PORTLAND REGENCY INC et al v. RBS CITIZENS NA et al

Filing 23

DECISION AND ORDER ON PLAINTIFFS' MOTION TO AMEND COMPLAINT AND DEFENDANTS' MOTION TO DISMISS - granting 17 Motion for Permission to File First Amended Complaint ; denying 16 Motion to Dismiss. Reminder: After entry of this Order, the plaintiffs shall separately file the First Amended Complaint document as a separate entry on the Court's docket. By JUDGE D. BROCK HORNBY. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
PORTLAND REGENCY, INC.
TOP OF EXCHANGE, LLC,

)
)
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PLAINTIFFS
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v.
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RBS CITIZENS, N.A. AND CITIZENS )
BANK NEW HAMPSHIRE,
)
)
DEFENDANTS
)
AND

NO. 2:12-CV-408-DBH

DECISION AND ORDER ON PLAINTIFFS’ MOTION TO AMEND
COMPLAINT AND DEFENDANTS’ MOTION TO DISMISS
I treat the plaintiffs’ response to the defendants’ motion to dismiss as a
motion for permission to file their proposed First Amended Complaint and I
GRANT that motion over the defendants’ opposition expressed in their Reply at
note 6. Defs.’ Reply to Pls.’ Opp’n to Mot. to Dismiss (“Defs.’ Reply”) at 11 n.6
(ECF No. 22).
I do agree with the defendants that on their motion to dismiss I am able
to consider the loan/swap documents on which all three counts of the
plaintiffs’ amended complaint depend. See Alt. Energy, Inc. v. St. Paul Fire &
Marine Ins. Co., 267 F.3d 30, 34 (1st Cir. 2001).
I am also highly doubtful that this Court can determine the Prepayment
and Early Termination Fees in the first instance, both because of the language
of the documents and because the plaintiffs have never elected to terminate the

agreements and there is therefore no termination date upon which to base fees.
But reading the First Amended Complaint in a light favorable to the plaintiffs, I
conclude that they have alleged that the defendants have repeatedly
misinterpreted the documents in informing the plaintiffs in the past what the
Prepayment and Early Termination Fees would be if they were to terminate.
Pls.’ [Proposed] First Am. Compl. ¶¶ 2, 35, 63 (ECF No. 17-1). The defendants
disagree, but I cannot resolve that disagreement at this stage.

I am not

prepared to say on a motion to dismiss that declaratory judgment is
unavailable on the proper interpretation of the documents, or that the First
Amended Complaint does not adequately allege that the defendants have
intentionally or negligently misrepresented facts in informing the plaintiffs
what the fees would be—facts that were material to the plaintiffs’ decision
whether to terminate—and that as a result the plaintiffs decided not to
terminate in justifiable reliance on how the defendants performed their
calculations.
I realize that the defendants assert that there is no contractual obligation
to calculate fees before the plaintiffs decide to terminate and that the numbers
previously given therefore were only estimates, not the formal calculations
required by the documents. Defs.’ Reply at 5 n.3, 11. But the plaintiffs have
not alleged that they asked for and received estimates.

Instead, the First

Amended Complaint says that the defendants presented these numbers to the
plaintiffs as calculations of the Prepayment and Early Termination Fees. First

2

Am. Compl. ¶¶ 2, 16, 26.

I must accept the plaintiffs’ allegations on this

12(b)(6) motion.
The defendants’ 12(b)(6) motion to dismiss is therefore DENIED.
It is clear, however, that the parties and/or their lawyers should meet
and confer to determine whether there truly is disagreement over the
methodology for calculating the Prepayment and Early Termination Fees. This
dispute is all about money, and a lengthy lawsuit will certainly cost more.
SO ORDERED.
DATED THIS 7TH DAY OF MAY, 2013
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

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