (the “Reply”).3 On December 14, 2023, the Court conducted a hearing (the “Hearing”) on the Motion for Summary Judgment and took the matter under advisement. The Court has considered the Motion for Summary Judgment, the Response, the Reply, the pleadings in this Adversary Proceeding, the evidence presented at the Hearing and attached to the briefs,4 the record in the main bankruptcy case, and the statements and arguments of counsel.

1 Adv. Proc. Dkt. No. 11. Docket entry citations to this Adversary Proceeding are denoted with “Adv. Proc.,” and those of the main bankruptcy case with “Main Case.” 2 Adv. Proc. Dkt. No. 20. 3 Adv. Proc. Dkt. No. 21. 4 At the Hearing, the parties withdrew their objections to the admission of each other’s proposed exhibits, with the exception of portions of the two declarations that the Would-Be Buyer attached to its Response. While portions of them may have been improper as conclusory or not based on personal knowledge, the Court has considered the contested declarations, and they do not affect the outcome of this case. Jurisdiction and Authority This Adversary Proceeding was referred to this Court by the United States District Court for the Western District of Texas.5 It is related to the main bankruptcy case, In re WC Alamo Industrial Center.6 The Court has jurisdiction pursuant to 28 U.S.C. §§157(c)(2), 1334(b), and 1452(a). The Court has authority to issue a final judgment on this matter because both parties have consented to it doing so.7 Factual Background The plaintiff is 639 Lanark LLC (the “Would-Be Buyer”), and the defendant is Alamo Lanark, LLC (together with its predecessor in interest,8 the “Lender”). The debtor in this bankruptcy case is WC Alamo Industrial Center, LP (the “Debtor”). Before the bankruptcy commenced, the Debtor owned real estate at 635-639 Lanark Dr., San Antonio, Texas 78218 (the “Property”). The Debtor owed the Lender several million dollars on a note secured by a deed of trust on the Property in favor of the Lender.9 By mid-2020, the note was apparently in default.10 The Would-Be Buyer entered into a contract (the “Contract”) to purchase the Property from the Debtor for $3,986,000 on November 12, 2020. In preparation for closing, the Debtor contacted the Lender to establish a payoff amount and prepare to release the existing lien. The Would-Be Buyer alleges that the Lender tortiously interfered with the Contract by imposing unreasonable conditions on the release of its lien and seeking payment of excessive and unexplained fees. By contrast, the Lender contends that it was under no duty to cooperate as requested, and that in any case, it acted in a commercially reasonable fashion.

5 Order of Reference of Bankruptcy Cases and Proceedings (W.D. Tex. Oct. 4, 2013). 6 Case No. 22-10226 (Bankr. W.D. Tex.). See 639 Lanark, LLC v. Alamo Lanark, LLC (In re WC Alamo Indus. Ctr., LP), No. 22-10226, 2023 WL 8531544, at *4 (Bankr. W.D. Tex. Dec. 8, 2023) (finding that this Adversary Proceeding was related to the main bankruptcy case at the time of removal). 7 Adv. Proc. Dkt. Nos. 37, 39 (notices of consent); Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. 665, 674 (2015) (“[L]itigants may validly consent to adjudication by bankruptcy courts.”). 8 The original lender, Amplify Credit Union, apparently assigned its interests to Alamo Lanark, LLC in September of 2020. See Adv. Proc. Dkt. No. 11, ¶ 7. 9 Unless otherwise noted, the facts in this opinion are either uncontested or are taken as alleged by the Would-Be Buyer. 10 This is supported by evidence, see, e.g., Adv. Proc. Dkt. No. 11, Exhibit A, and was not contested by the Would-Be Buyer at the Hearing. At any rate, the transaction between the Would-Be Buyer and the Debtor did not go through. Meanwhile, the Lender repeatedly posted the Property for foreclosure,11 and a foreclosure sale was imminent when, on April 4, 2022, the Debtor filed for relief in this bankruptcy Court, staying the foreclosure. The Court first appointed a trustee and then converted the case from Chapter 11 into a Chapter 7 liquidation.12 Ultimately, in November of 2022, the Property was sold for $5,288,000 to a different buyer, with the approval of this Court.13 In January of 2023, the Would-Be Buyer sued the Lender in the 285th District Court of Bexar County, Texas, seeking the difference between the Contract price for the Property and the price the Property fetched in bankruptcy, on a theory of tortious interference with contract.14 It appears that aside from some filings related to service and the extension of response deadlines, there were no proceedings in state court.15 The Lender removed the case to federal court on April 3, 2023, and the Adversary Proceeding was docketed in this Court.16 This is not the only proceeding in which the failed Contract between the Would-Be Buyer and the Debtor, and the Lender’s alleged interference with it, has been at issue.17 There was an earlier state court lawsuit by the Debtor against the Lender, largely based on the same facts and alleged wrongdoing as this Adversary Proceeding, in which the Would-Be Buyer intervened.18 There was also litigation against the Lender in the main bankruptcy case, seeking to disallow part of its claim due in part to the same facts and alleged wrongdoing as alleged in this Adversary

11 According to the Lender’s Motion for Summary Judgment, the Property was posted for foreclosure sales to be held on November and December of 2020, as well as January and April of 2021. Adv. Proc. Dkt. No. 11, ¶¶ 7, 10. 12 Main Case Dkt. Nos. 54 (trustee appointment), 70 (conversion as of May 20, 2022). The trustee remained the same after the conversion of the case. 13 Main Case Dkt. No. 151 (order approving sale). 14 See Adv. Proc. Dkt.

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639 Lanark LLC v. Alamo Lanark, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/639-lanark-llc-v-alamo-lanark-llc-txwb-2024.