United States District Court, E.D. Michigan, Southern Division
K. MAJZOUB UNITED STATES MAGISTRATE JUDGE.
AND ORDER: (1) DENYING PLAINTIFF'S MOTION FOR LEAVE TO
FILE MOTION FOR SUMMARY JUDGMENT (ECF NO. 28); (2) DENYING
WITHOUT PREJUDICE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
(ECF NO. 23); (3) DENYING AS MOOT DEFENDANTS' MOTION TO
STRIKE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (ECF NO.
25); AND (4) AMENDING SCHEDULING ORDER TO EXPEDITE
D. BORMAN UNITED STATES DISTRICT JUDGE.
Comerica Bank filed this lawsuit on March 30, 2017 (ECF No.
1) to recover on four loans made to certain of the Defendants
and now alleged to be in default, as well as various
guaranties of those loans made by certain other of the
Defendants. In a July 21, 2017 Civil Case Management and
Scheduling Order, this Court set the close of fact discovery
on January 19, 2018, and the close of expert discovery on
February 19, 2018. (ECF No. 22 at 1.) Three days after the
Court entered the Civil Case Management and Scheduling Order,
Plaintiff filed a Motion for Summary Judgment. (ECF No. 23.)
The parties have since filed a flurry of briefs concerning
that Motion: Defendants' Motion to Strike (ECF No. 25),
and Plaintiff's subsequent Motion for Leave to File
Motion for Summary Judgment that Plaintiff filed in support
of it (ECF No. 28). The substance of Plaintiff's position
is that because Defendants admitted that they executed the
relevant contracts and guaranties, and because Defendants
have also admitted that they did not make all payments
required of them under those contracts and guaranties, the
Court should grant summary judgment to Plaintiff immediately.
The Court disagrees, and concludes that Plaintiff has not
demonstrated the existence of extraordinary circumstances
that would justify the disposition of its Motion for Summary
Judgment at this early stage in the litigation.
H of the Scheduling Order provides that “[a]bsent
extraordinary circumstances communicated to the Court in the
form of a motion seeking relief from this rule, motions for
summary judgment should be filed after the close of fact and
expert discovery and only one motion for summary judgment may
be filed.” (ECF No. 22 at 5.) This is consistent with
the well-established principle that before ruling on a
summary judgment motion, a district court “must afford
the parties adequate time for discovery, in light of the
circumstances of the case.” Plott v. Gen.
Motors Corp., Packard Elec. Div., 71 F.3d 1190, 1195
(6th Cir. 1995) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 250 n.5 (1986) and Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986)). And while a party
whose case has been challenged by a summary judgment motion
generally “bears the obligation to inform the district
court of his need for discovery, ” this obligation may
be reduced when that motion is filed before any discovery is
conducted at all. Vance By & Through Hammons v.
United States, 90 F.3d 1145, 1149 (6th Cir. 1996)
(reversing a grant of summary judgment, even though the
non-movant raised his need for discovery for the first time
after summary judgment was entered against him, owing to
“the fact that no discovery was conducted
before the motion for summary judgment was filed and
decided”) (emphasis in original).
Sixth Circuit has held that it is not an abuse of discretion
for a district court to deny a party's request for
discovery, filed in opposition to a summary judgment motion,
when that party has made “only general and conclusory
statements . . . regarding the need for more discovery . . .
.” Ball v. Union Carbide Corp., 385 F.3d 713,
720 (6th Cir. 2004). This is true of Defendants' blanket
assertion that they “have requested documents necessary
to evaluate the veracity of Plaintiff's claims and to
support Defendant[s'] defenses” (ECF No. 26 at 2)-
although this could also be reasonably read to incorporate
the various affirmative defenses that Defendants did in fact
assert when they answered the Complaint. (ECF No. 15 at 18.)
Court need not opine on whether Defendants' responses are
too general or conclusory to justify discovery, however,
because it is apparent from the parties' various
submissions that at least some discovery is warranted before
this Court can properly entertain any motions for summary
Plaintiff is correct that “Defendants admit in their
answer that they signed their respective [promissory] notes
and guaranties [and that] they stopped making payments . . .
.” (ECF No. 27 at 4; see also ECF No. 15
¶¶ 14-23, 25-27, 29, 31, 33-34.) Plaintiff is
mistaken, however, in its contention that Defendants admit
they are in default on all the various obligations. (ECF No.
27 at 4.) Defendants specifically denied these allegations.
(ECF No. 15 ¶¶ 35-40.) Second, Plaintiff maintains
that “Defendants have not contested the amounts
owed” on the various obligations (ECF No. 27 at 4), but
the fact that Defendants have not done so at this stage does
not amount to a specific admission or denial-which, the Court
notes, could be obtained in discovery. Third, as
mentioned above, Defendants asserted various affirmative
defenses in its answer to the Complaint. (ECF No. 15 at 18.)
All of these issues implicate exactly the sort of fact
questions that discovery is designed to help parties
also argues that an additional extraordinary circumstance is
present in this case: that any delay in adjudicating
Plaintiff's Motion for Summary Judgment would allow
Defendants to conceal assets so as to frustrate future
collection of their debts. Specifically, Plaintiff maintains
that Michigan's recently-enacted Qualified Dispositions
in Trust Act, Mich. Comp. Laws § 700.1041 et
seq., creates a vehicle for the transfer of assets that
shields them from the reach of creditors, and allows those
creditors only a two-year window to challenge such transfers.
Plaintiff then claims that it has “reason to
believe” that Defendant James Esshaki has made one more
asset transfers of this variety (ECF No. 30 at 6 n.1), and
specifies one: the transfer of Defendants James and
Bernadette Esshaki's “marital home to their
Qualified Personal Residence Trust by a quit claim deed dated
September 22, 2012.” (ECF No. 27 at 5; Ex. A.)
Court need not reach the question of whether a fraudulent
transfer risk constitutes extraordinary circumstances
justifying a departure from this Court's standard
practice of entertaining summary judgment motions only after
discovery, because even if so, Plaintiff has failed to
demonstrate that such a risk exists in the case at bar. While
Plaintiff claims that the 2012 real estate transfer was
“undertaken after Defendants had defaulted on their
loans and while they were unable to pay their debts as they
came due” (ECF No. 27 at 5), nothing in the record
developed thus far suggests that any Defendant defaulted on
any obligation at any time prior to January 2017. Moreover,
as Defendants point out, the Qualified Dispositions in Trust
Act by its terms applies only to asset transfers made after
its effective date of March 8, 2017, see Mich. Comp.
Laws § 700.1050(1), and it thus cannot encompass the
2012 real estate transfer. This does not establish that
Plaintiff's concerns about asset transfers are baseless,
of course, but absent evidence or even specific allegations
that any such transfers were made after the
statute's effective date-yet another factual gap that
could be filled through discovery-the Court does not see
these concerns as grounds for proceeding to the summary
judgment phase prematurely. Accordingly, the Court will deny
Plaintiff's Motion for Leave to File Motion for Summary
Judgment, and deny Plaintiff's Motion for Summary
Judgment without prejudice.
reasons stated above, the Court hereby DENIES Plaintiff's
Motion for Leave to File Motion for Summary Judgment (ECF No.
28), and DENIES WITHOUT PREJUDICE Plaintiff's Motion for
Summary Judgment (ECF No. 23). On the basis of these rulings,
the Court also DENIES AS MOOT Defendants' Motion to
Strike Plaintiff's Motion for Summary Judgment.
Defendants have not contested the loan documents, the Court
will amend its Scheduling Order to shorten the time period
for discovery, and require expedited discovery.