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Firstmerit Bank, N.A. v. Walsh

United States District Court, N.D. Illinois, Eastern Division

March 5, 2014

FIRSTMERIT BANK, N.A., successor in interest to FDIC, as receiver for George Wahington Savings Bank, Plaintiff,


JOHN W. DARRAH, District Judge.

Plaintiff, FirstMerit Bank, N.A., successor in interest to FDIC, as receiver for George Washington Savings Bank ("FirstMerit"), brought this action against Defendants to foreclose a mortgage and for breach of note and guaranties. FirstMerit has moved for summary judgment against Defendants, Gerald Walsh, Jason C. Hunt, and LaGrange Crossing II, LLC, pursuant to Federal Rule of Civil Procedure 56, and for default judgment against Defendant Robert D. Gomolski, pursuant to Federal Rule of Civil Procedure 55. For the reasons discussed below, FirstMerit's Motion [28] is granted.


Local Rule 56.1(a)(3) requires a party moving for summary judgment to provide "a statement of material facts as to which the moving party contends there is no genuine issue...." Local Rule 56.1(b)(3) requires the nonmoving party to admit or deny each factual statement proffered by the moving party and concisely designate any material facts that establish a genuine dispute for trial. See Schrott v. Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir. 2005). A litigant's failure to dispute the facts set forth in its opponent's statement in the manner required by Local Rule 56.1 deems those facts admitted for purposes of summary judgment. Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003); see also Bordelon v. Chicago Sch. Reform Bd. of Trustees, 233 F.3d 524, 527 (7th Cir. 2000) (the district court has discretion to require strict compliance with its local rules governing summary judgment). Local Rule 56.1(b)(3)(C) further permits the non-movant to submit a statement "of any additional facts that require the denial of summary judgment...." To the extent that a response to a statement of material fact provides only extraneous or argumentative information, this response will not constitute a proper denial of the fact, and the fact is admitted. See Graziano v. Vill. of Oak Park, 401 F.Supp.2d 918, 937 (N.D. Ill. 2005). Similarly, to the extent that a statement of fact contains a legal conclusion or otherwise unsupported statement, including a fact which relies upon inadmissible hearsay, such a fact is disregarded. Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997).

In support of its Motion for Summary Judgment, FirstMerit has filed a Rule 56.1 Statement of Undisputed Material Facts. Defendants, despite having been granted an extension of time, have failed to file a response or an additional statement of facts. Instead, Defendants have only filed a brief contesting FirstMerit's requested attorney's fees. Consequently, FirstMerit's undisputed facts are deemed admitted and are relied upon for the following background facts. See Lamz, 321 F.3d at 683.


FirstMerit is a federally-chartered national banking association, with its main office located in Akron, Ohio. (Plaintiff's Rule 56.1 Statement of Undisputed Material Facts ("SOF") ¶ 1.) FirstMerit acquired most of the assets of George Washington Savings Bank ("GWSB"), after it was closed and the Federal Deposit Insurance Corporation ("FDIC") was appointed as receiver in February 2010. ( Id. ¶ 2.) FirstMerit is the successor-in-interest to GWSB and is the real party in interest in this proceeding.

Defendant LaGrange Crossing II, LLC ("LaGrange Crossing") was a limited liability company until it was dissolved on March 8, 2013. Defendants Walsh, Gomolski, and Hunt are all members of LaGrange Crossing. ( Id. ¶¶ 6-8.) LaGrange Crossing holds the legal title of record to the property commonly known as 1139-1143 North LaGrange Road, LaGrange Park, Illinois, 60526 (the "Subject Property"), which it acquired from LaGrange Crossing, Ltd. ( Id. ¶¶ 4, 18.) LaGrange Crossing is also the obligor/borrower on a Promissory Note in favor of GWSB in the principal amount of $1, 252, 000.00 (the "Note"), which was originally executed by LaGrange Crossing, Ltd., but transferred to LaGrange Crossing under a Change in Terms Agreement. The Note is secured by a Construction Mortgage, executed in favor of GWSB, on the Subject Property and recorded as document number XXXXXXXXXX (the "Mortgage"). ( Id. ¶¶ 11-13.)

On September 1, 2008, GWSB and LaGrange Crossing entered into a construction loan agreement, under which GWSB made a loan to LaGrange Crossing in the original principal amount of $1, 252, 000.00 (the "Construction Loan"). Also on September 1, 2008, Walsh, Gomolski, and Hunt each executed a continuing commercial guaranty, in which they, as guarantors, jointly and severally guaranteed payment of the indebtedness of LaGrange Crossing to GWSB (the "Guaranties"). ( Id. ¶¶ 14-17.)

On November 4, 2010, the FDIC assigned the Mortgage to FirstMerit, which was recorded with the Recorder of Deeds of Cook Count Illinois on December 3, 2010 as Document No. 1033716036. ( Id. ¶ 19.) The Note matured on September 1, 2009, and LaGrange Crossing failed to pay FirstMerit the amounts due under the Note. ( Id. ¶ 20.) FirstMerit brought this action to recover the amount due to it under the loan agreements. Only LaGrange Crossing, Walsh and Hunt have filed an Answer to the Complaint; Gomolski has failed to file an appearance or an Answer.


Standard for Default

Under the Federal Rules of Civil Procedure, a defendant must file its answer "within 21 days after being served with summons and complaint." Fed.R.Civ.P. 8(a)(1)(A)(i). A defendant who fails to do so may be found in default under Federal Rule of Civil Procedure 55(a). It is in the district court's discretion whether to enter default judgment. O'Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993). Default judgment establishes a defendant is liable, as a matter of law, for the causes of action alleged in the complaint by the plaintiff. United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989).

When a defendant is found in default, all factual allegations in the complaint are deemed admitted and not subject to challenge. Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994). However, allegations in the complaint relating to the amount of damages are not deemed admitted. Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983); see also Fed.R.Civ.P. 8(b)(6). The court may conduct hearings when it is necessary to perform an accounting, ascertain damages, "establish the truth of any allegation by evidence, " or investigate any other matter. Fed.R.Civ.P. 55(b)(2)(A)-(D). A default judgment regarding damages may be entered without a hearing when "the amount claimed is liquidated or capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits." Dundee Cement Co., 722 F.2d at 1323. "Unless the award is clearly ...

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