Title: Federal Financial Co. v. Landers

State: vermont

Issuer: Vermont Supreme Court

Document:

Federal Financial v. Landers (98-273); 169 Vt. 570; 740 A.2d 345

[Filed 8-Apr-1999]

                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 98-273

                              MARCH TERM, 1999

Federal Financial Company	       }	APPEALED FROM:
                                       }
                                       }
     v.	                               }	Washington Superior Court
                                       }	
Dexter A. Landers	               }
                                       }	DOCKET NO. 193-04-95 Wncv

             In the above-entitled cause, the Clerk will enter:

       Defendant Dexter A. Landers appeals a grant of summary judgment in
  favor of plaintiff  Federal Financial Company.  Defendant maintains that a
  genuine issue of material fact regarding  the capacity in which he
  co-signed an unsecured promissory note remained in dispute, and that  the
  trial court improperly denied him an opportunity to present defenses to
  payment.  Defendant  urges that the defenses of impairment of recourse,
  laches, and estoppel presented material facts  for resolution before a
  jury.  We affirm.    
  
       Defendant is president of Northfield Wood Products and has, on
  occasion, obtained loans  to finance businesses.  Defendant met Rima
  Burton, president of Comart, Inc., through his work  with the Central
  Vermont Development Corporation.  On August 11, 1992, Comart executed the 
  unsecured note for $25,000 at 8% interest with First National Bank of
  Vermont.  Burton signed  the note as president of Comart and individually
  to secure funds for a clothing business.   Defendant co-signed the note. 
  The document does not describe the capacity in which defendant  signed the
  Comart note, but his signature appears directly under Burton's. The note
  matured on  November 9, 1992 and, because of Comart's financial
  difficulties, was in default.

       On January 29, 1993, the State Banking Commissioner declared First
  National insolvent and  promptly closed it.  On February 3, 1993,
  defendant, apparently unaware that the Bank had failed  but cognizant of
  Comart's financial difficulties, sent a letter to one of the Bank's
  officers  expressing interest in purchasing certain assets of Comart if the
  Bank were to repossess those  assets as a secured lender.  Defendant's
  offer contained a condition that the Bank apply $25,000  of the proposed
  asset purchase price to the Comart note.  First National Bank was closed at
  that  time and never replied to the letter.

       The Federal Deposit Insurance Corporation (FDIC) was appointed
  receiver of the closed 

 

  Bank.  On April 6, 1993, FDIC sent a letter to defendant indicating
  that he was wholly liable for  the $25,000 plus accrued interest. 
  Defendant responded by letter on April 19, 1993 and offered  $5,000 cash to
  "clear all my obligations in this loan."  Defendant also acknowledged that
  he had  invested time and money in trying to keep Comart alive, but that
  his efforts had ultimately failed.  FDIC declined defendant's offer.

       Despite the notice to defendant that FDIC considered him liable on the
  note, defendant took  no further action to resolve the debt.  In November
  1993, Burton filed for bankruptcy protection,  and Comart dissolved. 
  Burton was discharged from bankruptcy in March 1994.  Plaintiff, Federal 
  Financial Co., acquired the Comart note from FDIC in 1995 and sent a demand
  letter to defendant  on February 13, 1995.  Defendant failed to pay the
  debt, and plaintiff sued.

       Defendant's principal defense was that plaintiff's unreasonable delay
  in pursuing payment  from Comart and Burton made it impossible to collect
  from them and deprived him of the  opportunity to be reimbursed by them. 
  Defendant also raised equitable estoppel and laches  defenses. 

       Our standard for reviewing a grant of summary judgment is the same as
  the trial court.  See  Madden v. Omega Optical, Inc., 165 Vt. 306, 309,