Am. Bank Of St. Paul v. Coating Specialties Inc, No. A09-2059.

CourtCourt of Appeals of Minnesota
Citation787 N.W.2d 202
Decision Date10 August 2010
PartiesAMERICAN BANK OF ST. PAUL, Respondent,v.COATING SPECIALTIES, INC., et al., Defendants,andCo-op Credit Union of Montevideo, Appellant,v.Coating Specialties, Inc., et al., Defendants.
Docket NumberNo. A09-2059.

787 N.W.2d 202

AMERICAN BANK OF ST. PAUL, Respondent,
v.
COATING SPECIALTIES, INC., et al., Defendants,
and
Co-op Credit Union of Montevideo, Appellant,
v.
Coating Specialties, Inc., et al., Defendants.

No. A09-2059.

Court of Appeals of Minnesota.

Aug. 10, 2010.


787 N.W.2d 203
Syllabus by the Court

When a party agrees to subordinate to a lender that party's interest in loans made to a borrower, but does not specify either any particular loans or an expiration date, and the borrower's loans are later consolidated into a new loan, the subordination agreement applies to the new loan.



Samuel J. H. Sigelman, Kirstin D. Kanski, Lindquist & Vennum P.L.L.P., Minneapolis, MN, for respondent.

Douglas D. Kluver, Nelson Oyen Torvik P.L.L.P., Montevideo, MN, for appellant.

Considered and decided by TOUSSAINT, Chief Judge; LANSING, Judge; and SHUMAKER, Judge.
787 N.W.2d 204
OPINION
TOUSSAINT, Chief Judge.

Appellant Co-op Credit Union of Montevideo (the credit union) challenges the summary judgment for $50,000 granted to respondent American Bank of St. Paul (the bank) on the basis of the parties' subordination agreement. Because we conclude that the district court did not erroneously apply the law in granting summary judgment or in denying the credit union's motion for reconsideration, we affirm.

FACTS

The bank issued two $25,000 short-term loans, or promissory notes, to Coating Specialties, Inc. (CSI). The security agreements executed with the notes defined “note” as “the Note executed by [CSI] in the principal amount of $25,000 ... together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.” About one month later, the two $25,000 loans were rolled into a single $100,000 line of credit.

The credit union, which held a first-priority security interest in CSI's assets, drafted and executed a subordination agreement stating that:

[The bank] has agreed to Loan $50,000.00 to [CSI] for the following purposes: operating expenses[.]
... [The credit union] hereby (1) consents for [CSI] to obtain said loan from [the bank] for such purposes and (2) agrees to and hereby subordinates in favor of [the bank] and its successors and assigns all liens, security interests, rights, claims, and demands of every kind against the property of the premises specifically described as:
Inventory, accounts receivable, and equipment.

When CSI defaulted on its repayment obligation, the bank accelerated payment. The bank then brought a lawsuit against CSI; it resulted in a judgment of $76,851.93 for the bank. The bank then filed a cross-claim against the credit union to enforce the subordination agreement against the $66,790.25 that the credit union had received as gross proceeds from the sale of CSI's inventory and equipment that the credit union had seized.

The district court concluded that the subordination agreement was unambiguous, that the subordination agreement applied to CSI's current indebtedness to the bank, that the subordination agreement could not be altered by alleged oral statements, and, on the credit union's motion for reconsideration, that the credit union's net proceeds from the sale, $54,028.34, exceeded the subordination amount, and the district court granted summary judgment...

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17 practice notes
  • Stanek Holdco, Inc. v. Water Res. Grp., Civil Action No. 19-cv-3194-WJM-SKC
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • 17 Agosto 2020
    ...party that has not agreed to arbitrate a dispute cannot be required to arbitrate."); Am. Bank of St. Paul v. Coating Specialities, Inc., 787 N.W.2d 202, 205 (Minn. Ct. App. 2010) ("[A] party that fails to include a term in a contract is bound by the agreement and cannot use extrinsic eviden......
  • Trebelhorn v. Agrawal, A17-0584
    • United States
    • Court of Appeals of Minnesota
    • 20 Noviembre 2017
    ...to demonstrate ambiguity in an otherwise unambiguous contract by extrinsic evidence. Am. Bank of St. Paul v. Coating Specialties, Inc. , 787 N.W.2d 202, 205 (Minn. App. 2010), review denied (Minn. Oct. 27, 2010). Instead, "the [unambiguous] contract language must be given its plain and ordi......
  • S. Robideau Constr., Inc. v. Hiber, A16-0451
    • United States
    • Court of Appeals of Minnesota
    • 29 Agosto 2016
    ...motion was considered and will not be allowed to supplement the record on appeal." Am. Bank of St. Paul v. Coating Specialties, Inc., 787 N.W.2d 202, 206 (Minn. App. 2010) (citing Minn. Gen. R. Pract. 115.11 1997 advisory comm. cmt.), review denied (Minn. Oct. 27, 2010). A moving party must......
  • Ford Motor Co. v. County of Ramsey, C5-07-4696
    • United States
    • Tax Court of Minnesota
    • 5 Noviembre 2013
    ...cited evidence was not previously available despite diligent efforts to obtain it. Cf. Am. Bank of St. Paul v. Coating Specialties, Inc., 787 N.W.2d 202, 206 (Minn.App.2010) (citing comment to Rule 115.11). Concerning the core notion of newly discovered evidence, commentators have noted: “R......
  • Request a trial to view additional results
17 cases
  • Stanek Holdco, Inc. v. Water Res. Grp., Civil Action No. 19-cv-3194-WJM-SKC
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • 17 Agosto 2020
    ...party that has not agreed to arbitrate a dispute cannot be required to arbitrate."); Am. Bank of St. Paul v. Coating Specialities, Inc., 787 N.W.2d 202, 205 (Minn. Ct. App. 2010) ("[A] party that fails to include a term in a contract is bound by the agreement and cannot use extrinsic eviden......
  • Trebelhorn v. Agrawal, A17-0584
    • United States
    • Court of Appeals of Minnesota
    • 20 Noviembre 2017
    ...to demonstrate ambiguity in an otherwise unambiguous contract by extrinsic evidence. Am. Bank of St. Paul v. Coating Specialties, Inc. , 787 N.W.2d 202, 205 (Minn. App. 2010), review denied (Minn. Oct. 27, 2010). Instead, "the [unambiguous] contract language must be given its plain and ordi......
  • S. Robideau Constr., Inc. v. Hiber, A16-0451
    • United States
    • Court of Appeals of Minnesota
    • 29 Agosto 2016
    ...motion was considered and will not be allowed to supplement the record on appeal." Am. Bank of St. Paul v. Coating Specialties, Inc., 787 N.W.2d 202, 206 (Minn. App. 2010) (citing Minn. Gen. R. Pract. 115.11 1997 advisory comm. cmt.), review denied (Minn. Oct. 27, 2010). A moving party must......
  • Ford Motor Co. v. County of Ramsey, C5-07-4696
    • United States
    • Tax Court of Minnesota
    • 5 Noviembre 2013
    ...cited evidence was not previously available despite diligent efforts to obtain it. Cf. Am. Bank of St. Paul v. Coating Specialties, Inc., 787 N.W.2d 202, 206 (Minn.App.2010) (citing comment to Rule 115.11). Concerning the core notion of newly discovered evidence, commentators have noted: “R......
  • Request a trial to view additional results

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