Opinion
Civil Action No. 3:99-CV-0697-D
May 23, 2000
MEMORANDUM OPINION AND ORDER
Plaintiff Bank One, Texas, N.A. ("Bank One") sues defendants Capital Associates International, Inc. ("Capital") and Capital Associates, Inc. ("Capital Associates") to recover a $1,324,715.02 payment that it made for the purchase of certain furniture, fixtures, and equipment ("FFE"). The court must decide whether Bank One's claims are barred by res judicata by the final judgment in Bank One, Texas, N.A. v. Prudential Insurance Company of America, et al., Civil Action No. 3:92-CV-0535-D (the "FFE Case"). Concluding that they are, the court grants Capital's motion for summary judgment and raises sua sponte that Capital Associates is entitled to summary judgment in its capacity as guarantor.
I
The history of the FFE Case is discussed extensively in prior published opinions, see Bank One, Tex., N.A. v. Prudential Ins. Co. of Am., 878 F. Supp. 943 (N.D. Tex. 1995) ( "Bank One I"), Bank One, Tex., N.A. v. Prudential Ins. Co. of Am., 939 F. Supp. 533 (N.D. Tex. 1996) ( "Bank One III"), Bank One, Tex., N.A. v. FDIC, 16 F. Supp.2d 698 (N.D. Tex. 1998) ( "Bank One III"), and in unpublished opinions recounted in Bank One III. The court presumes the parties' familiarity with these decisions.
On December 30, 1991, on the eve of filing the FFE Case in Texas state court, BANK One entered into a Purchase Agreement with Capital (as seller) and Capital Associates (as guarantor). Pursuant to the Purchase Agreement, Bank One acquired certain FFE that MBank Dallas, N.A. ("MBank") had conveyed to Capital, and that Capital had leased back to MBank and its parent company, in a sale-leaseback transaction. See Bank One I, 878 F. Supp. at 947. Bank One paid Capital $1,324,715.02 of the $4,750,000 purchase price in accordance with the Purchase Agreement, but made no additional payments.
The Federal Deposit Insurance Corporation removed the case to this court pursuant to 12 U.S.C. § 1819.
Bank One asserted that, under the Purchase Agreement, the FFE Case was a valid ground to suspend further payments to Capital.
Bank One filed the FFE Case in January 1992, suing The Prudential Insurance Company of America ("Prudential") and Texas Commerce Bank, N.A. ("TCB"). Bank One I, 878 F. Supp. at 950. Bank One alleged, in pertinent part, that any liens that Prudential and TCB held in the FFE had been extinguished by full payment, and that Prudential and TCB had no legal or equitable right, title, estate, lien, or interest in the FFE. Id. Bank One requested that Prudential and TCB be ordered to execute and deliver the documents necessary to evidence the termination of their liens or interests in the FFE. Id. Bank One sued Prudential for tortious interference or conspiracy to interfere with Bank One's prospective and existing contractual relations with Capital. Id. at 950-51. Prudential counterclaimed against Bank One and brought a third-party action against the Federal Deposit Insurance Corporation ("FDIC") and Capital. TCB brought an interpleader action by way of counterclaim against Bank One, cross-claim against Prudential, and third-party actions against Capital and the FDIC. Id. at 951. In its corporate capacity and as receiver for MBank, the FDIC counterclaimed against Prudential and TCB and cross-claimed against Capital. Id. Capital crossclaimed against the FDIC, in its corporate capacity, counterclaimed against TCB, and counterclaimed against Prudential. Id. at 952.
The FFE Case was adjudicated in two principal phases during a period of more than six years of litigation. In the first phase, addressed in Bank One I, the court focused "on the right to recover liquidated damages from several million dollars of certificates and proceeds (the 'MCar Assets') that were pledged to secure the performance of MBank . . . under the First Amendment to the Lease ('Lease')" Bank One III, 16 F. Supp.2d at 701. Capital had largely financed its part of the sale-leaseback transaction by borrowing from Prudential, who took a security interest in the FFE, MCar Assets, and relevant transactional documents. Id. at 702. In holding that Capital and Prudential had the right to recover liquidated damages from the MCar Assets, the court concluded, in relevant part, that
[t]he transaction was structured so that MBank and, in turn, the FDIC-Receiver and any successor bank obtained complete and unfettered ownership and use of the FFE. In other words, but for the loss of the MCar Assets — circumstance to which the court will turn below — the FFE Lease was drafted so that when the FDIC took over as receiver, it obtained all the FFE located on the failed bank's premises as if there had been no sale-leaseback transaction, and was able to convey it to the bridge bank.Id. (quoting Bank One I, 878 F. Supp. at 965). The effect of the court's decision was that "MBank, and, in turn, the FDIC, obtained complete and unfettered ownership of the FFE upon MBank's insolvency." Id. (quoting Bank One II, 939 F. Supp. at 539). As a result, Capital effectively lost all claims to ownership of the FFE.
Following the court's decision in Bank One I, Capital attempted to return the $1,324,715.02 payment, plus accrued interest ($2,182,757.59 in total), to Bank One. Bank One refused the tender, asserting that it did not believe there had been a default under the Purchase Agreement. See Bank One II, 939 F. Supp. at 537.
In the second phase of the FFE Case — ultimately resolved by the court's decision in Bank One III — Bank One and the FDIC contested who owned the FFE as between the two of them. See Bank One III, 16 F. Supp.2d at 701 ("The principal question . . . is who owns — as between [Bank One] and [FDIC] — the [FFE] at issue in this litigation."). The court held that the FDIC had conveyed the FFE to Bank One under the terms of a Purchase and Assumption Agreement ("PA Agreement"), by which the FDIC had transferred all deposits and certain liabilities and assets from the MBank receivership estate to the newly-created Deposit Insurance Bridge Bank, which was later renamed Bank One. Id. at 710.
Following the court's ruling in Bank One III, Bank One brought the instant suit against Capital and Capital Associates alleging claims for breach of contract, monies had and received, declaratory judgment, and attorney's fees, contending they are liable for $1,324,715.02 plus interest and attorney's fees. Capital and Capital Associates move for summary judgment on the grounds of res judicata, limitations, waiver, and release.
In conjunction with their reply brief, defendants have filed a supplemental appendix. The court has not considered this document for any purpose because it is impermissible under either the pre-1998 or the present summary judgment rules. See Tovar v. United States, 2000 WL 425170, at *4 n. 8 (N.D. Tex. Apr. 18, 2000) (Fitzwater, J.), appeal docketed, No. 00-10451 (5th Cir. May 1, 2000). By submitting a supplemental appendix, defendants are essentially attempting impermissibly to introduce new evidence at the reply stage, see, e.g., Ds. Rep. Br. at 9, 13 (citing supplemental appendix), which they cannot do.
II
Capital maintains that Bank One's claims are barred by res judicata. Defendants assert in their reply brief that Bank One's action against Capital Associates, the guarantor, is barred because Capital, the principal, is not liable under the Purchase Agreement.Res judicata is an affirmative defense as to which Capital will have the burden of proof at trial. See Rivet v. Regions Bank, 522 U.S. 470, 478 (1998); 18 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4405 (1981). Therefore, to obtain summary judgment, Capital "must establish "beyond peradventure all of the essential elements of the . . . defense.'" Bank One I, 878 F. Supp. at 962 (quoting Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)).
A
The doctrine of res judicata, or claim preclusion, bars litigation of any issue connected with a cause of action or defense that, in the use of diligence, a party might have tried or actually did try. See Ellis v. Amex Life Ins. Co., ____ F.3d ___ 2000 WL 530327, at *3 n. 1. (5th Cir. May 18, 2000). Federal res judicata rules apply to determine the preclusive effect of Bank One's prior claims. See Travelers Ins. Co. v. St. Jude Hosp., 37 F.3d 193, 195 (5th Cir. 1994) (holding that federal res judicata rules applied to diversity claim when resolving preclusive effect of prior litigation also predicated on diversity jurisdiction).
The court's removal jurisdiction in the FFE Case was based on the FDIC's presence as a party. See 12 U.S.C. § 1819. The court's subject matter jurisdiction in the present case is based on diversity of citizenship. Bank One asserted at oral argument that federal res judicata principles control in this case, a contention with which the court agrees.
Res judicata has four elements: (1) the parties must be the same in both cases; (2) the prior judgment must have been rendered by a court of competent jurisdiction; (3) there must be a final judgment on the merits; and (4) the same cause of action must be involved in both cases. See id. (citing Nilsen v. City of Moss Point, Miss., 701 F.2d 556, 559 (5th Cir. 1983) (en bane)). There is no dispute in the briefing that the first three elements — same parties, prior judgment rendered by court of competent jurisdiction, final judgment on the merits — are met with respect to Capital.
In determining whether the fourth element is satisfied, the court utilizes the transactional approach of the Restatement (Second) of Judgments. Ellis ___ F.3d at ___ 2000 WL 530327, at *3; In re Intelogic Trace, Inc., 200 F.3d 382, 386 n. 3 (5th Cir. 2000). The transactional approach provides:
(1) When a valid and final judgment rendered in an action extinguishes the plaintiff's claim pursuant to the rules of merger or bar . . . the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.
(2) What factual grouping constitutes a "transaction," and what groupings constitute a "series," are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.
Restatement (Second) of Judgments § 24. The critical issue is not the relief requested or the theory asserted. The question is instead
whether [the] plaintiff bases the two actions on the same nucleus of operative facts. The rule is that res judicata "bars all claims that were or could have been advanced in support of the cause of action on the occasion of its former adjudication, . . . not merely those that were adjudicated."In re Howe, 913 F.2d 1138, 1144 (5th Cir. 1990) (quoting Nilsen, 701 F.2d at 560).
The res judicata element at issue is whether the causes of action in the FFE Case and the instant suit are the same. To decide this question, the court must apply the transactional test and determine whether Bank One bases its two actions on the same nucleus of operative facts and whether the causes of action in the present lawsuit could have been advanced in the FFE Case. The court agrees with Capital that both components of the test are undisputably met.
1
The essence of Bank One's present suit is that it has been determined to be the rightful owner of the FFE and is therefore entitled to recover liquidated damages (the $1,324,715.02 payment, plus contractual interest) from Capital, guarantied by Capital Associates, because Capital could not deliver the FFE with clear title. See Am. Compl. ¶¶ 9, 10, 11, 14. The FFE Case involved the same nucleus of operative facts. And based on this premise — Bank One wants back the money (plus interest) that it paid to purchase its own property — Bank One could and should have advanced in the FFE Case the causes of action for breach of contract, monies had and received, declaratory judgment, and attorney's fees that it asserts in the present lawsuit.
The FFE Case unquestionably involved the issue of ownership of the FFE. See, e.g., Bank One III, 16 F. Supp.2d at 702-704. Significantly, the predicate for Bank One's causes of action in the FFE Case was claimed ownership of the FFE via the Purchase Agreement. See Bank One I, 878 F. Supp. at 950-51 (noting that Bank One asserted claims in original complaint against Prudential for tortious interference with Bank One's prospective and existing contractual relations with Capital under Purchase Agreement); Bank One II, 939 F. Supp. at 537-38 (noting that Bank One asserted in amended complaint that FDIC repudiated any rights to FFE that survived termination of sale-leaseback transaction and, as a result, Capital was not obligated to transfer title to the FFE, and Bank One properly purchased FFE through Purchase Agreement with Capital); Ds. Br. at 18 ("From Bank One's very first pleading initiating the [ FFE Case], Bank One asserted rights to ownership of the FFE under the Purchase Agreement."). Bank One's counsel acknowledged at oral argument that the FFE Case was originally based on the Purchase Agreement. See Tr. Oral Arg. at 13. Therefore, Bank One's present claims share a similar origin with the ones asserted in the FFE Case.
The court's citation to the argument transcript is based on an unofficial copy and the pagination is subject to change in the final version.
During the early stages of the FFE Case, Bank One and the FDIC were aligned. Bank One did not contend that it obtained the FFE through the PA Agreement with the FDIC; it asserted that it had purchased the FFE from Capital under the Purchase Agreement. Bank One alleged that Prudential tortiously interfered with, or, alternatively, conspired to interfere with, the Purchase Agreement by refusing to execute, and to direct TCB to execute, written releases, thereby allowing Capital to transfer free and clear title to the FFE to Bank One. Bank One I, 878 F. Supp. at 950-51. Bank One conceded at oral argument that, at that juncture, it could have asserted an alternative claim that Capital did not have clear title to the FFE and that Capital had committed a seller default that entitled Bank One to recover liquidated damages. See Tr. Oral Arg. at 17. Therefore, Bank One's present claims are closely related in time and space to the ones litigated in the FFE Case.
As the court pointed out in its unpublished July 30, 1997 memorandum opinion:
This lawsuit has been on file since 1992, but it reached a watershed on March 16, 1995 when the court decided Bank One I. Until that juncture the FDIC's primary interest was in recovering the MCar Assets for the receivership estate and upholding its asserted right to disaffirm the Lease. The FDIC and Bank One had common litigation interests and were parties to a Joint Litigation Agreement. The court has recognized that "[p]rior to that opinion Bank One and the FDIC were sufficiently aligned that the FDIC bad no incentive to develop discovery on matters that now remain to be litigated" May 13, 1997 Order at 1-2. After Bank One I was decided the FDIC altered its approach to the case, seeking to recover from Bank One for its use and alleged conversion of the FFE. The court recognized the disparate nature of the first and second phases of the case in analyzing the effect of the FDIC'S pleadings that Bank One sought to enforce as binding judicial admissions. See Bank One II, 939 F. Supp. at 541. Bank One II represented the first substantive decision that directly addressed the FDIC's and Bank One's claims inter se. Like the FDIC did alter Bank One I, when Bank One was unsuccessful in advancing certain positions in Bank One II it opted to change course, proffering a defense that had not been addressed by the court, that could still be raised, and that might succeed on the merits. This approach is proper.Bank One III, 16 F. Supp.2d at 703-704 (quoting July 30, 1997 Mem. Op. at 5-6)
Although Bank One does not raise this point in its brief, the court recognizes that in its April 28, 1997 order, the court denied Bank One's motion to reinstate its declaratory judgment action that the court had dismissed on September 26, 1996, and allowed Bank One to raise the argument only as a defense to the FDIC's claims for unpaid rent and conversion. See Bank One III, 16 F. Supp.2d at 702. "The court approved Bank One's efforts to establish ownership of the FFE, so long as they were advanced as a defense and not as an affirmative claim for declaratory judgment." Id. at 703. The prohibition against asserting this claim against the FDIC did not, however, affect Bank One's right to allege its present claims against Capital. Moreover, for reasons the court explains in this opinion, Bank One could have asserted its present claims against Capital before the September 26, 1996 dismissal, including in the amended complaint that it filed July 20, 1995.
In Bank One I the court held that title to the FFE had reverted to the FDIC. Bank One I, 878 F. Supp. at 965. This enabled the FDIC to convey the FFE to the bridge bank. Id. "In Bank One II the court held that the FDIC became the owner of the FFE at the time of its appointment as receiver." Bank One III, 16 F. Supp.2d at 703 (quoting July 30, 1997 Mem. Op. at 4-5). The court decided Bank One II on September 26, 1996. Capital was not dismissed from the case until May 13, 1997. During the time that Capital was still a party to the FFE Case, the court unmistakably held that Capital had no tight, title, or interest in the FFE as of December 30, 1991, the date the parties entered into the Purchase Agreement. At that point, Capital could reasonably have expected Bank One to seek liquidated damages from Capital for breach of the Purchase Agreement.
Although the court in Bank One III "alter[ed] the outcome forecast in Bank One II" concerning ownership of the FFE as between the FDIC and Bank One, see Bank One III, 16 F. Supp.2d at 715, the court never varied from its conclusion in Bank One I that Capital was divested of ownership of the FFE at the time of MBank's insolvency.
That Bank One could and should have done so is confirmed by the claims it asserted in the amended complaint that it filed in the FFE Case on July 20, 1995, following issuance of Bank One I. In that pleading, Bank One alleged that it was the rightful owner of the FFE, that Capital had sold the FFE to Bank One, that Capital was obligated to convey title, but that Capital was unable to do so because Prudential and TCB refused to release liens on the title to the FFE. Ds. App. at 81. In count four, Bank One sought a permanent injunction to prohibit Capital from transferring title to the FFE to the FDIC. Id. at 86. Bank One could have, but did not, allege claims for recovery of liquidated damages under the Purchase Agreement. Those causes of action would have formed a convenient trial unit with Bank One's other FFE-related claims and should have been asserted as part of the FFE case.
Bank One argues that it could not have litigated its claims until the present suit because the court did not issue a final judgment on the ownership of the FFE in its summary judgment decisions. The court rejects this assertion as controlling the res judicata analysis. On August 15, 1995 Capital, the FDIC, Prudential, and TCB filed in the FFE Case ajoint motion regarding settlement of claims. Ds. App. at 136. Bank One admitted at oral argument that the settlement represented the final resolution of ownership of the FFE. See Tr. Oral Arg. at 20 ("Capital remained a company that potentially owned the FFE until the final resolution by settlement." (emphasis added)). The motion included an executed confirmatory Bill of Sale by which Capital transferred title to the FFE to the FDIC as receiver for MBank. Ds. App. at 111. Capital could therefore no longer convey title to the FFE to Bank One. The interlocutory nature of the court's decisions did not alter this result.
As the court noted in its unpublished July 30, 1997 memorandum opinion in the FFE Case, "Bank One II primarily involved . . . the effect of transactions and acts concerning the FFE and the equipment lease ("Lease') that had occurred after March 29, 1989, particularly the FDIC's attempt to repudiate the Lease on September 13, 1989 and Bank One's agreement to purchase the FFE from [Capital]." Bank One III, 16 F. Supp.2d at 703 (quoting July 30, 1997 Mem. Op. at 3-4). Those transactions were all motivated by Bank One's desire to obtain ownership of the FFE. The court concludes that Bank One's present claims arise out of the same transaction or series of transactions as the ones asserted in the FFE Case.
Bank One's opposition to the res judicata defense appears to rest on four premises: (1) the FFE Case was neither intended to, nor did it, affect Bank One's claims in the present suit against Capital; (2) the FFE Case involved different subject matter, different agreements, and different periods; (3) Bank One could not have effectively litigated its claims before the court ultimately decided in Bank One III that Bank One owned the FFE; and (4) § 8.10 of the Purchase Agreement expressly permitted Bank One to bring its liquidated damages claims at any time it so desired.
Bank One raised this last premise for the first time at oral argument. See Tr. Oral Arg. at 10.
Bank One's first contention fails because regardless whether this court's decision in the FFE Case was intended to or did affect Bank One's present claims against Capital, the cases involve the same nucleus of operative facts and Bank One could have sued Capital to recover liquidated damages for a seller default. Nor does the court agree with Bank One's second argument. Despite the fact that the FFE Case involved a greater number of issues and parties than does the present one, the two overlap when it comes to Bank One's claimed entitlement to ownership of the FFE under the Purchase Agreement.
The court also concludes that Bank One's third premise lacks force. Relying on three bankruptcy cases, Bank One maintains that the FFE Case did not enable it effectively to litigate its claims against Capital until the court resolved in Bank One III the issue of FFE ownership. The cases that Bank One cites in its brief are either distinguishable or support applying res judicata.
Bank One cites D-I Enterprises, Inc. v. Commercial State Bank, 864 F.2d 36, 39-40 (5th Cir. 1989) (on rehearing), but that case addressed whether an agreed order entered in a contested bankruptcy hearing had preclusive effect over a debtor's subsequent lender liability claims. Id. The outcome of that case turned on an interpretation of the Bankruptcy Code and Rules and is inapposite here. The powers of a federal district court effectively to litigate a claim differ materially from those of a bankruptcy court. Bank One has not presented a compelling reason why this court could not have effectively litigated Bank One's present claims during the FFE Case.
In re Baudoin, 981 F.2d 736, 743 (5th Cir. 1993), supports the application of res judicata in the present case. In Baudoin a debtor's lender liability claims were held barred by res judicata where the contracts that gave rise to the claims were the same loan agreements that were the basis of the creditor's proof of claim in the prior bankruptcy. Id. The panel held that the lender liability claims shared a common nucleus of operative facts with matters litigated in prior bankruptcy proceedings and were therefore properly precluded. Id. This court has held in the instant case that Bank One's claims also share a common nucleus of operative facts with matters previously litigated in the FFE Case and are properly barred.
Howe also supports applying res judicata to foreclose Bank One's claims. That case held that "when a confirmed [bankruptcy] plan discloses and specifically treats a creditor's claim, and the debtor has had full opportunity to contest the creditor's claim in an adversary proceeding that is, in effect, settled in the plan, the debtor cannot collaterally attack the bankruptcy court's decision . . . later in an action based on the same transaction." Howe, 913 F.2d at 1147. Bank One's claims were readily apparent during the course of the FFE Case. It had a full and fair opportunity to litigate them, but failed to do so.
The Fifth Circuit's recent opinion in Intelogic Trace supports applying res judicata. In that case the court affirmed the application of res judicata to bar a trustee's malpractice claims against an accounting firm that rendered bankruptcy-related services. Intelogic Trace, 200 F.3d at 388-91 The circuit court upheld the district court's conclusion that res judicata applied because the bankrupt company's Board of Directors failed to raise the claims during a fee application hearing in a prior bankruptcy proceeding. Id. The panel held that the claims could and should have been brought during the prior bankruptcy proceedings even though the Board may not have been aware of the precise facts or reached a firm conclusion on the performance of the accounting firm. Id. at 389. The claims were barred because the Board "had sufficient general awareness of the real potential for claims against [the accounting firm]." Id. The reasoning of Intelogic Trace would fail under Bank One's theory of res judicata. Moreover, Bank One admitted at oral argument that it could have asserted the instant claims in its amended complaint filed in the FFE Case. See Tr. Oral Arg. at 17.
Nor does Bank One's fourth argument persuade the court that res judicata does not apply. Section 8.10 of the Purchase Agreement states that "[n]o course of dealing between the parties hereto, nor any delay in exercising any rights or remedies under this Agreement or otherwise shall operate as a waiver of any of the rights and remedies of any party hereto." Ds. App. at 26. Capital does not assert, however, that Bank One has waived any rights in this case. Capital moves for summary judgment based on res judicata. Bank One has cited no persuasive authority for the proposition that such an agreement alters the res judicata analysis. Accordingly, the court holds that § 8.10 of the Purchase Agreement does not preclude this defense.
Capital has established as a matter of law that Bank One's causes of action are barred by the affirmative defense of res judicata.
III
The court raises sua sponte that Capital Associates is entitled to summary judgment as guarantor because Capital as principal is not liable under the Purchase Agreement. See, e.g., Savin Corp. v. Copy Distrib. Co., 716 S.W.2d 690, 692 (Tex.App. 1986, no writ) ("Unless the contract provides otherwise, the liability of the guaranty is measured by the liability of the principal. If the principal is not liable, then the guarantor may not be held."). The court recognizes that defendants asserted this ground for summary judgment, see Ds. Rep. Br. at 8 n. 6., and that Bank One appears to have conceded the argument, see P. Br. at 15 (stating that "Capital Associates, Inc.'s obligations therefore are coterminant with Capital's obligations."). Because (1) Capital Associates did not clearly present this argument until the reply brief, (2) the court will not consider a ground first raised in a reply brief, see Senior Unsecured Creditors' Comm. of First RepublicBank Corp. v. FDIC, 749 F. Supp. 758, 772 (N.D. Tex. 1990) (Fitzwater, J.). (3) it is error to grant summary judgment on a ground not properly raised, see John Deere Co. v. American Nat'l Bank, Stafford, 809 F.2d 1190, 1192 (5th Cir. 1987), and (4) Bank One's counsel stated during oral argument that although it is hard to go after the guarantor if the principal is not liable, he had not studied the guaranty language to see if there was something that would affect that principal, see Tr. Oral Arg. at 24, the court will not decide the question without permitting Bank One to respond.
Accordingly, based on today's decision and Savin, the court raises sua sponte that Capital Associates is entitled to summary judgment because Bank One's claims against Capital are barred by res judicata. Bank One shall have 20 days from the date this memorandum opinion and order is filed to file an opposition response. By conceding, if it does, that the court's decision today entitles Capital Associates to summary judgment, Bank One will not be waiving its right to appeal today's ruling. Capital Associates shall not be entitled to file a reply brief unless the court requests one.
* * *
The court grants Capital's motion for summary judgment and raises sua sponte that Capital Associates is entitled to summary judgment. The court will defer entering a judgment until it considers any briefing concerning Capital Associates' right to summary judgment. SO ORDERED.
In view of this disposition, the court does not reach the other grounds for summary judgment set out in defendants' motion.
.