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COA finds argument that documents were ambiguous is really ‘a failure to read’

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A real estate investor who argued that he should not be held personally liable because the loan documents were ambiguous was reminded by the Indiana Court of Appeals that “a failure to read does not equate with an ambiguity….”  

In Steven Weinreb v. Fannie Mae, 49A04-1211-PL-587, the appeals court affirmed the trial court’s partial grant of summary judgment and grant of monetary award to Fannie Mae. Specifically, the court found the loan documents were not ambiguous; the non-recourse carve-outs and prepayments premium provisions of the note were enforceable; and the guaranty as well as the loan documents were not unconscionable.

It also concluded that claim preclusion and collateral estoppel do not preclude Steven Weinreb from challenging the lower court’s partial grant of summary judgment.

Weinreb, a resident of New York, and his business partners formed WK Strawbridge, LLC, in 2006 to acquire the title to Strawbridge Green Apartments in Indianapolis. Permanent financing was eventually sought from Arbor Commercial Funding, LLC, which provided a commercial loan in the principal amount of $6 million through Fannie Mae.

Beginning in December 2009, a series of mechanic’s liens were filed against the apartments, totaling $72,287.12. In July 2010, Strawbridge LLC failed to pay its monthly installments under the promissory note. A month later, Fannie Mae sent Strawbridge LLC and Weinreb a demand letter for immediate payment of the loan installments, ordering Strawbridge LLC to remit tenant rental payments directly to Fannie Mae, and advised that failure to pay amounted to a default under the terms of the note.

On July 20, 2011, Fannie Mae was awarded summary judgment in rem in the amount of $7.81 million. The trial court ordered foreclosure but found that Fannie Mae’s claims against Weinreb were not resolved by this judgment and could be pursued at a later date.

Fannie Mae then bought the apartments from the sheriff’s sale for $6.61 million, leaving a deficiency of $1.81 million plus interest and expenses. In Feb. 2012, Fannie Mae filed a complaint against Weinreb for the deficiency.

Weinreb argued he had not read the loan documents prior to signing them because the complexity of the papers was overwhelming. However, the trial court rejected Weinreb’s arguments and issued a partial summary judgment in favor of Fannie Mae and against Weinreb in the amount of $1.81 million.

Weinreb appealed, again asserting, in part, that the loan documents were extrinsically ambiguous which made summary judgment inappropriate. He did not raise an issue with the language but, rather, he argued that the implementation of the agreements resulted in latent ambiguity.

The court of appeals found no ambiguity in either the note, the mortgage or the guaranty. It also did not find any ambiguity coming during the implementation.

“A failure to read does not equate with an ambiguity arising from the implementation of the clear terms of the Note, Mortgage and Guaranty,” Judge Patricia Riley wrote for the court.
 

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  1. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  2. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

  3. Hi there I really need help with getting my old divorce case back into court - I am still paying support on a 24 year old who has not been in school since age 16 - now living independent. My visitation with my 14 year old has never been modified; however, when convenient for her I can have him... I am paying past balance from over due support, yet earn several thousand dollars less. I would contact my original attorney but he basically molest me multiple times in Indy when I would visit.. Todd Woodmansee - I had just came out and had know idea what to do... I have heard he no longer practices. Please help1

  4. Yes diversity is so very important. With justice Rucker off ... the court is too white. Still too male. No Hispanic justice. No LGBT justice. And there are other checkboxes missing as well. This will not do. I say hold the seat until a physically handicapped Black Lesbian of Hispanic heritage and eastern religious creed with bipolar issues can be located. Perhaps an international search, with a preference for third world candidates, is indicated. A non English speaker would surely increase our diversity quotient!!!

  5. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

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