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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. Can I get this form on line,if not where can I obtain one. I am eligible.

  2. What a fine example of the best of the Hoosier tradition! How sad that the AP has to include partisan snark in the obit for this great American patriot and adventurer.

  3. Why are all these lawyers yakking to the media about pending matters? Trial by media? What the devil happened to not making extrajudicial statements? The system is falling apart.

  4. It is a sad story indeed as this couple has been only in survival mode, NOT found guilty with Ponzi, shaken down for 5 years and pursued by prosecution that has been ignited by a civil suit with very deep pockets wrenched in their bitterness...It has been said that many of us are breaking an average of 300 federal laws a day without even knowing it. Structuring laws, & civilForfeiture laws are among the scariest that need to be restructured or repealed . These laws were initially created for drug Lords and laundering money and now reach over that line. Here you have a couple that took out their own money, not drug money, not laundering. Yes...Many upset that they lost money...but how much did they make before it all fell apart? No one ask that question? A civil suit against Williams was awarded because he has no more money to fight...they pushed for a break in order...they took all his belongings...even underwear, shoes and clothes? who does that? What allows that? Maybe if you had the picture of him purchasing a jacket at the Goodwill just to go to court the next day...his enemy may be satisfied? But not likely...bitterness is a master. For happy ending lovers, you will be happy to know they have a faith that has changed their world and a solid love that many of us can only dream about. They will spend their time in federal jail for taking their money from their account, but at the end of the day they have loyal friends, a true love and a hope of a new life in time...and none of that can be bought or taken That is the real story.

  5. Could be his email did something especially heinous, really over the top like questioning Ind S.Ct. officials or accusing JLAP of being the political correctness police.

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