USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 94-1080
RESOLUTION TRUST CORPORATION, AS RECEIVER FOR
COMFED SAVINGS BANK, F.A.,
Plaintiff, Appellee,
v.
HAROLD GOLD AND GRAPHICS LEASING CORP.,
Defendants, Appellants.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
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Breyer,* Chief Judge,
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Campbell, Senior Circuit Judge,
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and Cyr, Circuit Judge.
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Leonard M. Singer, with whom Heidlage & Reece, P.C. was on brief
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for appellants.
Michael J. Engelberg, with whom Ronald M. Jacobs and Nutter,
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McClennen & Fish were on brief for appellee.
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July 27, 1994
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*Chief Judge Stephen Breyer heard oral argument in this matter,
but did not participate in the drafting or the issuance of the panel
opinion. The remaining two panelists therefore issue this opinion
pursuant to 28 U.S.C. 46(d).
CYR, Circuit Judge. Resolution Trust Company (RTC or
CYR, Circuit Judge
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appellee), as receiver for ComFed Savings Bank (ComFed), brought
the present action on July 13, 1993, to recover monies allegedly
due from defendants-appellants Harold M. Gold and Graphics
Leasing Corporation (collectively, "Gold") under their joint
guaranty of loans ComFed made to First Equity Funding Corpora-
tion. Gold did not answer until RTC filed its motion for entry
of default. The late answer admitted the guaranty, contesting
only the amount claimed by RTC. It asserted no affirmative
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defenses.
On September 20, RTC moved for summary judgment. After
failing to file timely opposition, see D. Mass. Loc. R.
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7.1(b)(2), Gold requested more time for discovery, see Fed. R.
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Civ. P. 56(f), and, on October 22, sought leave to amend its
answer to interpose four affirmative defenses, see Fed. R. Civ.
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P. 15(a). The district court thereafter entered summary judgment
for RTC and summarily denied Gold's belated request for leave to
amend its answer, without ruling on the request for additional
discovery, and Gold appealed. We affirm.
I
I
DISCUSSION
DISCUSSION
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Leave to Amend
Leave to Amend
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2
We review denials of leave to amend under Rule 15 for
abuse of discretion, deferring to the district court for any
adequate reason apparent from the record. Demars v. General
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Dynamics Corp., 779 F.2d 95, 99 (1st Cir. 1985); Farkas v. Texas
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Instruments, Inc., 429 F.2d 849, 851 (1st Cir. 1970), cert.
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denied, 401 U.S. 974 (1971). Leave to amend is to be "freely
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given," Fed. R. Civ. P. 15(a), unless it would be futile, North-
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east Fed. Credit Union v. Neves, 837 F.2d 531, 536 (1st Cir.
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1988), or reward, inter alia, undue or intended delay, see Foman
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v. Davis, 371 U.S. 178, 182 (1962). As the Rule 15 motion in the
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present case was not filed until after RTC moved for summary
judgment, Gold was required to demonstrate to the district court
that the proposed amendments were supported by "substantial and
convincing evidence." Torres-Matos v. St. Lawrence Garment Co.,
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Inc., 901 F.2d 1144, 1146 (1st Cir. 1990) (citations omitted).
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There was no such showing.
The first claim Gold advances on appeal is that RTC
waived its contractual right to immediate payment on default, an
affirmative defense Gold sought to interpose in its tardy motion
to amend. The proffered defense is frivolous.
The ComFed demand note provides that, upon default, the
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entire loan balance becomes "immediately due and payable without
notice or demand of any kind." Gold concedes that no principal
or interest payments were ever made after September 15, 1991.
The note further provides that failure to pay any amount, within
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ten days after it is due, constitutes an event of default. The
waiver claim is based on the belated affidavit of Jeffery Stitt
a Gold consultant submitted with Gold's untimely motion for
further discovery under Rule 56(f). Stitt's conclusory charac-
terizations of alleged parol discussions with anonymous RTC
employees at unidentified times fall far short of "clear and
convincing evidence," id., of "decisive and unequivocal conduct
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indicating that [RTC] would not insist that the contractual
provision at issue be performed," Brennan v. Carvel Corp., 929
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F.2d 801, 810 (1st Cir. 1991) (citations omitted) (applying Mass.
law). Indeed, the Stitt affidavit does not constitute competent
evidence as required by Fed. R. Civ. P. 56(e). See Lopez v.
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Corporacion Azucarera de Puerto Rico, 938 F.2d 1510, 1515-16 (1st
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Cir. 1991) (Rule 56(e) requires that affidavits filed in opposi-
tion to summary judgment be based on competent evidence).
As its "Second Affirmative Defense," the proposed
amended answer simply alleged that "The Complaint is barred by
the doctrine of estoppel." Gold presented neither explication
nor argumentation in support of the estoppel claim in the dis-
trict court. McCoy v. Massachusetts Inst. of Tech., 950 F.2d 13,
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22 (1st Cir. 1991) ("theories not raised squarely in the district
court cannot be surfaced for the first time on appeal."), cert.
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denied, 112 S. Ct. 1939 (1992). Nor does Gold discuss the
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estoppel claim on appeal. Thus, even if the estoppel claim had
been pleaded and preserved below, it would be deemed to have been
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waived on appeal. See, e.g., Rhode Island Hosp. Trust Nat'l Bank
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v. Howard Communications Corp., 980 F.2d 823, 828 n.8 (1st Cir.
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1992).
The third affirmative defense, predicated on Gold's
alleged entitlement to a one-year grace period to cure the
default, fails due to the absence of competent evidence of an
enforceable waiver and the fact that the default was never cured.
See supra pp. 3-4.
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Finally, the proposed amended answer asserts based
exclusively on "information and belief" that ComFed failed to
require the borrower to submit appraisals substantiating the 75%
loan-to-collateral-value ratio required under the note, which
allegedly placed Gold at undue risk under its unconditional loan
guaranty. Not only does Gold point to no evidentiary basis for
its "information and belief," it fails even to intimate that such
evidence exists. Moreover, Gold's attempt at delaying the
inevitable adverse judgment would have failed for lack of compe-
tent evidence even if interposed in a timely manner. See Fed. R.
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Civ. P. 56(e); Mesnick v. General Elec. Co., 950 F.2d 816, 822
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(1st Cir. 1991) (where nonmovant has ultimate burden of proof on
matter at issue, summary judgment motion must be met by "defi-
nite, competent evidence"), cert. denied, 112 S. Ct. 2965 (1992).
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Similarly, Gold's perfunctory assertion falls far short of the
"convincing evidence" required to establish a "substantial"
defense. See Torres-Matos, 901 F.2d at 1146. Lastly, this
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5
"defense" is precluded by the express terms of the loan guaranty:
"[Gold] hereby waives any other act or omission of the Bank
(except acts or omissions in bad faith) which changes the scope
of [Gold's] risk." Gold has not alleged bad faith.
In sum, the motion for leave to amend, proffered at the
eleventh hour to fend off summary judgment, proposed four patent-
ly futile affirmative defenses fully meriting summary rejection.
Jackson v. Salon, 614 F.2d 15, 17 (1st Cir. 1980); see also
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Neves, 837 F.2d at 536 ("Federal courts need not tiptoe through
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empty formalities to reach foreordained results.").
Summary Judgment
Summary Judgment
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Gold failed to oppose RTC's motion for summary judgment
within the fourteen-day period prescribed by local rule. See D.
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Mass. Loc. R. 7.1(b)(2). Of course, the failure to file timely
opposition did not necessarily entitle RTC to summary judgment.
Lopez, 938 F.2d at 1517; Mendez v. Banco Popular de Puerto Rico,
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900 F.2d 4, 7 (1st Cir. 1990). Summary judgment was proper only
if the record, viewed in the light most favorable to Gold,
revealed no trialworthy issue of material fact and RTC was
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entitled to judgment as a matter of law. Velez-Gomez v. SMA Life
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Assur. Co., 8 F.3d 873, 875 (1st Cir. 1993); Lopez, 938 F.2d at
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1517. On the other hand, Gold's untimely submissions need not
have been considered by the district court in determining the
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appropriateness of summary judgment. See Mendez, 900 F.2d at 7-8
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(citing cases).
RTC proffered competent evidence that Gold was liable
in the amount claimed under its loan guaranty. Moreover, an
examination of all of Gold's submissions timely as well as
untimely has not disclosed a trialworthy issue of material
fact relating either to the amount of the indebtedness or to any
affirmative defense belatedly asserted in the district court.
There is no basis for vacating summary judgment in these circum-
stances.1
"Just Damages" Under Rule 38
"Just Damages" Under Rule 38
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1Nevertheless, Gold frivolously contends on appeal that the
district court committed reversible error in granting summary
judgment without first ruling on Gold's late and groundless
request for further discovery time, pursuant to Fed. R. Civ. P.
56(f). The request was predicated on the unsubstantiated specu-
lation that it is logically possible that the amount owed under
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the loan guaranty is different than the amount established by
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RTC. Since Gold does not even hint at any discoverable evidence
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to substantiate this speculation, it has presented "no plausible
basis for asserting a belief that 'specified' discoverable facts
probably existed." Mattoon v. City of Pittsfield, 980 F.2d 1, 8
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(1st Cir. 1992) (citing Paterson-Leitch Co. v. Massachusetts
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Munic. Wholesale Elec. Co., 840 F.2d 985, 988 (1st Cir. 1988)).
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Further, Gold made no attempt whatever to demonstrate the requi-
site good cause for failing to conduct the discovery earlier.
Id. It is all too clear, given Gold's dilatory tactics through-
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out this litigation, that the Rule 56(f) initiative was simply a
frivolous, last-ditch effort to stave off final judgment. We
find no abuse of discretion in the district court's implicit
denial of the Rule 56(f) motion in these circumstances. See id.
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(finding insufficient a Rule 56(f) affidavit which "merely
conjecture[d] that something might be discovered but provide[d]
no realistic basis for believing that further discovery would
disclose evidence" of material facts).
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Finally, RTC requests an award of "just damages,"
including attorney fees and double costs, pursuant to Fed. R.
App. P. 38. Even though Gold failed to interpose opposition to
an award of just damages, we have discussed its frivolous appel-
late claims at undeserved length in order to demonstrate their
dilatory aim and amenability to sanction. Moreover, Gold has
offered no other plausible explanation, let alone a justifica-
tion, for its dilatory litigation tactics below or on appeal.
Accordingly, a reasonable attorney fee award and double costs
shall be imposed against Gold for this frivolous, dilatory
appeal. See Cowdell v. Cambridge Mut. Ins. Co., 808 F.2d 160,
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163 (1st Cir. 1986) (pursuant to Fed. R. App. P. 38, awarding
double costs and attorney fee as just damages for frivolous
appeal).
The district court judgment is affirmed. Double costs
The district court judgment is affirmed. Double costs
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and a reasonable attorney fee are awarded to appellee, pursuant
and a reasonable attorney fee are awarded to appellee, pursuant
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to Fed. R. App. P. 38, in an amount to be determined by the
to Fed. R. App. P. 38, in an amount to be determined by the
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court. Appellee is allowed twenty days within which to submit
court. Appellee is allowed twenty days within which to submit
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its bill of costs and an application for a reasonable attorney
its bill of costs and an application for a reasonable attorney
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fee award relating to this appeal. A copy thereof is to be
fee award relating to this appeal. A copy thereof is to be
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served upon appellant's counsel. Appellant shall be allowed
served upon appellant's counsel. Appellant shall be allowed
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twenty days within which to file written objection to the amounts
twenty days within which to file written objection to the amounts
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requested by appellee. SO ORDERED.
requested by appellee. SO ORDERED.
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