Opinion ID: 197442
Heading Depth: 1
Heading Rank: 1

Heading: a tale of two letters

Text: 2 In the summer of 1990, defendant-appellant John J. Hayes, III, executed a promissory note for $150,000, secured by a mortgage on premises owned by a real estate trust that he controlled. 1 The lender subsequently failed and plaintiff-appellee Cadle Company (C-Co.) acquired the note (which was then in arrears) from the Federal Deposit Insurance Corporation (FDIC). Cecil C. Cadle (Cadle), C-Co.'s vice president, informed Hayes of the transfer and the parties commenced negotiations. The preliminary haggling is of no consequence because the parties reached an agreement and reduced it to writing. Cadle wrote a letter on February 2, 1993, which stated in pertinent part: 3 This will confirm our agreement that The Cadle Company will delay the repayment period of the subject loan until February 10, 1994 if we receive $80,000 by March 2, 1993. 4 The Cadle Company purchased your loan from the FDIC in liquidation of Boston Trade Bank and has full authority to release the lien on the real estate in return for this $80,000 payment. We hereby agree to release the lien upon payment of the $80,000 by March 2, 1993. 5 The appellant signed the letter the same day, thereby indicating his assent to the proposed terms. 6 On March 3, Landmark Bank mailed a bank check for $80,000 to C-Co. 2 The accompanying transmittal letter, over the signature of James Goodrich, a Landmark vice president, stated in its entirety: Enclosed is a check for $80,000 to satisfy in full the loan you acquired from the FDIC between the Boston Trade Bank and John J. Hayes. Please execute a release and forward it to me as soon as possible. Thank you very much for your help. Cadle endorsed and deposited the check and forwarded a release of the mortgage lien as previously agreed. Hayes made no further payments. 7 In September 1994 C-Co. sued Hayes and a co-guarantor, Kevin O'Reilly, in federal district court, seeking to recover the balance due on the promissory note, plus accrued interest and collection costs. 3 The battle lines were quickly drawn: Hayes insisted that the $80,000 payment had satisfied in full his obligations under the note, whereas C-Co. insisted with equal adamance that the payment did no more than comply with the terms of the February 2 letter agreement (which merely deferred, rather than canceled, the obligation to pay the balance due under the note). 8 To make a tedious tale tolerably terse, the parties agreed to have a magistrate judge, rather than a district judge, preside over the case. See 28 U.S.C. § 636(c)(1) (1994); Fed.R.Civ.P. 73(b). Thereafter, C-Co. moved for summary judgment, proffering, among other supporting documents, the February 2 letter agreement. Hayes filed an opposition and an affidavit. When C-Co. produced Goodrich's sworn statement that he had not negotiated with either Hayes or Cadle about repayment of the loan and that he had not been privy to any agreement that the $80,000 payment would discharge the entire debt, Hayes filed a supplemental affidavit. The magistrate reviewed these and other materials, discerned no genuine issue of material fact, granted C-Co.'s motion, and entered judgment for a sum certain. This appeal followed.