Court Opinion

ID: 4025931
Source: CourtListenerOpinion
Date Created: 2016-08-17 17:01:06.551283+00
Date Added: 2024-06-11T07:45:55.333865
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 16a0485n.06

                                 Case Nos. 15-5698/5699/5711
                                                                               FILED
                         UNITED STATES COURT OF APPEALS                   Aug 17, 2016
                              FOR THE SIXTH CIRCUIT                   DEBORAH S. HUNT, Clerk

BANK OF AMERICA, N.A., as successor by           )
merger to LaSalle Bank, N.A.; SMA ISSUER         )
I, Bank of America, N.A.,                        )
                                                 )
       Plaintiffs-Appellees,                     )
                                                 )
THE DOMAINE DE LA RIVE                           )
CONDOMINIUM COUNCIL OF CO-                       )
OWNERS, INC.,                                    )
                                                 )
       Intervenor Plaintiff-Appellee,            )     ON APPEAL FROM THE UNITED
                                                 )     STATES DISTRICT COURT FOR
v.                                               )     THE EASTERN DISTRICT OF
                                                 )     KENTUCKY
CORPOREX REALTY & INVESTMENT                     )
CORPORATION,                                     )
                                                 )
       Defendant-Appellant,                      )
                                                 )
CPX OLYMPIC BUILDING II, LLC; CPX                )
MADISON PLACE OFFICE, LLC,                       )
                                                 )
       Defendants.
                                                 )

       BEFORE: KEITH, COOK, and STRANCH, Circuit Judges.

       COOK, Circuit Judge. Bank of America (“BOA”) sued three Corporex-related entities to

collect the balance of three defaulted commercial real estate loans and to foreclose on the
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mortgaged properties. It also sued a fourth Corporex entity as guarantor of the loans.1 Corporex

in turn asserted various counterclaims against BOA concerning loan-extension negotiations that

soured. After a bout of contentious discovery, Corporex moved to file a third round of amended

counterclaims, which the district court denied. BOA then sought summary judgment on its

breach-of-contract and foreclosure claims and on Corporex’s counterclaims. The district court

granted summary judgment to BOA on all claims, and Corporex now appeals.

       We AFFIRM the district court’s grant of summary judgment and denial of Corporex’s

motion to amend its counterclaims.

                                                  I.

       LaSalle Bank (predecessor-in-interest to BOA) made commercial real estate loans to

three Corporex entities: CPX Olympic Building II, LLC (“Olympic”), CPX Madison Place

Office, LLC (“Madison”), and CPX Tampa Gateway OPAG, LLC (“Tampa”). The loans are

secured by a leasehold mortgage on three commercial properties and guaranteed by Corporex

Realty & Investment, LLC (“Realty”).

       A covenant in the Madison loan, delivered and executed in October 2006, required

Madison to achieve a debt-service-coverage ratio—which measures cash flow against current

debt obligations—of at least 1.10 to 1.0 as of August 31, 2010. In August 2009, Corporex

notified BOA that Madison would likely fall short of the required ratio. BOA recommended

postponing an appraisal on the Madison property until the economy improved and advised that it

would “work with” Corporex to extend and modify the Madison loan. In May 2010, the parties

again met to discuss the debt-service-coverage-ratio covenant. BOA told Corporex that before it

could consider loan extensions, Corporex needed to obtain an appraisal on the Madison property.

       1
           For simplicity, we refer to the entities as “Corporex.”
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If the property appraised at a value equal to or more than the outstanding loan balance, BOA

could “work around the debt service coverage issue.” An appraisal in June revealed a property

value greater than the loan balance.

       Accordingly, the parties again conferred in August 2010, this time to additionally discuss

the looming maturity dates of the Olympic and Tampa loans.           At this meeting, Corporex

divulged that it had considered refinancing options for the Olympic loan with another lender, but

BOA executive David Betzold told Corporex to “hold off” on alternative funding, maintaining

that BOA could offer a “better deal.” BOA asked Corporex to submit an extension proposal for

all three loans, which Corporex sent in early September.

       While contemplating Corporex’s proposal, BOA sent Corporex a letter stating that

Madison failed to achieve the required debt-service-coverage ratio and that it had thirty days to

cure the covenant breach by paying down the loan principal balance by $4.5 million. Confused,

Corporex contacted BOA, who assured that the letter was a “matter of procedure” and that BOA

still intended to respond to the September proposal.

       On November 1, BOA tendered a counterproposal via “term sheets.” The proposal

explained that its provisions “are provided for discussion purposes only and . . . [do] not

constitute an offer, agreement or commitment to lend or renew at this time.”              In the

accompanying email, BOA employee Phil Cole pressed that “time is of the essence given the

upcoming date for the right to cure in the [Madison] default letter.” The term sheets offered

Madison a fifteen-month extension paired with a $3 million up-front principal payment.

Corporex responded, insisting that it needed a four-to-five year extension. A couple of weeks

later, BOA sent Corporex a letter declaring the Madison loan in default.

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       In early December, BOA transferred the three Corporex loans from BOA’s Commercial

Real Estate section to its Special Assets Group (“SAG”). SAG employs a variety of tactics to

deal with distressed loans, including extending or modifying the loans, selling the notes, or

foreclosing on the mortgages. After the transfer, SAG employee Leslie Andren introduced

herself to the Corporex executives and asked them to sign pre-negotiation letters (PNLs) before

extension discussions could continue. All three Corporex entities signed the letters—and Realty

signed as guarantor—which released any claims or defenses arising out of or relating to the loan-

extension negotiations.

       The Olympic and Tampa loans matured on February 1, 2011.2              Still embroiled in

negotiations, BOA sent Corporex a new round of term sheets on March 1, but attached letters

declaring the Olympic and Tampa loans in maturity default.

       By mid-April, the parties had agreed to basic extension terms on all three loans, and BOA

completed its internal approval process the next month. Thus, BOA drafted final loan-extension

agreements and sent them to Corporex for signing. Expecting simple documents similar to the

term sheets, Corporex was displeased to find a complicated loan contract. Moreover, the drafts

contained terms Corporex deemed burdensome, including a release of claims and jury-trial

waiver. Corporex therefore responded with a June 22 letter protesting the new terms and

informing BOA that it had “directed legal counsel to cease review of the documents.”

A subsequent conference call resulted in an agreement that Corporex would provide written

objections to the additional terms. The next day, however, Corporex sent BOA a letter declaring

       2
        BOA previously agreed to extend the maturity date on the Olympic loan from October
31, 2010 to February 1, 2011.
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an impasse, and Corporex’s counsel confirmed by email that it would not be sharing written

objections. Loan discussions ceased.

       Concurrently, in early June 2011, BOA pondered a sale of a large portfolio of loans—

later named “Project Atlas.” On July 26, the Madison loan appeared on a list of loans to be

marketed in the Atlas sale. The addition of the Olympic and Tampa loans soon followed. In

September, SMA Portfolio Owner, LLC (“SMA”) bought the Olympic and Tampa loans. The

Madison loan remains unpurchased and matured in October 2011.

       BOA sued Realty, Madison, Olympic, and Tampa in several district courts to collect on

the loans and foreclose on the properties. Each Corporex entity asserted various counterclaims,

which they twice amended.       After it purchased the Olympic and Tampa loans, SMA was

substituted as plaintiff with respect to those loans and eventually settled with Olympic, Tampa,

and Realty.

       Thus, the relevant claims that survived the SMA settlement were: (1) BOA’s claims

against Madison for breach of the promissory note and to foreclose on the mortgage and against

Realty for breach of the Madison guarantee; (2) Olympic’s counterclaim against BOA for breach

of a contractual right of first refusal; (3) Olympic’s and Realty’s counterclaims against BOA for

promissory estoppel; and (4) Olympic’s, Madison’s, and Realty’s counterclaims against BOA for

breach of the implied duty of good faith and fair dealing.

       Following discovery, Corporex proposed third amended counterclaims of fraud and

negligent misrepresentation, but the district court denied leave on untimeliness grounds. BOA

then moved for summary judgment on its claims and on Corporex’s counterclaims. The district

court granted summary judgment to BOA on all claims. It dismissed the right-of-first-refusal

claim for failure to show that BOA determined to sell the Olympic loan before Olympic

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defaulted and held that the PNLs released Corporex’s promissory-estoppel and good-faith-and-

fair-dealing claims. The court then found no triable issue of fact regarding Madison’s default

and thus granted summary judgment to BOA on its claims against Madison and Realty. This

appeal followed.

                                                II.

       We review de novo the district court’s grant of summary judgment, affirming if the

evidence demonstrates that no genuine issue exists as to any material fact and that BOA is

entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Tysinger v. Police Dep’t of

Zanesville, 463 F.3d 569, 572 (6th Cir. 2006). A dispute is “genuine” if a reasonable jury could

return a verdict in Corporex’s favor. Tysinger, 463 F.3d at 572 (citing Hedrick v. W. Reserve

Care Sys., 355 F.3d 444, 451 (6th Cir. 2004)). “The court must view the evidence in the light

most favorable to [Corporex] and draw all reasonable inferences in its favor.” Id.

       A. Corporex’s Counterclaim for Breach of the Olympic Right of First Refusal

       Corporex asserts that BOA breached the contractual right of first refusal contained in the

Olympic loan agreement. That agreement provides:

       Lender agrees that in the event that it determines to assign or sell the Note or any
       portion thereof to any person or entity not affiliated with Lender, Lender shall,
       provided Borrower is not then in default under this Note or any of the other Loan
       Documents, allow Borrower or Borrower’s affiliates a right of refusal to purchase
       same . . . .

       Corporex maintains that BOA determined to sell the Olympic loan prior to the loan’s

default in March 2011. BOA responds that it decided to sell the loan no earlier than June 2011,

when BOA first conceived of Project Atlas. Because this decision occurred after Olympic

defaulted, BOA insists that Corporex had no right of first refusal under the contract.

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       We agree with BOA that no reasonable juror could conclude that BOA determined to sell

the loan before the March default extinguished Corporex’s right of first refusal. Corporex relies

heavily on BOA’s decision in November 2010 to internally downgrade the Corporex loans from

a “Decrease” exposure-strategy designation to an “Out” designation. BOA’s internal emails

define the “Out” designation: “Credit exposure is unacceptable at any level. New requests

should not be entertained nor existing loans renewed except as a means to accomplishing a

complete payout.” BOA executive Betzold testified that such a designation change meant that

BOA “would continue to work through the existing portfolio, modify and extend, but [would]

not want to entertain any new business.”

       Corporex directs the court to the testimony of a different BOA executive, Joseph Fuszard,

who also described the exposure-strategy designations: “[T]hose descriptors are intended to

signal whether we are increasing our business with that client, maintaining it at a particular level,

decreasing it to a set level, or allowing it to run out completely.” But “allowing it to run out

completely” must be read in the context of Fuszard’s further clarification of the “Out”

designation: “It simply means that when the current exposures have been repaid, they won’t be

replaced with any new.” None of the definitions BOA used to describe the “Out” exposure

strategy reveal a determination to sell the note.

       Corporex argues for the first time on appeal that its negotiations with BOA “had never

been a ‘means of accomplishing a complete payout’” and thus the “Out” designation as applied

to Corporex meant BOA decided to sell the loans. But Corporex’s own communications to BOA

assure that the loan extensions would allow for complete repayment of the loan at the close of

the extension term. (R. 251-14 (“With a five-year runway, we are prepared to commit whatever

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resources are reasonably necessary to ensure full pay off . . . .”).) Indeed, nothing in the record

shows that the negotiations contemplated loan forgiveness or new loan transactions.

        Next, Corporex insists that BOA’s transferring the loans to SAG in December 2010

evidences a decision to sell. But the record belies Corporex’s assumption that SAG deals only in

loan sales. Andren testified that SAG could modify loans, foreclose, grant deeds in lieu of

foreclosure, do discounted payoffs, and could sell the notes, but that “no one method . . . was

preferred.” Another SAG employee, Gary Katunas, explained that loan sales are “something we

use from time to time” but are not “a high priority in terms of how we deal with assets.”

Corporex provides no evidence to rebut this testimony.

        In fact, the record shows that the earliest point at which BOA may have determined to

sell the Olympic loan was in June 2011, when Fuszard circulated a memo regarding a potential

bulk loan sale, i.e., Project Atlas. The Olympic loan was not added to the Atlas portfolio until

August 2. Accordingly, no reasonable juror could conclude that BOA determined to sell the

Olympic loan before its March 2011 default. And, because Corporex’s right of first refusal was

never triggered, the district court properly dismissed this claim.

        B. The PNLs Bar Corporex’s Promissory-Estoppel and Good-Faith-and-Fair-Dealing
           Counterclaims

        In alleging promissory estoppel, Corporex claims that it detrimentally relied on BOA’s

promise to work with Corporex to extend the terms of the Olympic loan by passing up on other

refinancing opportunities. To support its claim that BOA breached its implied duty of good faith

and fair dealing, Corporex theorizes that BOA misrepresented its interest in negotiating loan

extensions in order to push the loans into maturity default. The defaults then allowed BOA to

sell the loans to a third party free of Corporex’s rights of first refusal.

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       Both claims are barred by the PNLs. The PNLs release the parties from “any and all

liabilities, claims and demands whatsoever, in law or in equity, which such releasing party now

has or may hereafter have against the other party caused by or arising out of or relating to all or

any Loan Communications.” The parties also released “any defense to any action by any other

party . . . based on any Loan Communications.” The letters define “Loan Communications” as

“[a]ny discussions, negotiations, correspondence and other communications relating to the Loan

and the Loan Documents that Borrower, Guarantor and/or their representatives may have

previously had, or in the future may have, with representatives of Lender.”            Corporex’s

promissory-estoppel and good-faith-and-fair-dealing claims rely on Loan Communications and

so fall within the scope of the PNLs’ release.

       Corporex therefore attacks the PNLs’ validity and argues that, even if they are valid, they

do not release the claims.

       As a preliminary matter, the PNLs dictate that Kentucky law controls. Though Corporex

argues that the PNLs’ choice-of-law provisions would not necessarily govern arguments that

challenge the PNLs’ enforceability, it admits that Kentucky law mirrors Ohio law in all relevant

respects. This congruity renders a choice-of-law analysis unnecessary. See CenTra, Inc. v.

Estrin, 538 F.3d 402, 409–10 (6th Cir. 2008). Thus, like the parties, we examine both Ohio and

Kentucky law. See Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1171 (11th Cir. 2009)

(examining “the law of each of the interested states” when the states’ laws are the same).

       1. The PNLs are Valid

       Corporex deems the PNLs invalid both for lack of consideration and because BOA

fraudulently induced Corporex to sign them. Both arguments fail.

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               a. Consideration

       A release, like any contract, must be supported by consideration. Waddle v. Galen of Ky.,

Inc., 131 S.W.3d 361, 365 (Ky. Ct. App. 2004).            “Mutual promises constitute adequate

consideration if a benefit is conferred to the promisor or a detriment is incurred by the promisee.”

Energy Home Div. of S. Energy Homes, Inc. v. Peay, 406 S.W.3d 828, 835 (Ky. 2013) (citing

More v. Carnes, 214 S.W.2d 984, 991 (Ky. 1948)); accord Lake Land Emp’t Grp. of Akron, LLC

v. Columber, 804 N.E.2d 27, 32 (Ohio 2004).

       BOA contends that its agreement to discuss a loan extension in lieu of immediately suing

upon default served as valid consideration. We agree.

       A promise to withhold the filing of a lawsuit, even for a brief period of time, constitutes

adequate consideration. See Kidd v. Kidd, No. 06CA119, 2007 WL 2206859, at *3 (Ohio Ct.

App. Aug. 2, 2007) (“We find even the minimal forbearance of a partition action for sixteen

months is consideration as it was ‘something of value.’” (citing Yardmaster, Inc. v. Orris, No. 9-

305, 1984 WL 7415 (Ohio Ct. App. June 29, 1984))); cf. David Roth’s Sons, Inc. v. Wright &

Taylor, Inc., 343 S.W.2d 389, 391 (Ky. 1961) (“If both parties are bound by mutual obligations

for even a short period of time, the contract cannot be avoided by either party [for lack of

consideration].”). Courts in other states have held that an agreement to negotiate when there is

no legal obligation to do so constitutes sufficient consideration. See, e.g., In re Vargas Realty

Enters., Inc., 440 B.R. 224, 236–37 (S.D.N.Y. 2010) (listing New York cases). We therefore

conclude that an agreement by BOA to negotiate a loan extension instead of immediately suing

Corporex serves as adequate consideration to support the releases.

       Corporex insists that BOA never promised to negotiate. It cites the PNLs’ language

stating that BOA had no obligation “to discuss, pursue or agree to any modifications, consents or

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approvals or assumptions of the Loan.” Moreover, it argues, either party could discontinue

negotiations at any time upon notice. Thus, it labels BOA’s agreement to negotiate an illusory

promise. See Imbrogno v. Mimrx.com, Inc., No. 03AP-345, 2003 WL 22707792, at *2 (Ohio Ct.

App. Nov. 18, 2003) (“A contract is illusory only when by its terms the promisor retains an

unlimited right to determine the nature or extent of his performance . . . .” (citing Century 21 Am.

Landmark, Inc. v. McIntyre, 427 N.E.2d 534, 534 (Ohio Ct. App. 1980))); see also RAM Eng’g

& Constr., Inc. v. Univ. of Louisville, 127 S.W.3d 579, 586 (Ky. 2003) (“Where an illusory

promise is made, that is, a promise merely in form, but in actuality not promising anything, it

cannot serve as consideration.”). BOA responds that, by the terms of the PNLs, it did agree to

negotiate: “Lender will discuss the Loan with Borrower’s and Guarantor’s representatives,

provided that the following agreements and understandings govern.” And BOA notes that it, in

fact, negotiated a possible extension for several months, refraining from immediately suing to

foreclose.

       The terms of the PNLs are indeed contradictory concerning whether BOA had any

obligation to discuss a loan extension. The court therefore must examine the surrounding

circumstances to determine the parties’ intent. See Fouty v. Ohio Dep’t of Youth Servs., 855
N.E.2d 909, 925 (Ohio Ct. App. 2006) (“[W]hen contracts contain ambiguous or conflicting

terms, it is proper for a court to consider ‘extrinsic evidence,’ i.e., evidence outside the four

corners of the contracts, in order to determine the parties’ intent.” (quoting Shifrin v. Forest City

Ents., Inc. 597 N.E.2d 499 (Ohio 1992))); Cent. Bank & Trust Co. v. Kincaid, 617 S.W.2d 32, 33

(Ky. 1981) (holding that if the terms of a contract are ambiguous, “then extrinsic evidence may

be resorted to in an effort to determine the intention of the parties”).

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       The record shows that BOA agreed to forgo immediate suit in favor of negotiating an

extension. (See R. 232-22 (Andren insisted that Corporex sign the PNLs before she could send

updated term sheets); R. 232-44 (Andren told Corporex that “in order to move forward with

negotiations” Corporex needed to sign the PNLs).) The parties signed the PNLs after the loans

defaulted, and BOA then continued to negotiate for months. See Sellars v. Jones, 175 S.W.
1002, 1003 (Ky. 1915) (“[A]n actual forbearance to sue may often, in connection with other

circumstances, sometimes slight, be evidence of an implied agreement to forbear, and thus form

a consideration for a promise.”); Klamo v. Hobbs, No. 83-02-019, 1983 WL 4438, at *2 (Ohio

Ct. App. Aug. 10, 1983) (“[A]ctual forbearance or promise to forbear to prosecute or pursue a

legal right or a claim on which one has a right to sue is sufficient consideration to support an

agreement.”). And Corporex itself argues that BOA promised Corporex that it would negotiate

an extension in good faith. Thus, the parties’ understanding shows that Corporex signed the

release in exchange for BOA’s promise to negotiate a loan extension in lieu of immediately

pursuing its contractual remedies. Adequate consideration supports the PNLs.

              b. Fraudulent Inducement

       Corporex next seeks to void the PNLs because BOA fraudulently induced it to sign them.

In Kentucky and Ohio, “a release of liability procured by fraud is voidable.” Ziegler v. Knock,

Nos. 2008–CA–002160–MR, 2008–CA–002370–MR, 2013 WL 189793, at *2 (Ky. Ct. App.

Jan. 18, 2013) (citing Kentucky and Ohio case law). The party asserting fraud must show, by

clear and convincing evidence, “that it reasonably relied on a representation that was material,

false, known to be false or recklessly made, and made with the intent of inducing another to act

or refrain from acting.” Crestwood Farm Bloodstock v. Everest Stables, Inc., 751 F.3d 434, 444

(6th Cir. 2014) (citing Ross v. Powell, 206 S.W.3d 327, 330 (Ky. 2006)); see also Cross v.

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Ledford, 120 N.E.2d 118, 122 (Ohio 1954). Generally, the misrepresentation must relate to a

past or existing fact. See Crestwood, 751 F.3d at 444 (citing Radioshack Corp. v. ComSmart,

Inc., 222 S.W.3d 256, 262 (Ky. Ct. App. 2007)); Williams v. Edwards, 717 N.E.2d 368, 374

(Ohio Ct. App. 1998). If it relates to promises or representations concerning future action or

conduct, the party claiming fraud must show that the other party, at the time it made the promise,

had “no intention of keeping” it. Williams, 717 N.E.2d at 374 (citing Tibbs v. Nat’l Homes

Constr. Corp., 369 N.E.2d 1218, 1223 (Ohio Ct. App. 1977)); see also Major v. Christian Cnty.

Livestock Market, Inc., 300 S.W.2d 246, 249 (Ky. 1957).

       No reasonable juror could find by clear and convincing evidence that BOA had “no

intention” of discussing a loan extension when Corporex signed the PNLs.           See Williams,
717 N.E.2d at 374. The evidence—even when viewed in a light favorable to Corporex—reveals

unsuccessful negotiations between two sophisticated parties, not a secret plot by BOA to feign

negotiations in an attempt to drag the loans into default.

       First, as previously explained, the record is devoid of evidence showing that BOA

planned to sell the loans before engaging in negotiations. In fact, the parties negotiated for

months after BOA declared the loans in default and Corporex’s rights of first refusal evaporated.

Seeking to fend off this conclusion, Corporex presses that BOA’s advice to decline third-party

refinancing for the Olympic loan evidences BOA’s plan to bundle all three loans for sale. But

this argument asks the court to infer that BOA passed up an opportunity to be paid in full from

the refinancing so that it could later sell the loan at a loss. At summary judgment, we “will not

draw such unreasonable inferences.” Audi AG v. D’Amato, 469 F.3d 534, 545 (6th Cir. 2006)

(citing Willis v. Roche Biomed. Labs., Inc., 21 F.3d 1368, 1380 (5th Cir. 1994)); see also

Gecewicz v. Henry Ford Macomb Hosp. Corp., 683 F.3d 316, 323 (6th Cir. 2012) (“[W]e need

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not make assumptions that strain credulity.” (citing Visser v. Packer Eng’g Assocs., 924 F.2d
655, 659 (7th Cir. 1991))).

       The record does expose BOA’s skepticism that the parties would ultimately agree on loan

modifications. After internally circulating the initial counterproposal, BOA employee Phil Cole

explained to a colleague: “I really don’t think this is a solution, more an attempt to show that [the

Commercial Real Estate group] thought about it prior to starting the transfers [to SAG].”

Internal documents accompanying the loans’ transfer to SAG signal that an extension was

unlikely. And shortly after the transfer, Andren drafted an internal report projecting foreclosures

on the Madison and Tampa mortgages.

       Other evidence, though, reveals the reasons for these forecasts. Both Andren and Cole

testified that Corporex executives were tough negotiators and difficult to work with. During the

internal approval process of the last agreed-upon term sheets, a BOA employee lauded the SAG

team for accomplishing a deal: “This is a really big win for your team considering the prior dire

outlook due to uncooperative Sponsors.”        These communications show that BOA initially

doubted the success of loan negotiations, not that BOA committed fraud when it promised to

discuss an extension.

       Corporex also directs the court to evidence showing that BOA was prepared to pursue its

contractual remedies if negotiations fell through. BOA sent Corporex notices of default during

the negotiations so as to preserve its right to sue. Also, after sending Corporex the final draft

loan modifications, Andren instructed BOA’s attorneys to “immediately start the suits of the

guarantor.” As the district court recognized, “there is nothing nefarious or unusual about a

commercial entity having a backup plan in the event negotiations fail.” Indeed, the record

confirms that Corporex executives understood that if negotiations proved unsuccessful,

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foreclosure would soon follow.      (R. 232-43 (Corporex executive Bill Butler telling fellow

executive Nick Heekin that “my intent is to put [BOA] in such a position that in the event of [a]

foreclosure action, they will have to defend their unreasonableness.”); Id. (Butler explaining that

Andren “constantly threw the word foreclosure around in the course of conversations” and was

“always talking about her remedies.”).)

       The remaining evidence establishes that BOA negotiated from a position of strength and

refused to extend the loan on less-than-favorable terms. Early in the negotiations, a BOA

executive issued a directive to “get ours first for CPX,” and an employee replied: “Agree. We are

first at [the] table.” Additionally, BOA required that Corporex sign the PNLs containing release

language and added similar terms to the draft loan modifications. Corporex executive Nick

Heekin testified that nearly every lender Corporex worked with included release provisions in

loan documents. And though BOA requested written objections to the terms Corporex deemed

onerous, Corporex declined and ended negotiations.

       Simply put, the record evidences BOA’s hardline stance in negotiations.             But no

reasonable juror could find by clear and convincing proof that BOA had no intention of

negotiating a loan extension when Corporex signed the PNLs. We uphold the PNLs’ validity as

against Corporex’s allegation of fraudulent inducement.

       2. The PNLs Release Corporex’s Promissory-Estoppel and Good-Faith-and-Fair-
          Dealing Counterclaims

       Invoking two related arguments, Corporex next contends that, even if the PNLs are valid,

they release none of Corporex’s claims. First, it invites the court to look beyond the PNLs’ plain

terms and consider the surrounding circumstances to determine that Corporex never intended—

when it signed the PNLs—to release its claims against BOA for promissory estoppel and breach

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of the duty of good faith and fair dealing. Second, it posits that a party cannot release claims of

which it was unaware at the time of signing a release, particularly where the opposing party

concealed the factual basis for the claims.

       In support of its first argument, Corporex cites Sloan v. Standard Oil Co., 203 N.E.2d
237, 240 (Ohio 1964), where the Ohio Supreme Court explained that “the wording of the release

is not conclusive; it is a question of fact whether the parties to a release actually intended to

discharge . . . liability.” Sloan, however, involved rescission based on the doctrine of mutual

mistake. Id. at 239–40; see also Seals v. Gen. Motors Corp., 546 F.3d 766, 771 (6th Cir. 2008)

(“Sloan applies to efforts to avoid a release on the grounds of ‘mutual mistake.’”).

       Regardless, the Ohio Supreme Court has since held that “courts presume that the intent of

the parties to a contract resides in the language they chose to employ in the agreement,” and

“[o]nly when the language of a contract is unclear or ambiguous, or when the circumstances

surrounding the agreement invest the language of the contract with a special meaning will

extrinsic evidence be considered in an effort to give effect to the parties’ intentions.” Shifrin v.

Forest City Enters., Inc., 597 N.E.2d 499, 501 (Ohio 1992) (citing Kelly v. Med. Life Ins. Co.,

509 N.E.2d 411, 413 (Ohio 1987)). In Shifrin, the court refused to consider extrinsic evidence to

alter the terms of releases where the releasing party failed to demonstrate fraud, mutual mistake,

or existence of an ambiguity on the face of the release. Id. at 502.

       Similarly, the Kentucky Supreme Court has held that “courts must look to the language

of the release to determine the parties’ intentions” and “[w]hen no ambiguity exists in the

contract, we look only as far as the four corners of the document to determine that intent.”

Abney v. Nationwide Mut. Ins. Co., 215 S.W.3d 699, 703 (Ky. 2006) (internal citations omitted).

“The fact that one party may have intended different results . . . is insufficient to construe a

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contract at variance with its plain and unambiguous terms.” Id. (quoting Cantrell Supply, Inc. v.

Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky. Ct. App. 2002)); see also 3D Enters. Contracting

Corp. v. Louisville & Jefferson Cnty. Metro. Sewer Dist., 174 S.W.3d 440, 448 (Ky. 2005).

       Here, Corporex fails to demonstrate fraud or patent ambiguity in the release language,

and it never argued below or on appeal that the releases are invalid on mutual-mistake grounds.

Thus, both Ohio and Kentucky law counsel against Corporex’s request for the court to disregard

the unambiguous release terms.

       Second, Corporex insists that the law prevents the PNLs from releasing claims “of which

Corporex was ignorant due to BOA’s deception.” In support, it relies on two cases that applied

federal law, not the law of Ohio or Kentucky. Forry, Inc. v. Neundorfer, Inc., 837 F.2d 259, 263

(6th Cir. 1988) (applying federal contract law in a copyright infringement action); Knoth v. Ill.

Cent. R.R., No. 2005-CA-001882-MR, 2006 WL 1510782, at *1 (Ky. Ct. App. June 2, 2006)

(applying federal law in considering the validity of a release under the Federal Employer’s

Liability Act). Corporex also relies on Creson v. Carmody, 222 S.W.2d 935 (Ky. 1949), and

Isroff v. Westhall Co., No. 14184, 1990 WL 15192 (Ohio Ct. App. Feb. 21, 1990). But in

Creson, the court did not consider a written release and so there was no document from which to

ascertain the parties’ intent. 222 S.W.2d at 935–36. In Isroff, the court, relying in part on Sloan,

concluded that the breach-of-fiduciary-duty claim did not fall within the scope of the release. As

we explained above, the Ohio Supreme Court itself later held in Shrifin that the “intent of the

parties . . . . reside in the language they cho[o]se in [an] agreement.” 597 N.E.2d at 501.

       The PNLs’ unambiguous language releases Corporex’s claims for promissory estoppel

and breach of the implied duty of good faith and fair dealing, warranting summary judgment.

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       C. BOA’s Claims Against Corporex Regarding the Madison Loan

       Because BOA sold the other loans, BOA seeks foreclosure only on the Madison

mortgage. It also requests the amount due on the Madison promissory note. The parties do not

appeal the district court’s determination that Ohio law applies. See Andersons, Inc. v. Consol,

Inc., 348 F.3d 496, 501 (6th Cir. 2003).

       On its foreclosure claim, BOA must show (1) execution and delivery of the note and

mortgage, (2) a valid recording of the mortgage, (3) default, and (4) an amount due. First Nat’l

Bank of Am. v. Pendergrass, No. E-08-048, 2009 WL 1865127, at *3 (Ohio Ct. App. June 30,

2009) (citing Neighborhood Hous. Servs. of Toledo, Inc. v. Brown, No. L-08-1217, 2008 WL
5147452, at *3 (Ohio Ct. App. Dec. 5, 2008)). Corporex leaves unchallenged the district court’s

conclusion that BOA has met these foreclosure elements.

       Furthermore, Corporex makes no argument that it complied with the terms of the

promissory note by curing its default. This failure to cure constitutes an “Event of Default”

under the loan, allowing BOA to accelerate the note terms to require full payment. And Realty

“unconditionally and irrevocably” guaranteed the Madison loan.

       Instead, Corporex asks the court to estop BOA from accelerating the note payment terms

and foreclosing on the mortgage because BOA’s wrongful actions caused its defaults. More

specifically, it claims that, absent BOA’s intentional misrepresentations, Madison would have

made the $4.5 million debt-service-coverage payment—thereby avoiding the first default. But as

the district court recognized, “that does not excuse Madison’s . . . continued failure to repay the

loan nearly four years after it matured.”

       Corporex also presses that BOA’s wrongful conduct caused Madison to lose its anchor

tenant because a loan extension would have allowed Madison to offer the tenant better terms.

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The tenant’s departure, Corporex claims, caused the Madison loan’s second default. But BOA

had no obligation to extend the loan, and good-faith negotiations alone would not have aided

Madison in obtaining a new lease agreement.

       In its reply brief, Corporex admits that it “is not asking to be excused entirely from

paying the loan.”    Instead, “it seeks damages for BOA’s breaches and requests that those

damages be set-off against any amount due BOA.”           As previously explained, Corporex’s

counterclaims fail, foreclosing any right to set-off the amount due. BOA merits summary

judgment on its foreclosure and breach-of-contract claims against Madison and its breach-of-

guarantee claim against Realty.

       D. The District Court’s Denial of Leave to Amend

       Finally, Corporex appeals the district court’s denial of its motion to thrice amend its

counterclaims to include fraud and negligent misrepresentation. The district court adopted the

magistrate judge’s Report and Recommendation denying the motion as untimely and prejudicial.

       We review the district court’s denial of leave to amend a complaint for an abuse of

discretion, reversing only if left with “a definite and firm conviction that the trial court

committed a clear error of judgment.” Leary v. Daeschner, 349 F.3d 888, 904 (6th Cir. 2003)

(quoting Bowling v. Pfizer, Inc., 102 F.3d 777, 780 (6th Cir. 1996)). Ordinarily, a district court

“should freely give leave [to amend the pleadings] when justice so requires.” Fed. R. Civ. P.

15(a)(2). But when a plaintiff moves to amend after a court-ordered deadline, the plaintiff must

demonstrate “good cause” under Fed. R. Civ. P. 16(b)(4) for failure to seek leave earlier. Leary,
349 F.3d at 907. “The primary measure of Rule 16’s ‘good cause’ standard is the moving party’s

diligence in attempting to meet the case management order’s requirements.” Inge v. Rock Fin.

Corp., 281 F.3d 613, 625 (6th Cir. 2002) (quoting Bradford v. DANA Corp., 249 F.3d 807, 809

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(8th Cir. 2001)). We must also consider whether the opposing party will suffer prejudice as a

result of the amendment. Id.

       1. Diligence

       Corporex offered its third amended counterclaims on August 21, 2014—over a year-and-

a-half after the deadline to amend pleadings expired and two weeks before the dispositive-

motion deadline.

       Corporex had all of the evidence it cited in support of its motion by October 7, 2013.

Most of the documents had been produced the previous summer.               In its reply to BOA’s

opposition, Corporex for the first time relied on loan modifications BOA signed with other

borrowers, documents not produced until June 17, 2014. It now maintains that “it was not until

BOA produced [these modification documents] that Corporex confirmed the full extent of

BOA’s fraudulent intent.” These documents were necessary, it argues, to meet the heightened

pleading standard for fraud claims under Fed. R. Civ. P. 9(b).

       Corporex’s argument shows no abuse of discretion for several reasons. First, Corporex

was unconstrained by Rule 9(b), as that rule allows plaintiffs to plead fraudulent intent generally.

Fed. R. Civ. P. 9(b). Moreover, a negligent-misrepresentation claim requires no showing of

fraudulent intent. See Presnell Constr. Managers, Inc. v. EH Constr., LLC, 134 S.W.3d 575, 580

(Ky. 2004); Delman v. City of Cleveland Heights, 534 N.E.2d 835, 838 (Ohio 1989). Second,

the loan modification documents add little to Corporex’s fraud and negligent-misrepresentation

claims, as evidenced by its failure to rely on them in its motion to amend and in opposing

summary judgment. Third, Corporex’s new claims rely on the same theory of misrepresentation

advanced in support of its second amended counterclaims. See Salyers v. City of Portsmouth,

534 F. App’x 454, 461 (6th Cir. 2013) (finding no abuse of discretion in denying leave to amend

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where “Plaintiff knew of the facts and law undergirding th[e] proposed amendment long before

the district court’s deadline for amending pleadings”); Duggins v. Steak ’N Shake, Inc., 195 F.3d
828, 834 (6th Cir. 1999) (finding no abuse of discretion where “[t]he plaintiff was obviously

aware of the basis of the claim for many months, especially since some underlying facts were

made a part of the complaint”).

        Still, Corporex persists that the district court’s discovery stay caused the untimely filing.

The district court stayed discovery from September 2013 to March 2014, ordering the parties to

submit to mediation. But Corporex fails to explain why it neglected to assert these new claims

after it received the bulk of relevant discovery in the summer of 2013—before the stay—or after

the district court lifted the stay in early 2014.

        2. Prejudice

        The district court also found that the late amendment would prejudice BOA because the

new claims would require the court to reopen discovery and postpone the dispositive-motion

deadline. See Gormley v. Precision Extrusions, Inc., 174 F. App’x 918, 921 (6th Cir. 2006)

(“We have repeatedly held that allowing amendment after the close of discovery creates

significant prejudice.”); Duggins, 195 F.3d at 834 (“Allowing amendment at this late stage in the

litigation would create significant prejudice to the defendants in having to reopen

discovery . . . .”).

        Corporex insists that, “[b]ecause this case has always been about BOA’s false

statements,” BOA already conducted discovery on the new claims. BOA correctly responds,

however, that Corporex seeks punitive damages for its new tort claims. If amendment were

permitted, BOA would need additional discovery regarding the various punitive-damages

factors. Ky. Rev. Stat. § 411.186(2); see also Hance v. BNSF Ry. Co., No. 15–5858, 2016 WL

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1391842, at *8 (6th Cir. Apr. 8, 2016) (holding that an amendment would prejudice the opponent

because it never conducted discovery on the issue of liquidated damages), petition for cert. filed,

(U.S. July 18, 2016) (No. 15-5858); Leary, 349 F.3d at 908–09 (holding that reopening discovery

on the issue of damages would prejudice the opponent).

                                               III.

       We AFFIRM the district court’s grant of summary judgment to BOA and denial of

Corporex’s motion to amend.

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