Federal Deposit Insurance Corporation v. Rothenberg

Background

Silicon Valley Bank filed a state-court lawsuit against Michael Brent Rothenberg and Rothenberg Ventures, LLC, seeking recovery of unpaid loans. The claims against Rothenberg Ventures, LLC were later dismissed, leaving three breach-of-contract claims against Rothenberg personally. The Federal Deposit Insurance Corporation later became SVB’s receiver and succeeded to SVB’s rights and liabilities, including its position as plaintiff. The FDIC removed the case to federal court and moved for summary judgment.

Rothenberg did not file an opposition or a statement of non-opposition. The court nevertheless explained that it could not grant the motion merely because it was unopposed; it had to determine whether the FDIC’s evidence showed that no genuine dispute of material fact existed. A genuine dispute would be one supported by enough evidence that a reasonable jury could rule for the nonmoving party.

Loan Agreement No. 1

SVB lent Rothenberg $300,000 under a written promissory note dated August 11, 2014. The loan matured on August 11, 2017. Rothenberg did not repay it when due and made only one later payment of $1,458.54. After SVB demanded payment, he made no further payments. The court found that the FDIC proved the contract, SVB’s performance, Rothenberg’s breach, and resulting damages. It granted summary judgment on the first breach-of-contract claim and awarded principal damages of $298,662.33.

Loan Agreement No. 2

Under a written credit agreement dated February 26, 2015, SVB provided Rothenberg with a $562,500 non-revolving line of credit. The loan matured on February 26, 2018. Rothenberg made only one payment of $2,692.06 and did not repay the remaining balance after SVB demanded payment. The court found that the FDIC proved all elements of the breach-of-contract claim. It granted summary judgment on the second claim and awarded principal damages of $551,249.34.

Loan Agreement No. 3

SVB provided Rothenberg with a $750,000 loan under a written credit agreement dated December 17, 2015. The agreement allowed a breach of another financial agreement to constitute a default. The court found that Rothenberg’s failure to repay Loan Agreement No. 1 also breached Loan Agreement No. 3. Rothenberg made only one payment of $3,426.37 and did not make further payments after SVB’s written demand. The court found that the FDIC proved all elements of this breach-of-contract claim, granted summary judgment on the third claim, and awarded principal damages of $749,999.77.

Ruling

Judge Jon S. Tigar concluded that the FDIC met its initial burden of showing that no genuine issue of material fact existed for any of the three claims. Rothenberg did not present evidence showing a factual dispute. The court granted the FDIC’s motion for summary judgment, directed the Clerk to enter judgment and close the file, and allowed the FDIC to file a motion for attorney’s fees within fourteen days after judgment was entered. The opinion does not state that attorney’s fees were awarded.