Dominion Bank, NA v. Moore

• Citation: 688 F. Supp. 1084
• Decision Date: 22 July 1988
• Docket Number: Civ. A. No. 88-0067-R.
• Court: U.S. District Court — Western District of Virginia
• Parties: DOMINION BANK, N.A., Plaintiff, v. Robert W. MOORE, Executor, et al., Defendants.

688 F. Supp. 1084

DOMINION BANK, N.A., Plaintiff, v. Robert W. MOORE, Executor, et al., Defendants.

Civ. A. No. 88-0067-R.

United States District Court, W.D. Virginia, Roanoke Division.

July 22, 1988.

Douglas W. Densmore, Terri Faye Dial, Woods, Rogers & Hazlegrove, Roanoke, Va., for plaintiff.

H.F. Salsberry, Jr., Hunt & Wilson, Charleston, W.Va., for defendants.

OPINION

TURK, Chief Judge.

This case is before the court on plaintiff's motion for summary judgment. After reviewing the record and considering the parties' oral argument, the court finds no material facts to be in dispute. Thus, plaintiff's motion is granted.

The core of this dispute is judgment on a note from the makers and guarantor. The parties do not dispute that defendants, John Wilkinson and Haskell Savage, borrowed $2,500,000.00 from the plaintiff, First National Exchange Bank of Virginia, now Dominion Bank, National Association ("Dominion") on January 23, 1981. Wilkinson and Savage executed a promissory note to evidence this loan and the note was guaranteed by defendant, W & H Contracting Co., Inc., pursuant to a loan and note agreement. Wilkinson, Savage and defendant, Matawa Mining & Development Co., Inc. ("Matawa"), executed a stock pledge agreement pursuant to which Wilkinson and Savage used the loan proceeds to acquire the stock of Matawa as security for the loan. Matawa also executed a deed of trust on certain real property to secure the loan.

Over the next several years, defendants paid Dominion a portion of the owed principal and interest, however, rarely in accordance with the loan terms. Because of delinquent payment history, the loan terms were modified on three separate occasions. Defendants do not dispute that in each instance, the modification was in writing, contained integration clauses and defendants were represented by counsel. Because each modification occurred after defendants were already behind in their payments, the modifications were supported by consideration in that any delinquencies were cured. Review of each modification is unnecessary. However, the parties agree that the third modification resulted in the term note being changed to a demand note.

Dominion contends, and defendants do not dispute that the last interest payment was received in October, 1986. During the remainder of 1986 and throughout 1987, negotiations proceeded between the parties over a proposed lease of mining property between defendant, Matawa and Madison Limited Partnership. However, no lease agreement was finalized. On December 9, 1987, Dominion demanded payment on the note. Defendants failed to comply with the demand. As a result, Dominion filed its complaint on February 12, 1988. Shortly thereafter, Matawa filed for bankruptcy protection, and this court dismissed Matawa as a defendant in this action. The remaining defendants filed an answer and a counterclaim. This court severed the counterclaim. Thus, this case is limited to an action on a promissory note and any applicable defenses.

From defendants' oral and written argument, the court has abstracted three principal objections to Dominion's motion for summary judgment. First, defendants allege that various factual questions have yet to be discovered. Second, defendants contend that Dominion's calling of the demand note in contradiction of alleged oral agreements evidenced a larger pattern of bad faith and misconduct on the part of Dominion. And third, defendants argue that Dominion wrongfully withheld consent of proposed leases of defendants' property.

As to the factual questions which defendants assert exist, the court acknowledges that the discovery process is still in its initial stages as to all possible issues concerning the parties' relationship. However, the court notes that the factual questions defendants believe material go to the severed counterclaim and not the present action on the note. Thus, although some facts may be disputed or as of yet undiscovered, the material facts concerning the note are in the record and undisputed. Thus, the factual "questions" raised by defendants fail to defeat a proper motion for summary judgment in that no genuine issue of fact material to this action has been raised. Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed. 2d 202 (1986).

As to Dominion's calling of the demand note, defendants do not dispute that on February 28, 1986, the parties agreed to convert the term note to a demand note with quarterly interest payments. By its nature a demand note may be called at any time, for any reason. See Va. Code Ann. § 8.1-208 (1965) (Official Comment). Defendants contend Dominion's calling of the note was just one part of a pattern of misconduct. This pattern of misconduct allegedly began in the fall of 1984 with Dominion's demand of additional collateral from the defendants. Defendants "reluctantly" met this demand through the sale of a trailer park and mining equipment. The conversion to a demand note, defendants contend, was at Dominion's insistence. Defendants agreed only because...