Court Opinion

ID: 9716147
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:28:21.158218+00
Date Added: 2024-06-11T18:23:42.285927
License: Public Domain

MILLER, Judge,
concurring and dissenting.
While I concur with much of the majority decision, I must dissent from the affirmance of the trial court's judgment in favor of the Shoups on the issue of fraud and punitive damages. I cannot agree with the majority on these issues because I cannot find any evidence to support the trial court's finding that the bank represented one set of terms to the Shoups and later drafted another, more odious, set of terms.
The trial court found that, although the Shoups' initially anticipated a short-term financial arrangement of two to three years duration, "the Bank suggested long-term financing and offered to loan the Shoups $55,000.00 on the basis of a 20 twenty year fixed interest rate loan, payable in 240 equal monthly installments of $530.77. Mr. Monnett wrote a letter to the Shoups on October 7, 1985, offering the bank's commitment for such a 20 year loan at a 10% interest rate secured by the Shoup's mortgage on their Greencastle home." When this document was executed, both parties were bound by its terms.
I fail to see how the due-on-sale clause could be viewed as more odious than any previous understanding of the parties-even if there could be such an understanding outside the terms of the mortgage. The Shoups themselves claim the bank agreed the Shoups would pay the remainder of the mortgage when they sold the Greencastle property. The due-on-sale clause provided the same terms, that is, that the Shoups had to pay the remainder of the mortgage when they sold the property. It seems to me that the terms are exactly the same, and are certainly not more odious.
Further, the Shoups failed in their burden of proving that the execution of the long-term standard mortgage rather than a short-term loan was, under the circumstances, to their detriment. Their evidence permits us only to speculate whether the standard long-term mortgage, despite its due-on-sale clause and prepayment clause, was superior or inferior for their purposes to a short-term loan which might mature before the sale of the house or a short-term installment loan with astronomical monthly payments.
The problem here is not that the bank substituted different and more odious terms; rather it is that the parties did not contemplate the possibility the property would be sold on land sale contract. Because they did not, they never reached a common understanding of when the property was "sold" in the event of the execution of a land sale contract. When the later dispute occurred concerning the meaning of the due-on-sale provision, it was not the result of an actionable fraud by the bank.
I must therefore dissent to the majority's affirmance of the trial court's judgment that Central National Bank is liable for fraud, and from their affirmance of the trial court's award of exemplary damages based upon fraud. I concur in the remainder of the majority opinion.