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Buridi v. Branch Banking and Trust Co.

United States District Court, W.D. Kentucky, Louisville

March 7, 2014

ABDUL G. BURIDI, Plaintiff,
v.
BRANCH BANKING AND TRUST COMPANY, Defendant.

MEMORANDUM OPINION

CHARLES R. SIMPSON, III, District Judge.

This case is before the Court on a motion to amend complaint (DN 26) filed by Plaintiff Abdul G. Buridi ("Buridi") and a motion to dismiss (DN 35) filed by Defendant Branch Banking and Trust Company ("BB&T"). For the reasons set forth below, the Court will grant the motion to amend complaint, and deny the motion to dismiss.

BACKGROUND

Unless otherwise indicated, the following facts are undisputed. Buridi is a member of Kentuckiana Investors, LLC ("KI"), a group of physician-investors who collectively invested in a hospital construction project in Clark County, Indiana. As originally conceived, the construction plan called for a 60-bed hospital, with 12 beds to be used as an emergency department. In fall 2006, BB&T agreed to loan $21.5 million to finance the construction of the hospital, but only on condition that Buridi and several other physician-investors personally guaranteed repayment of the debt. On July 12, 2007, Buridi signed a guaranty agreement (the "Guaranty") in an unspecified amount.

Shortly thereafter, the loan was finalized and construction of the hospital began. Contrary to the initial plan, however, the hospital was constructed with only 34 beds and without an emergency department. After opening, the hospital suffered severe financial problems, ultimately causing it to default on the loan from BB&T. Upon default, BB&T assigned the loan along with Buridi's Guaranty to Rialto Capital Management ("Rialto").

In February 2011, Rialto's affiliate RL BB Financial, LLC ("RLBB"), filed an action in Clark County Circuit Court seeking to enforce Buridi's Guaranty. Upon RLBB's motion for summary judgment, final judgment was entered against Buridi in the amount of $430, 000. However, on August 27, 2012, Buridi filed a motion for relief from judgment pursuant to Indiana Trial Procedure Rule 60(B)(2), alleging that newly discovered evidence demonstrated that Buridi could have asserted a fraud defense to enforcement of the Guaranty. In his motion, Buridi explained that he had obtained new evidence during the course of a related action he had filed against various members of KI in Jefferson County Circuit Court. Specifically, Buridi claimed that the deposition testimony of Drs. Christodulous Stavens ("Stavens") and Eli Hallal ("Hallal"), as well as certain documents produced during discovery, strongly suggested that BB&T was aware that the hospital would be built with only 34 beds at the time it solicited his Guaranty. Based on this evidence, Buridi claimed that BB&T had committed fraud sufficient to void his Guaranty. Ultimately, however, the court denied Buridi's motion for relief from judgment on the grounds that the evidence failed to establish a basis for finding fraud on the part of BB&T.

PROCEDURAL HISTORY

On July 12, 2012, Buridi filed the present action in Jefferson County Circuit Court, alleging that BB&T's failure to disclose the change in construction plans amounted to fraud by omission, negligent misrepresentation, and a breach of its duty of good faith and fair dealing. On August 10, 2012, BB&T removed the action on the basis of diversity jurisdiction. (DN 1).

On August 24, 2012, BB&T filed a motion to dismiss for failure to state a claim, arguing that: 1) BB&T did not have a duty to inform Buridi regarding the change in scope of the construction project; and 2) that Buridi's claims were barred by the doctrine of claim preclusion to the extent they should have been raised as defenses in the RLBB action. On March 25, 2013, we held that: 1) Buridi had failed to establish necessary elements of his fraud by omission and negligent misrepresentation claims; and 2) Buridi's good faith and fair dealing claim was not barred by the doctrine of claim preclusion because the claim had not accrued at the time of the earlier suit. (DN 20).

On May 7, 2013, Buridi filed a motion to amend complaint (DN 26) seeking to add a claim of intentional misrepresentation. In response, BB&T argues that Buridi's proposed amendment is futile to the extent his newly asserted intentional representation claim is barred by the doctrine of claim preclusion. Additionally, BB&T has renewed its previous motion to dismiss (DN 35) Buridi's good faith and fair dealing claim on the grounds that it was also barred by the doctrine of claim preclusion.

Having considered the parties' briefs and being otherwise sufficiently advised, the Court will now address the motion to amend complaint and the motion to dismiss.

STANDARD

A court must first consider a pending motion to amend before dismissing a complaint. Rice v. Karsch, 154 F.Appx. 454, 465 (6th Cir. 2005). Accordingly, the Court will address the motion ...


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