Shatar Capital Inc v. Farzaneh

Filing 70

ORDER granting 53 Motion for Summary Judgment to the extent that the plaintiff is entitled to summary judgment as to liability on the guaranty and that the amount due under the guaranty is that indicated above, subject only to reduction for any amounts 1005 LLC may establish as an offset in the related litigation. Signed by Judge Joe Heaton on 11/17/2022. (so)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
SHATAR CAPITAL INC,
Plaintiff,
vs.
AMIR M. FARZANEH,
Defendant.

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NO. CIV-20-1057-HE

ORDER
In this case, plaintiff Shatar Capital Inc. seeks to enforce a Guaranty Agreement
executed by defendant Amir M. Farzaneh. The Guaranty Agreement was part of the
security for a loan in the amount of $5,350,000 made by Shatar Capital Inc. to 1005 LLC,
an Oklahoma limited liability company controlled by Farzaneh. The loan to 1005 LLC is
also the basis for a related case, CIV-20-1124-HE, in which 1005 LLC and Farzaneh assert
various claims against Shatar Capital Inc. Farzaneh asserts those same claims here as
counterclaims. Shatar Capital Inc. has now moved for summary judgment on the guaranty
and as to defendant Farzaneh’s counterclaims.
Background
The bulk of the background facts pertinent to the issues in this case are undisputed.
Shatar Capital Inc. loaned $5,350,000 to 1005 LLC in August 2018, pursuant to a note and
mortgage, to enable 1005 LLC to acquire an office building in Moore, Oklahoma.
Defendant Farzaneh executed a guaranty of the note. The note was due to mature August
23, 2019, but the maturity was extended to March 1, 2020, by a Loan Modification and

Extension Agreement effective as of December 11, 2019. It is undisputed that the note
was not paid by March 1, 2020, and that 1005 LLC was in default thereafter.
It is undisputed that Shatar Capital made assignments of some or all of its interest
in the loan at various times and that some or all of those participation interests were
eventually re-transferred to Shatar Capital while this case was pending.
It is also undisputed that, with credit for all payments made during the life of the
loan and subject to adjustment for the impact of counterclaims asserted here or in the
related case, the total unpaid principal and interest, as of August 10, 2022, was
$6,010,437.59, plus collection costs in the amount of $69,509.35 and accruing interest at
the rate of $1910.96 per day from August 10, 2022, until paid.1
Discussion
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). “A genuine dispute as to a material fact exists when the evidence,
construed in the light most favorable to the non-moving party, is such that a reasonable
jury could return a verdict for the non-moving party.” Carter v. Pathfinder Energy Servs.,
Inc., 662 F.3d 1134, 1141 (10th Cir. 2011) (quotations and citation omitted). “Only
disputes over facts that might affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment.” Anderson v. liberty Lobby, Inc.¸477

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Farzaneh’s response to the present motion does not take issue with plaintiff’s assertion of the
unpaid balance other than to argue it may be subject to reduction based on the counterclaims
asserted here or in the related case. See plaintiff’s undisputed fact #12 and defendant’s response.

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U.S. 242, 248 (1986). Applying these standards to the parties’ submissions here, the court
concludes plaintiff’s motion should be granted, subject only to the potential reduction of
amounts due under the guaranty based on how 1005 LLC’s claims are resolved in the
related case.
As noted above, it is undisputed that defendant Farzaneh executed an unconditional
guaranty of 1005 LLC’s debt to the plaintiff. It is undisputed that the debt guaranteed is in
default with an unpaid balance as indicated. Therefore, Farzaneh is liable on the guaranty
unless he can show the existence of some material issue of fact the resolution of which
might be a basis for him avoiding liability. None of his arguments do so.
Defendant contends he should not be liable on the guaranty because plaintiff lacks
“standing” to assert a claim as to it.2 He characterizes the argument as whether plaintiff
has standing to assert rights as to the note and mortgage. His argument is based on the
evidence that Shatar Capital sold participation interests in the note and mortgage to others.
Here, of course, the issue is not whether plaintiff has the right to enforce the note
and mortgage, but whether he has the right to enforce the guaranty.

Defendant’s

submissions do not directly address any purported transfer of the guaranty. However, to
the extent that defendant argues the guaranty was transferred incident to the assignment of
participation interests, it suffices to say there is no evidence offered here that plaintiff ever

2

Confusion often results when parties describe “standing” as the issue, when the issue is actually
what party or entity is the real party in interest or whether than party has a substantive basis for
recovery.

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ceased to be the holder of the underlying note or of the guaranty.3 As discussed more fully
in the summary judgment order separately entered in the related case, evidence of the sale
of participation interests is not inconsistent with plaintiff’s continued status as the holder
of the pertinent note with the authority to enforce it.
As is also discussed more fully in the order entered in the related case, Mr. Farzaneh
is in no position to assert there was something wrong with the practice of selling
participations in the loan. The undisputed evidence shows that the Loan Modification and
Extension Agreement signed in December 2019 explicitly acknowledged assignments had
been made and continued to designate Shatar Capital as the lender. Moreover, the
modification agreement explicitly waived any defenses or counterclaims the guarantor
might have had as of that time.
Even absent the waivers and releases included in the modification agreement, the
waivers of defenses included in the guaranty itself preclude Mr. Farzaneh’s reliance on the
counterclaims he now asserts.4 Language in a guaranty such as was included here is
generally enforceable in Oklahoma, as guarantors “are bound by the unambiguous terms
of the contract although the result may be harsh.” JPMorgan Chase Bank, N.A. v. Specialty
Restaurants, Inc., 243 P.3d 8 (Okla. 2010).

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Contrary to defendant’s suggestion in his brief, the various assignments between third parties do
not purport to assign all of Shatar Capital’s interest in the note and mortgage, but rather assign
all of the particular assignor’s interest in them.
4

The Guaranty Agreement, Doc. #53-4, provides that (para. 2), among other things, the Guarantor
“expressly waives … all rights of counterclaim, recoupment, offset or setoff ….”

4

To the extent that Mr. Farzaneh asserts fraud in the inducement of his guaranty (or
of the underlying obligation), based on an alleged promise of Mr. Namvar to purchase and
lease back the property, he has released any claim in that regard.

Mr. Farzaneh’s

submissions make it clear that he knew, by the time the lease modification agreement was
entered into in December 2019, that Mr. Namvar was not purchasing the property or doing
a leaseback. Pursuant to the explicit provisions of the modification agreement, any claim
or counterclaim then existing against Shatar Capital based on such a promise was released.
Similarly, defendant has not submitted evidence sufficient to create a justiciable
issue as to his purported constructive fraud counterclaims even if he was otherwise able to
assert them. Any such claims appear to ones held by 1005 LLC, as the party contractually
bound on the note and mortgage, rather than Mr. Farzaneh as guarantor. More importantly,
however, and as discussed more fully in the summary judgment order in the related case,
Mr. Farzaneh and his entities have not identified or supported a plausible basis for a
constructive fraud (or negligence) claim even in favor of 1005 LLC.
In short, Mr. Farzaneh’s submissions are insufficient to create a justiciable issue as
to any matter that might impact the enforceability of his guaranty. He is liable under it for
any amounts 1005 LLC is ultimately found to be liable for under the Note and Mortgage.
Summary
The court concludes plaintiff is entitled to summary judgment as to liability on the
guaranty and that the amount due under the guaranty is that indicated above, subject only
to reduction for any amounts 1005 LLC may establish as an offset in the related litigation.
Plaintiff’s motion [Doc. #53] is GRANTED to that extent.
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IT IS SO ORDERED.
Dated this 17th day of November, 2022.

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