Opinion ID: 195382
Heading Depth: 1
Heading Rank: 1

Heading: the view from ringside

Text: At the height of a boom market in real estate, two neophytes, Ralph H. Scott, II, a physician, and his wife, Betty, decided to build a large, expensive residential subdivision on the picturesque island of Martha's Vineyard. In order to proceed, Dr. and Mrs. Scott formed a corporation, North Bridge Associates, Inc. The Scotts and North Bridge Associates (collectively, borrowers or appellants) then executed a note in favor of ComFed Savings Bank (ComFed or the bank) in the amount of $2,995,000. The borrowers closed the loan on November 25, 1987, securing it by a mortgage on the North Bridge subdivision. They also executed a construction loan agreement 3 that specified when and how the bank would disburse the borrowed funds. The venture experienced several setbacks. A particularly vexing problem involved abutting property owners who eventually served a lis pendens asserting that title defects invalidated easements essential to the subdivision's viability. At this delicate juncture, the bank shut off the flow of funds and construction ground to a halt. When the promissory note matured on November 25, 1988, the borrowers failed to repay the outstanding balance. In a last-ditch effort to avert foreclosure, they capitulated to ComFed's demands. As part of the tribute that ComFed exacted for deferring the repayment obligation, the borrowers signed an extension agreement and general release surrendering all potential defenses and counterclaims.1 The loan remained unpaid at the end of the extension period. The bank then sued the borrowers in a Massachusetts state court. The borrowers answered and counterclaimed alleging, inter alia, that ComFed had broken its promises, violated an implied covenant of good faith and fair dealing, disregarded fiduciary responsibilities, and engaged in fraudulent misrepresentation. They also asked the court to set aside the 1In the extension agreement, the borrowers represented that no defenses, offsets, or counterclaims exist to the full payment of such indebtedness in accordance with its terms. In the general release, they purposed to discharge ComFed of and from any and all debts, demands, action, causes of action, suits, accounts, covenants, and damages which North Bridge Associates, Inc. or its officers . . . may have or ever had . . . . 4 extension agreement and general release on grounds of duress. Inasmuch as procedural tussles have dominated the course of this litigation, we deem it prudent to set forth a detailed chronology of relevant events occurring from and after the time that the parties joined issue. In doing so, we eliminate many matters unimportant to our resolution of the issues on appeal.2 1. December 20, 1990. The borrowers serve 1. December 20, 1990. interrogatories and a request for document production. In compliance with applicable procedural rules, see Fed. R. Civ. P. 34(b), the request sets a reasonable time and place for production, specifying that the documents shall be produced within 30 days at the offices of the borrowers' lawyers. 2. January 23, 1991. Following ComFed's 2. January 23, 1991. failure, the Resolution Trust Corporation (RTC), having been appointed as conservator (and soon to be appointed receiver), is substituted as the party plaintiff and, on April 1, 1991, removes the action to the federal district court. 3. April 16, 1991. Over three months after 3. April 16, 1991. 2At the time the borrowers initiated discovery, the state court had jurisdiction and, accordingly, the borrowers' initial discovery requests were governed when made by the Massachusetts Rules of Civil Procedure. The action was soon removed to the federal district court. See Chronology, infra, at No.2. This procedural wrinkle has no effect on our ensuing discussion for two reasons. First, removed cases are governed fully by the Federal Rules, and are treated no differently than if they had originated in a federal forum. See Fed. R. Civ. P. 81(c); see also Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 438 (1974). Second, the state's procedural rules parallel their federal counterparts in their relevant particulars. See, e.g., Mass. R. Civ. P. 34(b) (directing that requests for document production specify a reasonable time, place, and manner of making the inspection and performing the related acts); Mass. R. Civ. P. 33(a) (allotting 45 days within which to answer interrogatories). For simplicity's sake, we cite only to the Federal Rules. 5 the date on which the plaintiff's discovery responses were due, RTC takes a first, tentative step toward responding: it offers to produce the described documents, but attempts unilaterally to amend the time and place for production. No documents are received and nothing is said with respect to the answers to interrogatories although, under the Federal Rules, the answers were due within 30 days of service, see Fed. R. Civ. P. 33(b)(3). 4. May 26, 1992. After thirteen more months 4. May 26, 1992. without incident or action of any kind, the district judge holds a status conference. RTC agrees to provide all outstanding discovery promptly. 5. February 22, 1993. RTC fritters away 5. February 22, 1993. another nine months. Eventually, the judge convenes a second status conference. This time, RTC comes armed with a motion for partial summary judgment (the SJM).3 The judge orders all outstanding discovery obligations honored by March 24, at the latest. 6. March 2, 1993. As no progress has been 6. March 2, 1993. made toward completion of discovery, the borrowers file the first of three motions for enlargement of the time within which to oppose the SJM. The borrowers' motion is accompanied by an attorney's affidavit detailing the history of the action and noting that, more than two years after they should have been delivered, discovery materials are still in the pipeline. 7. March 18, 1993. RTC notifies the 7. March 18, 1993. borrowers that it has gathered some responsive documents, and suggests that the parties agree upon a mutually convenient time to review them. 8. March 25, 1993. Over RTC's objection, 8. March 25, 1993. 3The SJM addressed only count 1 of the complaint and the borrowers' several counterclaims. The remainder of the complaint, dealing principally with RTC's effort to reach and apply assets standing in the name of a related third party (himself a defendant), remains pending in the district court. 6 the district court grants the borrowers' motion and extends the time for opposing the SJM to April 16, 1993. 9. April 2, 1993. The interrogatories are 9. April 2, 1993. finally answered and, on the same date, the borrowers' attorneys review the documents that RTC has made available at its counsel's offices. 10. April 9, 1993. Some of the documents 10. April 9, 1993. originally requested on December 2, 1990, amounting to over 2,000 pages, are at long last delivered to the offices of the borrowers' lawyers, Peter and Cathy Brooks (who are husband and wife). On the same day, however, the Brooks' infant son is hospitalized and placed in an intensive care unit. He remains there, initially, for nine days, and is readmitted on April 20. Upon discharge three days later, he continues to require special attention. 11. April 12, 1993. The borrowers file a 11. April 12, 1993. motion in which they request a further enlargement of time until May 14, 1993. This motion is not accompanied by an affidavit, but, in an accompanying memorandum, Peter Brooks (who authored the affidavit in support of the first extension motion) describes the medical emergency and informs the court that the borrowers cannot intelligently address the SJM until they have time to review the compendious discovery materials produced only a few days earlier. 12. May 20, 1993. The borrowers conclude 12. May 20, 1993. their document review and find the documents produced to be incomplete and inadequate. They write to RTC's counsel specifying seventeen missing categories of documents and soliciting a conference to reduce areas of potential controversy.4 The ensuing 4The letter implicates a local rule that provides in pertinent part: Before filing any discovery motion, including any motion for sanctions . . ., counsel for each of the parties shall confer in good faith to narrow the areas of disagreement to 7 discussion between the parties engenders no results. 13. May 24, 1993. The borrowers file their 13. May 24, 1993. third motion for an extension, accompanied by an affidavit from Cathy Brooks rehearsing the latest developments, stating her belief that the documents withheld exist, and opining that those papers, if produced, will illuminate genuine disputes concerning material facts. 14. June 15, 1993. The borrowers move to 14. June 15, 1993. compel production of the undisclosed documents. 15. July 20, 1993. Without giving notice or 15. July 20, 1993. holding a hearing, the district judge grants the SJM, rejects the borrowers' second and third extension motions, and denies the motion to compel. The court offers no meaningful explanation for any of its rulings. In due course, the court invokes Fed. R. Civ. P. 54(b) and enters judgment. The borrowers appeal.5 They assert that the lower court erred: in denying their second and third extension motions; in taking up the SJM while discovery remained incomplete, and without prior notice or a hearing; and in granting the SJM despite the presence of genuine issues of material fact.