Opinion
CV-2021-223
10-04-2021
ANDROSCOGGIN SAVINGS BANK, Plaintiff, v. CRAIG'S ALL NATURAL, LLC, MAINE FRESH, LLC, and CRAIG RIEF Defendants.
ORDER ON DEFENDANTS' REVISED MOTION TO PERMIT DISCOVERY
MaryGay Kennedy, Justice
Before the Court is Defendants Craig's All Natural, LLC, Maine Fresh, LLC, and Craig Rief's Revised Motion to Permit Discovery pursuant to M.R. Civ. P. 56(f). For the following reasons, the Motion is denied.
I, Background
Over the course of two years, Defendant Craig's All Natural, LLC ("CAN") executed and delivered three commercial promissory notes ("the Notes") to Plaintiff Androscoggin Savings Bank ("the Bank"). (Compl. ¶¶ 7-9.) Defendant Craig Rief ("Mr. Rief") executed a personal guaranty of the Notes. (Compl. ¶ 10.) The Bank later served CAN with a default notice regarding the Notes. (Compl. ¶ 11.) Following CAN's default, the Bank entered into a forbearance agreement ("the Forbearance Agreement") with Mr. Rief and CAN on April 16, 2021. (Compl. ¶ 12.) The Forbearance Agreement provides that Mr. Rief and CAN release the Bank from "any and all claims" arising out of the Notes or Forbearance Agreement and waive any "defense or offset to [Mr. Rief and CAN's] liability" for their obligations under the Notes. (Compl. Ex. E ¶ 11.) On June 2, 2021, the Bank served CAN and Mr. Rief with a default notice related to the Forbearance Agreement. (Compl. ¶ 13.)
Maine Fresh, LLC, is not a party to the Notes or the Forbearance Agreement.
Defendants admit that CAN and Mr. Rief executed a forbearance agreement on April 16, 2021, and state that "the document speaks for itself" as to release and waiver. (Defs.' Answer ¶ 12.)
In Count I of its Complaint, the Bank seeks judgment against CAN for the principals of the Notes, accrued interest, and fees. (Compl. ¶¶ 15-18.) In Count II, the Bank seeks judgment for the same against Mr. Rief as guarantor. (Compl. ¶¶ 19-22.) The Bank has moved for summary judgment on Counts I and II.
On September 27,2021, the Court granted Defendants' Motion to Enlarge Deadline to Respond to Motion for Partial Summary Judgment. In Defendants' Revised Motion to Permit Discovery, Defendants request that the Court enter an order further enlarging their time to respond to the Banks' Motion for Partial Summary Judgment to allow Defendants to conduct discovery.
Specifically, Defendants seek discovery of correspondence between the Bank and Mr. Rief, the Bank's internal files related to the Notes, and testimony of representatives of the Bank. (Defs.' Revised Mot. Permit Disc. 3.) Defendants claim that this discovery will support their assertion that the Bank acted in bad faith by reneging on a promise to restructure CAN's repayment obligations and by failing to mitigate damages resulting from CAN's breach of the Notes and the Forbearance Agreement. (Defs.' Revised Mot. Permit Disc. 5.)
IL Legal Standard
M.R. Civ. P. 56(f) provides that the court may order a continuance to permit discovery to be conducted if a party opposing a motion for summary judgment cannot, in the absence of discovery, "present by affidavit facts essential to justify the party's opposition." A Rule 56(f) motion should:
(1) be made within a 'reasonable time' after the filing of a summary judgment motion; (2) place the trial court on notice that movant wants the court to delay action on the summary judgment motion; (3) demonstrate that movant has been diligent in conducting discovery, and show 'good cause' why the additional discovery was not previously practicable with reasonable diligence; (4) set forth a plausible basis for believing that specified facts, susceptible of collection within a reasonable time frame, probably exist, and indicate how the emergent facts, if adduced, will influence the outcome of the pending summary judgment motion; and (5) attest that the movant has personal knowledge of the recited grounds for the requested continuance.Bay View Bank, N.A. v. Highland Golf Mortgagees Realty Tr., 2002 ME 178, ¶ 22, 814 A.2d 449 (quoting Simas v. First Citizens' Fed. Credit Union, 170 F.3d 37, 46 n.4 (1st Cir. 1999)) (bracket and ellipsis omitted).
III. Discussion
Defendants' Motion meets the first two enumerated criteria for a Rule 56(f) motion. To satisfy the fifth criterion, Defendants' Motion is accompanied by Mr. Rief's affidavit. With respect to the remaining criteria, Defendants assert that discovery has not yet been possible because of efforts spent on attempts to negotiate a resolution and the brief timeline of the case thus far. Defendants assert that the discovery sought is necessary and likely to be collected in a reasonable time because the Bank is in sole possession of records and information relating to the Bank's actions. Finally, Defendants assert that the facts discovered will demonstrate the Bank's bad-faith breach of a promise to restructure CAN's repayment obligations and its failure to mitigate damages.
However, Defendants do not claim that the discovery they seek will cast doubt on the validity of the release and waiver executed in the Forbearance Agreement. Even if the facts to be discovered could support an affirmative defense of "unclean hands" or similar as Defendants argue, any such defense would be unavailing in light of a valid release and waiver. Defendants, therefore, have failed to demonstrate that the specific facts it seeks to discover have any potential to influence the disposition of the Bank's Motion for Partial Summary Judgment. Thus, Defendants' Motion does not meet the standards for a Rule 56(f) motion.
To elaborate, Defendants do not claim to anticipate discovery of evidence of fraud, misrepresentation, or overreaching that induced Mr. Rief to execute the Forbearance Agreement. See Le Clair v. Wells, 395 A.2d 452 (Me. 1978) (valid release will extinguish cause of action, but release may be invalidated if the product of fraud, misrepresentation, or overreaching).
IV. Conclusion
For the foregoing reasons, the Court denies Defendants' Revised Motion to Permit Discovery. Defendants' deadline to respond to the Bank's Motion for Partial Summary Judgment is as provided in the Court's September 27, 2021 Order on Defendants' Expedited Motion to Enlarge Deadline to Respond to Motion for Partial Summary Judgment.
The entry is:
Defendants' Revised Motion to Permit Discovery is DENIED.
The Clerk is directed to incorporate this Order into the docket by reference pursuant to Maine Rule of Civil Procedure 79(a).