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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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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