Justice Barbara Jaffe
Grand Pacific Finance (GPF) sought to collect a judgment exceeding $12 million from the Bobker family. Bobker argued the judgment was procured illicitly. Defendants moved for dismissal of the complaint. GPF loaned over $7 million to Hale LLCs, in which the Bobker Family Trust held a large interest, and the loans were secured by a mortgage on Hale Avenue properties, and guaranteed by Bobker. Bobker argued defendants breached a contract claiming 366 Madison was a member of the LLCs, and its participation in the loan breached the LLC agreements. The court stated a participation agreement was not a loan, but constituted an arrangement in which a third-party furnished capital to a lender who extended additional credit to the borrower. It ruled the agreement between GPF and 366 did not transfer or assign title to the loan, finding GPF held title to the loan. Thus, GPF had the exclusive right to enforce Bobker’s obligation under a $1,637,500 loan, and GPF was entitled to sue Bobker on his default. Hence, GPF’s representation it was holder of the note was consistent with both the original loan and the purchase agreement, which authorized GPF to enforce the loan, and there was no misrepresentation. Defendants were granted summary judgment dismissing the complaint.
