Sun Hotel, Inc. v. SummitBridge Credit Investments III, L.L.C.

86 Va. Cir. 189, 2013 WL 8019584, 2013 Va. Cir. LEXIS 4
CourtFairfax County Circuit Court
DecidedJanuary 23, 2013
DocketCase No. CL-2012-14062
StatusPublished
Cited by2 cases

This text of 86 Va. Cir. 189 (Sun Hotel, Inc. v. SummitBridge Credit Investments III, L.L.C.) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sun Hotel, Inc. v. SummitBridge Credit Investments III, L.L.C., 86 Va. Cir. 189, 2013 WL 8019584, 2013 Va. Cir. LEXIS 4 (Va. Super. Ct. 2013).

Opinion

By Judge R. Terrence Ney

These matters came before the Court on January 4, 2013, upon the Defendant Branch Banking and Trust’s Plea in Bar and Demurrer to Plaintiffs’ Complaint and on January 11, 2013, upon the Defendant SummitBridge Credit Investments III, L.L.C.’s Demurrer to Plaintiffs’ Complaint.

After oral arguments the Court took these matters under advisement. The following embodies the Court’s ruling.

[190]*190 Facts

In 2001, Sun Hotel, Inc. (“Sun Hotel”) purchased three parcels of property located on Plank Road in Fredericksburg, Virginia (the “Property”) using seller financing, and, subsequently, it refinanced the Property with a loan (“Loan”) from Defendant Branch Banking and Trust (“BB&T”) in 2004. The Loan was memorialized by a Commercial Note dated February 6, 2004, in the amount $8,550,000 between Sun Hotel as borrower and BB&T as lender. At the same time, Bharat Patel, Nalini Patel, and Jay Patel (collectively the “Patels”) each signed a Guaranty Agreement promising payment with regard to Sun Hotel’s obligations, then existing or after acquired, to BB&T (the “Guarantees”). In early 2006, Sun Hotel entered into an interest rate swap agreement with BB&T though which Sun Hotel could obtain a fixed interest rate for its variable rate loan.

Sun Hotel signed a Note Modification Agreement (“Modification”) and an ISDA Master Agreement (“Master Agreement”) with a Schedule to the Master Agreement (“Schedule” and, collectively, the “Swap Agreement”) on January 26,2006, and January 31,2006, respectively, to lock in a fixed interest rate, given rising interest rates in the market. Through the Swap Agreement documentation, Sun Hotel verified that BB&T was acting only at arm’s length and was not Sun Hotel’s agent, broker, advisor, or fiduciary in any respect in relation to the Swap Agreement.

For approximately two years after the execution of the Swap Agreement, the LIBOR interest rate rose and the Swap Agreement benefited Sun Hotel. LIBOR then began decreasing in 2008. Eventually, Sun Hotel defaulted under the Loan and the Swap Agreement in November 2011, and, in March 2012, BB&T assigned the Note, Deed of Trust, and Guarantees to SummitBridge Credit Investments HI, L.L.C. (“SummitBridge”). SummitBridge sold the Property in a foreclosure sale in March 2012 and then exercised its rights under file Note and related Guarantees to confess judgment against the Patels for the remaining deficiency due under the Loan after crediting the purchase price bid.

Procedural Background

On September 18, 2012, Sun Hotel and the Patels filed a Complaint which asserts the following causes of action against BB&T: Count I: Declaratory Judgment, Count H: Fraud, Count HI: Constructive Fraud, Count IV: Breach of Fiduciary Duty, Count V: Negligent Misrepresentation, Count VI: Breach of Implied Duty of Good Faith and Fair Dealing, Count VH: Rescission.

The Complaint asserts only a single cause of action for Declaratory Judgment against SummitBridge.

[191]*191The parties are currently before the Court on BB&T’s Plea and Bar and Demurrer to all counts of the Complaint, as well as SummitBridge’s Demurrer to Count I of the Complaint.

Analysis

A. Standard of Review on Plea in Bar

A plea in bar is a defensive pleading, which, if proven, creates a bar to plaintiffs’ or counterclaimant’s right of recovery. The party asserting the plea in bar bears the burden of proof. Cooper Industries, Inc. v. Melendez, 260 Va. 578, 594, 537 S.E.2d 580, 590 (2000).

When the parties do not introduce any evidence but, instead, present the statute of limitations issue to the court based solely on the claim or counterclaim, the court is to accept as true the facts stated in the claim or counterclaim for purposes of resolving the plea in bar. Schmidt v. Household Fin. Corp., II, 276 Va. 108, 112, 661 S.E.2d 834, 836 (2008).

B. Standard of Review on Demurrer

“A demurrer admits the truth of the facts contained in the pleading to which it is addressed, as well as any facts that may be reasonably and fairly implied and inferred from those allegations. A demurrer does not, however, admit the correctness of the pleader’s conclusions of law.” Yuzefovsky v. St. John’s Wood Apts., 261 Va. 97, 102, 540 S.E.2d 134, 136-37 (2001) (quoted in DurretteBradshaw, PC. v. MRC Consulting, L.C., 277 Va. 140, 142-43, 670 S.E.2d 704, 705 (2009)). In deciding whether to sustain a demurrer, a trial court must determine “whether the . . . motion for judgment alleged sufficient facts to constitute a foundation in law for the judgment sought, and not merely conclusions of law. To survive a challenge by demurrer, a pleading must be made with sufficient definiteness to enable the court to find the existence of a legal basis for its judgment. In other words, despite the liberality of presentation which the court will indulge, the motion must state a cause of action.” Hubbard v. Dresser, Inc., 271 Va. 117, 122-23, 624 S.E.2d 1, 4 (2006) (internal quotation marks and citations omitted).

C. Declaratory Judgment

Under Virginia Code § 8.01-184, declaratory relief is available under certain circumstances. The authority to enter a declaratory judgment is discretionaiy and must be exercised with great care and caution. USAA Casualty Ins. Co. v. Randolph, 255 Va. 342, 346, 497 S.E.2d 744, 746 (1988); Liberty Mut. Ins. Co. v. Bishop, 211 Va. 414, 421,177 S.E.2d 519, 524 (1970). In Virginia, enactment of the declaratory judgment statutes did [192]*192not vest the courts with authority to render advisory opinions, decide moot questions, or answer merely speculative inquiries. Reisen v. Aetna Life & Cas. Co., 225 Va. 327, 331, 302 S.E.2d 529, 531 (1983); City of Fairfax v. Shanklin, 205 Va. 227, 230, 135 S.E.2d 773, 776 (1964).

“A plaintiff has standing to institute a declaratory judgment proceeding if it has a ‘justiciable interest’ in the subject matter of the proceeding, either in its own right or in a representative capacity. Henrico County v. F.&W., Inc., 222 Va. 218, 223, 278 S.E.2d 859, 862 (1981); Lynchburg Traffic Bureau v. Norfolk & Western Ry., 207 Va. 107, 108, 147 S.E.2d 744, 745 (1966). In order to have a ‘justiciable interest’ in a proceeding, the plaintiff must demonstrate an actual controversy between the plaintiff and the defendant, such that his rights will be affected by the outcome of the case.” W. S. Carnes, Inc. v. Chesterfield County, 252 Va.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Mayo v. Wells Fargo Bank, N.A.
30 F. Supp. 3d 485 (E.D. Virginia, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
86 Va. Cir. 189, 2013 WL 8019584, 2013 Va. Cir. LEXIS 4, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-hotel-inc-v-summitbridge-credit-investments-iii-llc-vaccfairfax-2013.