Federal Deposit Insurance Corporation v. Rothenberg

Background

Silicon Valley Bank sued Michael Brent Rothenberg and Rothenberg Ventures, LLC, in California state court to recover unpaid loans. The state court later dismissed the claims against Rothenberg Ventures, leaving three breach-of-contract claims against Rothenberg personally. After the FDIC closed Silicon Valley Bank and became its receiver, the FDIC succeeded to the bank’s rights and replaced it as the plaintiff. The FDIC then removed the case to federal court and moved for summary judgment, which asks the court to decide a claim without a trial because no genuine dispute of important facts requires a trial.

Rothenberg did not file an opposition or a statement saying he did not oppose the motion. The court nevertheless explained that it could not grant the motion solely because it was unopposed; the FDIC still had to support its motion and show that no genuine dispute of material fact existed.

Loan Agreement No. 1

Silicon Valley Bank lent Rothenberg $300,000 under a written promissory note. The loan matured on August 11, 2017, but Rothenberg did not repay it. He made one payment of $1,458.54, leaving an outstanding principal balance of $298,662.33, and made no further payments after the bank’s written demand.

The court found that the FDIC proved each element of a breach-of-contract claim: a contract, the bank’s performance, Rothenberg’s breach, and resulting damages. The court granted the FDIC summary judgment on the first breach-of-contract claim and awarded principal damages of $298,662.33.

Loan Agreement No. 2

Silicon Valley Bank provided Rothenberg a $562,500 non-revolving line of credit under a written credit agreement. The loan matured on February 26, 2018, and Rothenberg did not repay it. He made one payment of $2,692.06, leaving an outstanding principal balance of $551,249.34, and made no further payments after the bank’s written demand.

The court found that the FDIC proved each element of the second breach-of-contract claim. It granted the FDIC summary judgment on that claim and awarded principal damages of $551,249.34.

Loan Agreement No. 3

Silicon Valley Bank provided Rothenberg a $750,000 loan under a written credit agreement. The agreement treated Rothenberg’s failure to repay Loan Agreement No. 1 as a breach of Loan Agreement No. 3. Rothenberg made one payment of $3,426.37 and made no further payments after the bank’s written demand, leaving an outstanding principal balance of $749,999.77.

The court found that the FDIC proved each element of the third breach-of-contract claim. It granted the FDIC summary judgment on that claim and awarded principal damages of $749,999.77.

Disposition

The court held that the FDIC satisfied its initial burden of showing no genuine issue of material fact on any of the three claims, while Rothenberg produced no evidence showing otherwise. The court granted the FDIC’s motion for summary judgment, directed the Clerk to enter judgment and close the file, and permitted the FDIC to file a motion for attorney’s fees within fourteen days after judgment was entered. The opinion does not determine an attorney-fee amount.