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Keywords

contractdamagessummary judgmenttrust

defendantmotionsummary judgmentleasemotion for summary judgment

Related Cases

Branch Banking and Trust Co. v. Hamilton Greens, LLC, 942 F.Supp.2d 1290

Facts

On September 1, 2006, Hamilton Greens, LLC, along with Richard Bellinger and others, secured a $3,375,000 acquisition loan from Colonial Bank. Bellinger executed a continuing and unconditional guaranty for the loan. After Hamilton Greens defaulted on the loan, Branch Banking and Trust Company, as the successor to Colonial Bank, sought to enforce the guaranty against Bellinger, who argued that the lender had waived its rights and failed to mitigate damages.

On September 1, 2006, Hamilton Greens, LLC (“Hamilton Greens”), Defendant Richard Bellinger (“Defendant” or “Bellinger”), Chad Labonte, Roland Labonte, and others entered into an agreement with Colonial Bank to secure a $3,375,000.00 acquisition loan for real property.

Issue

Did the lender waive its right to enforce the guaranty by extending the loan's maturity date, and was the repayment deadline a material misrepresentation that could support the guarantor's estoppel defense?

Bellinger first argues that BB & T waived its ability to enforce the guaranty by materially modifying the loan agreement through extensions of the loan's maturity date post-notice of Bellinger's withdrawal as a guarantor.

Rule

Under Florida law, a continuing guaranty remains in effect until revoked and covers all transactions within the contemplation of the agreement. A guarantor is bound by an agreement that permits extensions of time for performance, and the creditor has no obligation to notify the guarantor regarding its transactions with the principal debtor.

In Florida, 'a continuing guaranty remains in effect until revoked … [and] covers all transactions, including those arising in the future, which are within the … contemplation of the agreement.'

Analysis

The court found that Bellinger's estoppel defense failed because the repayment deadline was not a material misrepresentation, as Bellinger had contractually agreed to allow the lender to extend the loan without his consent. Furthermore, the lender's actions did not constitute a waiver of its rights under the guaranty, as Bellinger had not provided evidence of revocation of his guaranty. The court emphasized that the terms of the guaranty clearly allowed for modifications without affecting Bellinger's obligations.

Bellinger's estoppel defense thus necessarily fails as a matter of law based on the clear and unambiguous terms of the guaranty.

Conclusion

The court granted summary judgment in favor of the lender, ruling that Bellinger remained liable under the guaranty despite his claims of waiver and estoppel.

For the reasons that follow, BB & T's motion for summary judgment is granted.

Who won?

Branch Banking and Trust Company prevailed in the case because the court found that the terms of the guaranty were clear and unambiguous, and Bellinger's defenses did not hold under Florida law.

BB & T's rejection of the attempt to release Bellinger provides support for distinguishing Miami National Bank, where the lender ostensibly recognized the guarantor's revocation by removing him from the list of guarantors.

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Keywords

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Parmenter v. Barstow, 22 R.I. 245, 47 A. 365, 63 L.R.A. 227

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