CIBC INC. v. GRANDE VILLAGE LLC et al
Filing
68
OPINION. Signed by Judge Noel L. Hillman on 9/29/2015. (dmr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
CIBC INC., et al.,
Plaintiffs,
Civ. No. 14-5047 (NLH/JS)
OPINION
v.
GRANDE VILLAGE LLC, et al.,
Defendants.
Appearances:
DAVID L. BRAVERMAN
BENJAMIN ALEX GARBER
PETER J. LEYH
BRAVERMAN KASKEY, P.C.
ONE LIBERTY PLACE, 56TH FLOOR
1650 MARKET STREET
PHILADELPHIA, PA 19103
Attorneys for plaintiffs
ADAM K. DERMAN
DAVID M. DUGAN
WOLFF & SAMSON, P.C.
THE OFFICES OF CRYSTAL LAKE
ONE BOLAND DRIVE
WEST ORANGE, NJ 07052
Attorneys for defendants
HILLMAN, District Judge
This is a breach of contract case involving various loan
and mortgage documents secured for a retail space in New Jersey.
Plaintiffs filed a motion to dismiss Defendants’ counterclaims.
1
For the reasons explained below, Plaintiffs’ motion will be
granted in part and denied in part.
I.
FACTUAL BACKGROUND
Between September 2007 and November 2008, plaintiff CIBC
extended three credit facilities to Grande Village LLC, Grande
Properties, LLC, Willingboro Town Center Urban Renewal North,
LLC, and Willingboro Town Center North Manager, LLC (the
“Borrowers”) totaling $46.8 million.
On or about July 20, 2011,
the Borrowers, William T. Juliano, and Thomas E. Juliano
(collectively, “Defendants”) entered into five new agreements
with CIBC: a mortgage modification and cross-collateralization
agreement, three separate loan modification agreements, and a
Loan Sale Agreement.
Pursuant to the loan modification agreements, the maturity
date for each loan was extended to May 10, 2013. Defendants
could further extend the maturity dates on the loans by one year
increments provided that they satisfied a variety of conditions.
The most relevant conditions for maturity date extensions were
that William and Thomas Juliano (the “Juliano Parties”), as
guarantors of the loans, maintain a net worth of $15 million and
provide periodic financial information to CIBC.
2
Before the May
10, 2013 maturity date, CIBC permitted Defendants to further
extend the maturity dates on the loans to May 10, 2014.
Under the Loan Sale Agreement, the Juliano Parties were
given priority bidding rights on the loans.
Specifically, if
CIBC is considering the sale of the loans it must give the
Juliano Parties a Potential Loan Sale Notice.
If the Juliano
Parties submit a “Juliano bid” within 30 days which meets
certain requirements, CIBC is not permitted the sell the loans
to a third party for less than their offer.
The Loan Sale
Agreement also provides that if a Juliano bid is not submitted
within 30 days following the Potential Loan Sale Notice or the
bid does not comply with the bid requirements, the agreement is
void.
On March 3, 2014, CIBC issued letters to Defendants
notifying them that the loans were in default as a result of the
failure of William and Thomas Juliano to maintain a minimum net
worth of $15 million.
On April 9, 2014, Defendants responded by
stating that they would seek to extend the May 10, 2014 maturity
date to May 10, 2015.
On April 17, 2014, CIBC responded that
Defendants had not met the requirements for a further extension
as a result of failing to cure their technical defaults.
3
Defendants maintain that CIBC’s declarations of technical
default were in error because, as of March 3, 2014, Defendants
had provided the financial information requested by CIBC and
maintained the minimum net worth required.
On April 28, 2014, Defendants sued CIBC for breach of
contract.
That action was removed to this Court on or about
June 2, 2014 in a related action.1
On August 12, 2014, CIBC
commenced this action to recover the amounts due on the loans.
On or about September 15, 2014, pursuant to the Loan Sale
Agreement, CIBC sent Defendants the Potential Loan Sale Notice,
inviting them to submit a Juliano bid within 30 days.
On
October 6, 2014, Defendants filed an emergency application to
enjoin CIBC from selling the loans in the related action.
Court denied Defendants’ application.
This
See Grande Village LLC v.
CIBC, Inc., No. 14-3495 [Doc. No. 23].
On November 4, 2015, 50 days following submission of the
Potential Loan Sale Notice, CIBC informed Defendants that as a
result of their failure to submit a Juliano Bid within 30 days
following the Potential Loan Sale Notice, the Loan Sale
Agreement was null and void.
Defendants contend that they were
1
See Grande Village LLC v. CIBC, Inc., No. 14-3495 (NLH/JS).
4
unable to exercise their priority bidding rights to due to
CIBC’s breaches and lawsuit.
On November 28, 2014, Defendants
filed the instant counterclaims.
II.
JURISDICTION
This case was removed to federal court on grounds of
diversity.
Plaintiff CIBC is a corporation organized and
existing under the laws of Delaware, and has its principal place
of business in New York, New York.
Plaintiff Canadian Imperial
Bank of Commerce is a branch office of Canadian Imperial Bank of
Commerce, a banking corporation organized under the laws of
Canada with its principal place of business in Toronto, Ontario,
Canada.
Defendants Grande Village LLC, Grande Properties, LLC,
Willingboro Town Center Urban Renewal North, LLC, and
Willingboro Town Center North Manager, LLC are limited liability
companies organized and existing under the laws of the State of
New Jersey.
The sole members of each of the LLCs are defendant
William T. Juliano, who is a citizen of the State of Florida,
and defendant Thomas E. Juliano, who is a citizen of the State
of New Jersey.
5
There is complete diversity between the Plaintiffs and
Defendants and, therefore, this Court exercises subject matter
jurisdiction pursuant to 28 U.S.C. § 1332.
III. STANDARD FOR MOTION TO DISMISS
When considering a motion to dismiss a complaint for
failure to state a claim upon which relief can be granted
pursuant to Federal Rule of Civil Procedure 12(b)(6), a court
must accept all well-pleaded allegations in the claim as true
and view them in the light most favorable to the claimant.
Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005); MCI
Telecommunications Corp. v. Graphnet, Inc., 881 F. Supp. 126,
128 (D.N.J. 1995).
It is well settled that a pleading is
sufficient if it contains “a short and plain statement of the
claim showing that the pleader is entitled to relief.”
Civ. P. 8(a)(2).
Fed. R.
However, “[a]lthough the Federal Rules of
Civil Procedure do not require a claimant to set forth an
intricately detailed description of the asserted basis for
relief, they do require that the pleadings give defendant fair
notice of what the plaintiff’s claim is and the grounds upon
which it rests.”
Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S.
147, 149-50 n.3 (1984) (quotation and citation omitted).
6
A district court, in weighing a motion to dismiss, asks
“‘not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the
claims.’”
Bell Atlantic v. Twombly, 550 U.S. 544, 563 n.8
(2007) (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974));
see also Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our
decision in Twombly expounded the pleading standard for ‘all
civil actions’ . . . .”); Fowler v. UPMC Shadyside, 578 F.3d
203, 210 (3d Cir. 2009) (“Iqbal . . . provides the final nailin-the-coffin for the ‘no set of facts’ standard that applied to
federal complaints before Twombly.”).
Following the Twombly/Iqbal standard, the Third Circuit has
outlined a three-part analysis in reviewing a complaint under
Rule 12(b)(6).
First, the Court must take note of the elements
needed for plaintiff to state a claim.
Santiago v. Warminster
Tp., 629 F.3d 121, 130 (3d Cir. 2010).
Second, the factual and
legal elements of a claim should be separated; a district court
must accept all of the complaint's well-pleaded facts as true,
but may disregard any legal conclusions.
Id.; Fowler, 578 F.3d
at 210 (citing Iqbal, 129 S. Ct. at 1950).
Third, a district
court must then determine whether the facts alleged in the
7
complaint are sufficient to show that the plaintiff has a
plausible claim for relief.
Id.
A complaint must do more than
allege the plaintiff's entitlement to relief.
Fowler, 578 F.3d
at 210; see also Phillips v. Cnty. of Allegheny, 515 F.3d 224,
234 (3d Cir. 2008) (stating that the “Supreme Court’s Twombly
formulation of the pleading standard can be summed up thus:
stating . . . a claim requires a complaint with enough factual
matter (taken as true) to suggest the required element. This
does not impose a probability requirement at the pleading stage,
but instead simply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence of the necessary
element”) (internal quotations and citations omitted).
A court
need not credit either “bald assertions” or “legal conclusions”
in a complaint when deciding a motion to dismiss.
In re
Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d
Cir. 1997).
Finally, a court in reviewing a Rule 12(b)(6) motion must
only consider the facts alleged in the pleadings, the documents
attached thereto as exhibits, and matters of judicial notice.
S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd.,
181 F.3d 410, 426 (3d Cir. 1999).
A court may consider,
8
however, “an undisputedly authentic document that a defendant
attaches as an exhibit to a motion to dismiss if the plaintiff’s
claims are based on the document.”
Pension Benefit Guar. Corp.
v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
1993).
IV.
DISCUSSION
Plaintiffs move to dismiss Defendants’ counterclaims on the
grounds that: (1) the New Jersey Consumer Fraud Act does not
apply; (2) Defendants fail to state a claim for breach of
contract; and (3) Defendants fail to state a claim for breach of
the implied covenant of good faith and fair dealing.
A. New Jersey Consumer Fraud Act
The New Jersey Consumer Fraud Act (“CFA”) provides a cause
of action to “[a]ny person who suffers any ascertainable loss of
moneys or property, real or personal, as a result of the use or
employment by another person of any method, act, or practice
declared unlawful under this act ... [.]”
N.J. Stat. Ann. §
56:8–19. To state a cause of action under the CFA, a plaintiff
must allege: “(1) an unlawful practice by the defendants; (2) an
ascertainable loss by plaintiff; and (3) a causal nexus between
the first two elements — defendants’ allegedly unlawful behavior
9
and the plaintiff’s ascertainable loss.”
New Jersey Citizen
Action v. Schering-Plough Corp., 367 N.J. Super. 8, 13 (App.
Div. 2003) (citing Cox v. Sears Roebuck & Co., 138 N.J. 2, 24
(1994)).
An “unlawful practice” may be an affirmative act, a
knowing omission, or a regulatory violation. Parker v. Howmedica
Osteonics Corp., No. 07-02400, 2008 WL 141628, at *2 (D.N.J.
Jan. 14, 2008) (citing Cox, 138 N.J. at 18).
The CFA only applies to sales of real estate and sales of
merchandise.
N.J. Stat. Ann. § 56:8-2.
The term “merchandise”
is defined in the statute to “include any objects, wares, goods,
commodities, services or anything offered, directly or
indirectly to the public for sale.”
1(c).
N.J. Stat. Ann. § 56:8-
In this context, “the public” refers to “the public at
large.” Princeton Healthcare Sys. v. Netsmart New York, Inc.,
422 N.J. Super. 467, 473 (App. Div. 2011) (citing Finderne Mgmt.
Co. v. Barrett, 402 N.J. Super. 546, 570 (App. Div. 2008);
Marascio v. Campanella, 298 N.J. Super. 491, 499 (App. Div.
1997)).
The Third Circuit concluded that “the entire thrust of
the Consumer Fraud Act is pointed to products and services sold
to consumers in the popular sense.”
J & R Ice Cream Corp. v.
California Smoothie Licensing Corp., 31 F.3d 1259, 1272 (3d Cir.
10
1994) (citation omitted).
Additionally, the New Jersey Supreme
Court concluded that the term “merchandise” includes the sale of
consumer credit.
Lemelledo v. Benefit Mgmt. Corp., 150 N.J.
255, 265 (1997) (internal citations omitted); U.S. Land Res., LP
v. JDI Realty LLC, No. 08-5162, 2009 WL 2488316, at *19 (D.N.J.
Aug. 12, 2009).
However, while “the language of the CFA clearly
establishes that the CFA applies to certain types of credit, it
does not establish that it applies to all provisions of credit.”
U.S. Land Res., 2009 WL 2488316, at *20.
Accordingly, CFA
applicability to a transaction requires a case-by-case analysis.
Papergraphics Int'l, Inc. v. Correa, 389 N.J. Super. 8, 13 (App.
Div. 2006).
In making the determination as to whether the CFA
applies to a transaction courts consider the position of the
parties in the transaction, the extent of the parties’
negotiations, and the nature of the merchandise at issue.
For example, in Princeton Healthcare Sys., 422 N.J. Super.
467 (App. Div. 2011), the parties negotiated a contract to
upgrade Princeton Healthcare System’s (PHCS) computer system.
In order to assess its needs, PHCS hired a computer consultant
to prepare proposals for the project.
Id. at 469.
The parties
engaged in a two year process of proposal evaluations and PHCS
11
eventually entered into a contract with Netsmart, a computer
software company.
Id. at 470.
After significant delays, PHSC
sued Netsmart for breach of contract and violations of the CFA.
Id.
The court found that the parties’ contract could not
provide a basis for a CFA claim.
Id. at 474.
The court focused
on the fact the contract concerned a custom product and was the
result of a two year negotiation involving a consultant.
Id.
The court found that “[t]his kind of heavily negotiated contract
between two sophisticated corporate entities does not constitute
a ‘sale of merchandise’ within the intent of the CFA.” Id.2
Similar to the facts of this case, Prof'l Cleaning &
Innovative Bldg. Servs., Inc. v. Kennedy Funding, Inc., No. 052384, 2009 WL 1651131 (D.N.J. June 12, 2009) aff'd, 408 F. App'x
566 (3d Cir. 2010), concerned a commercial real estate financing
transaction.
The court found that the CFA did not apply to the
transaction because the parties were "experienced commercial
entities with relatively equal bargaining power.”
Id. at *4.
See also Finderne Mgmt. Co. v. Barrett, 402 N.J. Super. 546 (App.
Div. 2008) (employers’ participation in tax avoidance program did
not constitute a consumer transaction under the CFA; the program
was not a single transaction and the employers were not
"unsophisticated buyers"); Stockroom, Inc. v. Dydacomp Dev. Corp.,
941 F. Supp. 2d 537 (D.N.J. 2013) (sophistication refers to the
sophistication of the parties in the transaction at issue).
2
12
The court noted that the loan was not the type sold to the
general public and contained unconventional financing features.
Id. at *5.
Relevant to court’s analysis was that the parties
negotiated the loan commitment and Professional Cleaners was not
a “first-time buyer” in real estate, “suffering a disparity of
industry knowledge, victimized after being lured into this
purchase[.]” Id.
Similarly, U.S. Land Res., LP v. JDI Realty LLC, No. 085162, 2009 WL 2488316 (D.N.J. Aug. 12, 2009), concerned the
purchase of a commercial warehouse through a second mortgage and
involved the transfer of a partnership interest as security.
The court found that while the New Jersey Supreme Court has
applied the CFA to offers of credit it should not apply to the
transaction at issue because the parties engaged in “extensive
negotiations unique to a particular property and craft[ed] a
novel financing structure involving the transfer of partnership
interests as security, [which] does not reflect ‘the ordinary
meaning of the consumer in the marketplace.’”
Id. at *20
(citing J & R Ice Cream Corp., 31 F.3d at 1273); see also
JPMorgan Chase Bank, N.A. v. Gaspar, No. A-4652-12T4, 2014 WL
6991728, at *3 (N.J. Super. Ct. App. Div. Dec. 12, 2014)
13
(affirming trial court determination that the CFA did not apply
because condominium building mortgage was not part of a consumer
transaction; property owner had numerous commercial investment
properties and was a sophisticated property owner).
Plaintiffs argue Defendants’ CFA counterclaim should be
dismissed because: (1) the CFA does not apply to heavily
negotiated commercial transactions; (2) it fails to state a
claim because the purported losses are purely speculative; and
(3) it fails to allege a causal link between CIBC’s alleged
conduct and Defendant’s purported harm.
The Court will dismiss Defendants’ CFA counterclaim because
the parties’ commercial transactions fall outside the purview of
the CFA.
First, viewed in the light most favorable to the
claimant, the parties appear to have equal bargaining power.
William and Thomas Juliano are managing members of each of the
counterclaimant entities.
Counterclaim ¶ 2.
William Juliano
has been a commercial real estate developer in New Jersey and
elsewhere for more than 40 years.
Counterclaim ¶ 3.
Defendants
further elaborate that “[t]he projects and properties involved
in this case are but a few of the Julianos diverse portfolio of
commercial developments, which consists of retail space, hotels,
14
office buildings, and billboards.” Counterclaim ¶ 9. CIBC is a
Canadian chartered bank.
As such, the parties appear to be
sophisticated corporate entities akin to those in Princeton
Healthcare Sys. and Prof’l Cleaning.
Second, the pleadings show the parties underwent extensive
negotiations to create a custom agreement.
The transaction at
issue included over 700 pages of loan agreements negotiated over
a four year period.
documents).
See Pls.’ Br. at 13, n.12 (citing loan
Further, Defendants’ counterclaims illustrate that
the Julianos were involved both personally, and through counsel,
in extensive negotiations over agreement terms.
Counterclaim ¶¶ 43, 46, 63.
See, e.g.,
Defendants also note that “[t]he
Juliano Parties bargained closely for the priority bidding
rights embodied in the Loan Sale Agreement[.]”
93.
Counterclaim ¶
Accordingly, as in US Land Reserves, invoking the CFA is
inappropriate in this case because the “parties engage[d] in
extensive negotiations unique to a particular property” and both
personally, and through counsel, negotiated varying terms of the
agreements.
U.S. Land Reserves, 2009 WL 2488316, at *20.
Therefore, Defendants do not fall within “the ordinary meaning
of the consumer in the marketplace.” Id.
15
The cases cited by Defendants regarding the applicability
of the CFA are distinguishable.
In Salamon v. Teleplus
Enterprises, Inc., No. 05-2058, 2008 WL 2277094 (D.N.J. June 2,
2008), the court denied summary judgment on Teleplus’s CFA
counterclaim.
The court found there were questions of fact as
to whether Salamon’s services of finding non-traditional loans
were unique and whether Teleplus was inexperienced and
uninformed in the consumer transaction since Salamon provided no
support for these propositions. Id. at *12.
Defendants argue that if Salamon’s services were not unique
then the extensions of credit and mortgage modifications at
issue here are also subject to the CFA.
The Court disagrees.
See Defs.’ Opp. at 26.
Here, there are sufficient uncontested
facts in the facts as pled to determine that the transactions at
issue were not of the type offered to the public at large.
Further, Defendants are sophisticated participants in these
commercial loan transaction.
Additionally, Defendants cite Tuxedo Beach Club Corp. v.
City Fed. Sav. Bank, 749 F. Supp. 635 (D.N.J. 1990), which
permitted a CFA claim to proceed where the defendant allegedly
breached its promise to fund a $13 million condominium building.
16
However, in that case the defendant only argued that the
applicability of the CFA was limited by statute and on federal
supremacy grounds.
Id. at 648.
Thus, the analysis in Tuxedo
Beach is irrelevant to the issues before the Court.
B.
Breach of Contract
“To prevail on a breach of contract claim under New Jersey
law, a plaintiff must establish three elements: (1) the
existence of a valid contract between the parties; (2) failure
of the defendant to perform its obligations under the contract;
and (3) a causal relationship between the breach and the
plaintiff's alleged damages.”
Sheet Metal Workers Intern. Ass'n
Local Union No. 27, AFL-CIO v. E.P. Donnelly, Inc., 737 F.3d
879, 900 (3d Cir. 2013) (citing Coyle v. Englander's, 199 N.J.
Super. 212 (App. Div. 1985)).
“The Supreme Court of New Jersey
has instructed that ‘[w]here the terms of a contract are clear
and unambiguous there is no room for interpretation or
construction and we must enforce those terms as written.’”
(citing Kutzin v. Pirnie, 591 A.2d 932, 936 (N.J. 1991)).
Id.
A
plaintiff must identify the specific contract or provision that
was allegedly breached.
See Skypala v. Mortgage Electronic
Registration Systems, Inc., 655 F. Supp. 2d 451, 459 (D.N.J.
17
2009) (dismissing breach of contract claim because complaint did
not identify provisions plaintiff asserted were breached).
In their counterclaim, Defendants allege that “CIBC
materially breached the terms of the Loan Sale Agreement by,
inter alia, declaring non-existent, non-monetary technical
defaults before noticing the sale of the notes in order to
deprive the Juliano Parties of their rights under the Loan Sale
Agreement and by declaring the Loan Sale Agreement null and
void.”
Counterclaim ¶ 120.
Plaintiffs argue Defendants’ breach of contract
counterclaim should be dismissed because Defendants failed to
specify the contract provision at issue.
However, Defendants
identified the contract at issue, the Loan Sale Agreement.
Further, while Defendants did not quote the exact language in
the agreement they identified in their counterclaim the
substance of the bidding rights provision and how Plaintiffs
allegedly breached these terms.
Counterclaim ¶¶ 92-93.
This is
sufficient information to put Plaintiffs on notice as to
Defendants’ breach of contract counterclaim.
Plaintiffs additionally argue Defendants’ breach of
contract counterclaim should be dismissed because: (1) the
18
issuance of the technical defaults did not prevent Defendants’
from bidding; (2) CIBC followed the express terms of the
agreement; (3) and Defendants did not allege that they met their
obligations under the loan agreement.
At this stage, Defendants need only put forth a plausible
claim for relief.
Defendants provided sufficient facts to
support their claim that CIBC breached the bidding rights
provision of the Loan Agreement by erroneously declaring
Defendants in default.
Defendants further allege that
Plaintiffs’ actions dispossessed them of their priority bidding
rights and thwarted their ability to obtain financing from other
lenders to purchase their CIBC loans and invest in other
projects due to the default status of their loans.
¶¶ 101, 105, 120.
Counterclaim
Additionally, Defendants alleged that they
met their obligations under the loans and should not have been
declared to be in default.
Counterclaim ¶ 121.
Unsurprisingly,
Plaintiffs claim Defendants were in default, and therefore
Plaintiffs did not breach the priority bidding rights provision,
however, Plaintiffs raise only questions of fact not properly
resolved on a motion to dismiss.
Defendants need not prove
these allegations now, but only articulate a plausible claim for
19
relief above a speculative level.
Accordingly, Plaintiffs’
motion to dismiss Defendants’ breach of contract counterclaim is
denied.
C.
Breach of the Implied Covenant of Good Faith and Fair
Dealing
“An implied covenant of good faith and fair dealing is
present in all contracts governed by New Jersey law.”
Emerson
Radio Corp. v. Orion Sales, Inc., 253 F.3d 159, 169-70 (3d Cir.
2001) (citing Sons of Thunder, Inc. v. Borden, Inc., 148 N.J.
396, 420 (1997)).
Good faith means that “neither party shall do
anything which will have the effect of destroying or injuring
the right of the other party to receive the fruits of the
contract.”
Id. (citation omitted).
“Although the implied
covenant of good faith and fair dealing cannot override an
express term in a contract, a party's performance under a
contract may breach that implied covenant even though that
performance does not violate a pertinent express term.”
Wilson
v. Amerada Hess Corp., 168 N.J. 236, 244 (2001) (citation
omitted).
The party asserting breach of the implied covenant of
good faith and fair dealing must show “bad motive or intention”
and “must provide evidence sufficient to support a conclusion
that the party alleged to have acted in bad faith has engaged in
20
some conduct that denied the benefit of the bargain originally
intended by the parties.”
Mollo v. Passaic Valley Sewerage
Comm'rs, No. 07-1655, 2009 WL 5216976, at *17 (D.N.J. Dec. 30,
2009) aff'd, 406 F. App'x 664 (3d Cir. 2011) (citation omitted).
Defendants claim that Plaintiffs breached their duty of
good faith and fair dealing by filing this lawsuit in
retaliation and declaring nonexistent technical defaults.
Counterclaim ¶ 125.
Specifically, Defendants contend that by
“declaring the Juliano Parties in default of their obligations
under the Loans, and then commencing suit against them, CIBC
effectively eviscerated their ability to obtain funding from a
third party to enable them to bid for the Loans.”
Counterclaim
¶ 104.
Defendants alleged sufficient facts to pursue a
counterclaim for breach of the implied covenant of good faith
and fair dealing.
Defendants allege Plaintiffs’ letter
declaring them in default was in error because they satisfied
Plaintiffs’ request for financial information and had not missed
a payment.
Counterclaim ¶ 78.
Additionally, Defendants allege
CIBC acted with “with utter disregard” of their rights.
Counterclaim ¶ 126.
Accepting Defendants’ well-pleaded
21
counterclaims as true, Defendants sufficiently stated a cause of
action under the implied covenant of good faith and fair
dealing.
Accordingly, Plaintiffs’ motion to dismiss Defendants’
counterclaim for breach of the implied covenant of good faith
and fair dealing will be denied.
V.
CONCLUSION
For the foregoing reasons, Plaintiffs’ motion to dismiss
Defendants’ counterclaims [Doc. No. 25] will be granted in part
and denied in part.
Plaintiffs’ motion to dismiss Defendants’
Consumer Fraud Act counterclaim will be granted.
Plaintiffs’
motion to dismiss Defendants’ breach of contract and breach of
the implied covenant of good faith and fair dealing
counterclaims will be denied.
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
At Camden, New Jersey
Dated:_September 29, 2015__
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