Wells Fargo Bank N.A. v. KT Mechanical Contractors, Inc. et al

Filing 35

MEMORANDUM OPINION. Signed by Judge Alexander Williams, Jr on 12/28/2011. (ranks, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOUTHERN DIVISION

WELLS FARGO BANK, NATIONAL
ASSOCIATION,
Plaintiff,
v.

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Civil Action No. 11-cv-00850-AW

KT MECHANICAL CONTRACTORS,
INC. et al.,
Defendants.
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Memorandum Opinion
Currently pending before the Court is Plaintiff Wells Fargo Bank N.A. (“Wells Fargo”)’s
motion for summary judgment against Defendant George Tsakanikas. Wells Fargo brought this
action against Defendants KT Mechanical Contractors, Inc. (“KT”), KPT, LLC (“KPT”),
Catherine Tsakanikas, Peter Tsakanikas, and George Tsakanikas to collect on three loans made
by Wells Fargo. The Court has already granted Plaintiff’s motion as to all Defendants but George
Tsakanikas, due to the difficulty Plaintiff encountered in serving George Tsakanikas with
process. See Doc. No. 24. The Court has reviewed the entire record, as well as the pleadings and
exhibits, and finds that no hearing is necessary. See Local Rule 105.6 (D. Md. 2010). For the
reasons set forth below, the Court GRANTS Plaintiff’s motion for summary judgment against
George Tsakanikas.

I.

FACTUAL & PROCEDURAL BACKGROUND
The following facts are taken from the Court’s prior Memorandum Opinion. Three

Promissory Notes are the subject of this lawsuit: (1) a $350,000 Promissory Note dated

November 7, 2006, (“Note 1”) executed by KTM in favor of Wachovia Bank, N.A.
(“Wachovia”); (2) a $250,000 Promissory Note dated November 7, 2006 executed by KTM in
favor of Wachovia (“Note 2”); and (3) a $205,790.29 Promissory Note dated August 2, 2006
executed by KPT and made payable to Wachovia (“Note 3”). All Defendants, including George
Tsakanikas, personally and unconditionally guaranteed repayment of the KTM Loans and the
KPT Loan. The borrowers and Guarantors did not pay the amounts due under the Loans.
On or around September 1, 2001, First Union merged with Wachovia, and on or around
March 20, 2010, Wachovia merged with Wells Fargo. As a result of these mergers, Wells Fargo
is the successor to First Union and Wachovia with respect to the loan documents evidencing the
obligations of George Tsakanikas.
In his Answer to Wells Fargo’s Complaint, George Tsakanikas admits he executed the
respective Notes, Guaranties, and Security Agreement. See George Tsakanikas Answer at ¶¶ 1013, 16-17. Note 1 is payable on demand. See Doc. No. 1 Ex. 1 at 3. Tsakanikas admits that Wells
Fargo made a demand for payment, George Tsakanikas Answer ¶ 25, and does not assert
satisfaction on Note 1.
Note 2 states that if KTM fails to timely pay any obligation due to Wells Fargo, the Loan
is in default. See Doc. No. 1 Ex. 2 at 3. The Guaranties of the KTM loans provide that:
Guarantor hereby absolutely, irrevocably and unconditionally guarantees to Bank and its
successors, assigns and affiliates the timely payment and performance of all liabilities
and obligations of Borrower to Bank and its affiliates, including, but not limited to, all
obligations under any notes, loan agreements . . . however and whenever incurred or
evidenced . . .

Doc. No. 1 Ex. 4 at 1; Ex. 6 at 1. The Guarantees provide that “failure of timely payment or
performance of the [KTM Loans] or a default under any Loan Document” results in the KTM
loans being immediately due and payable to Wells Fargo. See Doc. No. 1 Ex. 4 at 3; Ex. 6 at 3.
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Wells Fargo alleges that Defendants, including George Tsakanikas, have failed to satisfy the
loan, and George Tsakanikas does not allege that he or the other Defendants have satisfied the
loan.
The KPT Note, Note 3, provides that “failure of timely performance or payment . . . any
default in payment or performance of any obligation under any loans, contracts or agreements of
[KPT] with [Wells Fargo] . . .” results in a default under Note 3. See Doc. No. 1 Ex. 5 at 3. Wells
Fargo contends that the loan has not been satisfied and that the loan is in default, and
Defendants, including George Tsakanikas, do not contend that the loan is not in default or that
they have satisfied the loan.
On March 31, 2011, Wells Fargo brought this action against all Defendants to collect on
the loans. See Doc. No. 1. On September 14, 2011, Wells Fargo moved for summary judgment
under Federal Rule of Civil Procedure 56 against all Defendants but George Tsakanikas, who
Wells Fargo was still attempting to serve with process.1 In support of its motion, Wells Fargo
attached the affidavit of James P. Buffington, an employee and Portfolio Manager of Wells
Fargo. See Doc. No. 14 Ex. 1. The Court granted Wells Fargo’s motion and entered judgment
against all Defendants but George Tsakanikas. See Doc. No. 24. Wells Faro subsequently served
George Tsakanikas by publication. See Doc. No. 25. Wells Fargo now moves for summary
judgment against George Tsakanikas.

II.

STANDARD OF REVIEW
Summary judgment is only appropriate “if the pleadings, the discovery and disclosure

materials on file, and any affidavits show that there is no genuine issue as to any material fact
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On August 13, 2011, the Court granted Wells Fargo’s motion to extend the deadline for service on George
Tsakanikas to October 30, 2011. Wells Fargo established that it made as many as 12 efforts to serve process on
George Tsakanikas, to no avail.

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and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); see Celotex
Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). The Court must “draw all justifiable inferences in
favor of the nonmoving party, including questions of credibility and of the weight to be accorded
to particular evidence.” Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).
To defeat a motion for summary judgment, the nonmoving party must come forward with
affidavits or other similar evidence to show that a genuine issue of material fact exists. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A disputed fact
presents a genuine issue “if the evidence is such that a reasonable jury could return a verdict for
the non-moving party.” Anderson, 477 U.S. at 248. Although the Court should believe the
evidence of the nonmoving party and draw all justifiable inferences in his or her favor, a party
cannot create a genuine dispute of material fact “through mere speculation or the building of one
inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985).

III.

ANALYSIS
Wells Fargo asserts claims against George Tsakanikas (“Tsakanikas”) for breach of

contract relating to Defendants’ default on their loan obligations. In granting summary judgment
against KT, KPT, Peter Tsakanikas and Catherine Tsakanikas, the Court found that Defendants
raised no genuine issue as to any material fact regarding their loan obligations. George
Tsakanikas has similarly failed to raise any genuine issue as to his liability pursuant to his
Guaranties on the loan agreements. The pleadings, admissions, and affidavits in this case show
that: (1) Tsakanikas executed two agreements guaranteeing repayment of the loans; (2) failure of
Tsakanikas and the other Defendants to satisfy the loans resulted in default on those loans; and

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(3) Defendants, including Tsakanikas, are jointly and severally liable under the Notes and
Guaranties.
Tsakanikas does not contest liability but, rather, argues that there is a genuine dispute
regarding the amount due. First, Tsakanikas has provided a recent billing statement as to Note 1
in which Wells Fargo does not demand payment of the full amount of the loan. See Doc. No. 33
Ex. 2. Tsakanikas argues that this statement casts into doubt the amount due under Note 1. The
Court disagrees. This automated billing notice is insufficient to create a genuine issue of material
fact as to Tsakanikas’s liability given that the loan documents signed by Tsakanikas clearly
delineate the amount of the loan and provide that if the loan is in default, Wells Fargo may
demand full payment without other notice. Wells Fargo has made a proper demand for payment
in full. See Doc. No. 1 Ex. 7. Judging by the date on the automated billing statement, Tsakanikas
had already filed an Answer in this lawsuit by the time he received it. Accordingly, the billing
statement does not satisfy, reduce, or otherwise abrogate Tsakanikas’s liability on the loan.
Second, Tsakanikas contends that he is entitled to a credit for rents received by Wells
Fargo from his tenants as well as the proceeds recovered under the foreclosure sale, and that he
needs the opportunity to conduct discovery to determine the amount of the credit due. None of
these contentions, which relate to satisfaction of the debt rather than liability as to the amount
owed, render summary judgment improper. As to the credit from the foreclosure sale, it appears
from Tsakanikas’s own filings, see Doc. No. 33 Ex. 6 at 4, that the sale has not been ratified and
thus the proceeds received from the foreclosure have not yet been applied to the outstanding
balance due under the loans. As soon as the foreclosure sale is ratified, Wells Fargo has been
ordered to apply the proceeds received from the foreclosure sale to amounts owed by
Defendants. See Doc. No. 24 at 2. Similarly, to the extent it has not already, Wells Fargo is

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obligated to apply any proceeds received from Tsakanikas’s tenants to the amount due under the
loans.
In sum, Tsakanikas has failed to provide any evidence of a disputed material fact, and
thus summary judgment in favor of Wells Fargo is proper.

IV.

CONCLUSION
For the foregoing reasons, Wells Fargo’s motion for summary judgment is GRANTED.

A separate order will follow.

December 28, 2011
Date

/s/
Alexander Williams, Jr.
United States District Judge

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