Opinion ID: 2625300
Heading Depth: 1
Heading Rank: 6

Heading: Debt Discharge

Text: [¶ 35] Lee claims that the basis of the underlying debt was a single loan of $342,000.00, which consisted of $190,000.00 from Key Bank and $152,000.00 from Frontier CDC/SBA. She argues that there was only one $342,000.00 loan made as consideration for the guaranty and that this loan was discharged by acceptance and recordation of the deeds in lieu of foreclosure. She contends the terms of the deeds were unambiguous, in that acceptance and recording of the deeds shall constitute full satisfaction and release of the debt of the Grantors to Grantee, as evidenced by a Commercial Revolving or Draw Note in the principal amount of $342,000.00, dated June 9, 1995, and secured by Grantee's Mortgage on the property described in this Deed. [¶ 36] According to the Lee, however, on June 9, 1995, Key Bank had extended a bridge loan to Doug and Shirley in the amount of $342,000.00 so they would have temporary financing to purchase the car wash while the processing and approval of the SBA loan was being completed. Permanent financing from the SBA (through Frontier CDC) became available on September 7, 1995. The permanent financing involved the extension of a $159,000.00 SBA loan with a second mortgage on the car wash in the same amount. With the bridge loan, Doug and Shirley were able to purchase the car wash in June rather than September 1995. The SBA loan proceeds of $152,000.00 received in September were then applied to the Key Bank bridge loan, reducing it from $342,000.00 to $190,000.00. A Modification of Mortgage was signed by Doug and Shirley on September 7, 1995. The modification states: This constitutes an amendment to said Mortgage to show that the above-referenced Mortgage is intended to secure the amount of One Hundred Ninety Thousand Dollars ($190,000), effective as of the date of receipt by Key Bank of Wyoming Lander of the One Hundred Fifty-Two Thousand Dollars ($152,000.00) loan proceeds, which is evidenced by the second mortgage on the above-referenced property, which mortgage is dated September 7, 1995. A condition required by Frontier CDC/SBA for extending the permanent loan was that Lee sign a guaranty in the amount of $159,000.00, which she executed on September 17, 1995. [¶ 37] To the extent that we must construe the agreement between the parties, our primary focus is in determining whether the language is clear and unambiguous. Pasenelli v. Pasenelli, 2002 WY 159, ¶ 12, 57 P.3d 324, ¶ 12 (Wyo.2002). The question of whether an ambiguity exists is one of law for the court. Hayes v. American Nat'l Bank of Powell, 784 P.2d 599, 604 (Wyo.1989). [¶ 38] Lee maintains that when Doug and Shirley deeded the car wash to Community First, and Frontier CDC released its second mortgage, the entire underlying loan was released, discharging her guaranty obligation. The guaranty, however, allowed the lender to release the security or collateral: The Undersigned hereby grants to Lender full power, in its uncontrolled discretion and without notice to the undersigned, ... to deal in any manner with the Liabilities and the collateral, including, but without limiting the generality of the foregoing, the following powers:    (d) to consent to the substitution, exchange, or release of all or any part of the collateral, whether or not the collateral, if any, received by Lender upon any such substitution, exchange, or release shall be of the same or of a different character or value than the collateral surrendered by Lender. In addition, in 1999, Lee acknowledged and consented to the Lender Agreement between Community First and Frontier CDC, the clear intent of which was to release Frontier CDC's second mortgage for the sole purpose of facilitating sale of the premises, with no effect upon the Frontier CDC loan or the guaranty. And finally, the deed in lieu of foreclosure provided that acceptance and recording of this Deed shall constitute full satisfaction and release of the debt of the Grantors to Grantee, as evidenced by a Commercial Revolving or Draw Note in the principal amount of $342,000, dated June 9, 1995. ... (Emphasis added.) This language unambiguously satisfies the debt only of the grantee, Community First, as that debt is evidenced by the identified promissory note. It does not purport to release the debt of Frontier CDC. LPP was entitled to summary judgment on the discharge issue.