Opinion ID: 2585689
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Heading: The Existence of a Credit Agreement

Text: The Bank argues that its alleged commitment to provide a permanent loan to Mi-Dee constitutes an oral credit agreement under the plain meaning of the statute. We agree. Under the statute, a credit agreement is defined in relevant part as: A contract, promise, undertaking, offer or commitment to lend, borrow, repay, or forbear repayment of money, to otherwise extend or receive credit, or to make any other financial accommodation. § 38-10-124(1)(a) (emphasis added). Although we have not previously considered whether assurances between lenders to the same borrower constitute credit agreements under the credit agreement statute of frauds, Colorado cases applying the statute have adopted a broad definition of the term credit agreements. In Univex Int'l., Inc. v. Orix Credit Alliance, Inc., we noted that the statute does not apply only to claims involving transactions which are characterized exclusively as credit agreements, but also ... to claims which merely relate to credit agreements. 914 P.2d 1355, 1358 (Colo.1996). We then concluded that the statutory definition of a credit agreement was sufficiently broad to include a sales agreement containing financing terms for the proposed sale. Id. Similarly, in Pima Fin. Serv. Corp. v. Selby, the court of appeals held that a settlement agreement resolving a deficiency dispute constituted a credit agreement under the statute because it waived the terms of the original credit agreement based on which the deficiency claim was made 820 P.2d 1124, 1127 (Colo.Ct.App.1991); see § 38-10-124(1)(a)(II) (including in the definition of credit agreement [a]ny amendment of, cancellation of, waiver of, or substitution for any or all of the terms or provisions of any . . . credit [agreement].). Courts in other jurisdictions with similar statutes have also applied the definition of credit agreement broadly. See e.g., Schering-Plough Healthcare Prod., Inc. v. NBD Bank, N.A., 98 F.3d 904, 911 (6th Cir.1996) (holding that under the Michigan statute of frauds, a credit agreement included issuing a cashier's check in exchange for a check drawn on a sweep account, certifying a check drawn on a sweep account, and making funds represented by a check drawn on such an account available); Whirlpool Fin. Corp. v. Sevaux, 96 F.3d 216, 222-23 (7th Cir.1996) (holding that promises to invest constituted a credit agreement under the Illinois Credit Agreements Act because at least part of the intended investment package included debt financing); Cavalier Homes of Ala., Inc. v. Sec. Pac. Hous. Serv., Inc., 5 F.Supp.2d 712, 717 (E.D.Mo.1997) (holding that a repurchase agreement between a manufacturer and a retailer's lender constituted a credit agreement under Missouri law); Bank One, Springfield v. Roscetti, 309 Ill.App.3d 1048, 243 Ill.Dec. 452, 723 N.E.2d 755, 763 (1999) (holding that an oral modification of a guarantee fell within the Illinois statute of frauds because the guarantee constituted part of a comprehensive credit agreement); Rural Am. Bank of Greenwald v. Herickhoff, 485 N.W.2d 702 (Minn.1992) (holding that an agreement to apply a borrower's payments to one loan before another constituted a financial accommodation, and therefore a credit agreement under the Minnesota statute of frauds). In the present case, Morris's claims against the Bank arise from alleged assurances by the Bank that Morris's bridge loans were to be paid off by proceeds from a permanent FmHA loan to Mi-Dee that had been approved and was to be funded shortly. The plain language of the statute indicates that the Bank's assurances constitute a commitment to lend money to Mi-Dee, and thus a credit agreement under the credit agreement statute of frauds. See § 38-10-124(I). Nothing in that language, or in the relevant case law, limits the definition of credit agreement to commitments to lend money made only to the party receiving the loan proceeds. Rather, the cases suggest a broad definition of the term credit agreement. Accordingly, we hold that the oral representations made by the Bank in this case to Morris constitute a credit agreement under the credit agreement statute of frauds.