Cerco Bridge Loans 6 LLC v. Schenker

Background

At an initial pretrial conference on March 19, 2024, the court directed the parties to propose a briefing schedule for Plaintiff’s motion for partial summary judgment and entered the parties’ agreed case management plan and scheduling order. Defendants later filed a motion to dismiss and asked the court to reconsider allowing Plaintiff to file an early partial-summary-judgment motion and to stay discovery until the motion to dismiss was resolved.

Defendants argued that the case did not warrant early summary-judgment briefing and that Plaintiff’s discovery requests conflicted with Plaintiff’s earlier statement that no additional discovery was needed. Plaintiff responded that it was pursuing discovery to develop the record and address Defendants’ arguments about interpreting the guaranty.

Court’s reasons

The court declined to reconsider its decision allowing early partial-summary-judgment briefing. At the March 19 conference, Defendants’ counsel agreed that the guaranty was unambiguous and fairly clear on its face. Because an unambiguous contract may be appropriate for summary judgment based on its terms, the court had allowed the briefing. The court concluded that Plaintiff’s pursuit of discovery under the agreed case management plan did not change that conclusion or make the discovery improper. Defendants could argue in their opposition papers that any facts relied on by Plaintiff were genuinely disputed.

The court also denied Defendants’ request to stay discovery. It explained that filing a motion to dismiss ordinarily does not justify pausing discovery and considered the breadth of the requests, the burden of responding, prejudice from delay, and the strength of the pending motion. On the current record, the court found that the requests were limited to documents concerning the guarantors’ guaranteed obligations under Section 1.2(a) of the guaranty from January 1, 2022, to the present, and were proportional to the needs of the case. The first two factors slightly favored Plaintiff because the requests involved ordinary contract-litigation burdens. The prejudice-from-delay factor also slightly favored Plaintiff because Plaintiff was paying ground rent and other property expenses. Although the motion to dismiss raised what Defendants described as strong jurisdictional and merits arguments, it was not fully briefed, so its strength was unclear. The court also noted that Plaintiff might seek permission to amend if the motion to dismiss were granted.

Disposition and schedule

The court denied Defendants’ requests to reconsider the decision allowing Plaintiff to file an early partial-summary-judgment motion and to stay discovery. The court did not decide the motion to dismiss or the partial-summary-judgment motion. It ordered Plaintiff to file a consolidated opposition to the motion to dismiss and supporting memorandum for partial summary judgment by April 26, 2024; Defendants to file their opposition to partial summary judgment and reply supporting the motion to dismiss by May 17, 2024; and Plaintiff to file a reply by May 31, 2024. The Clerk was requested to close ECF No. 43.