FDIC v. 32 Edwardsville, Inc.
| Decision Date | 10 January 1995 |
| Docket Number | Civ. A. No. 93-2275-GTV to 93-2277-GTV. |
| Citation | 873 F. Supp. 1474 |
| Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Midland Bank of Kansas, Plaintiff, v. 32 EDWARDSVILLE, INC., et al., Defendants. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Midland Bank of Kansas, Plaintiff, v. KAW VIEW BARBECUE, et al., Defendants. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Midland Bank of Kansas, Plaintiff, v. K-32 CONVENIENCE STORE, INC. and Conrad Miller, Jr., Defendants. |
| Court | U.S. District Court — District of Kansas |
COPYRIGHT MATERIAL OMITTED
Nancy S. Anstaett, McAnany, Van Cleave & Phillips, P.A., Lenexa, KS, Rosemary Podrebarac, Joseph W. Hemberger, Douglas M. Greenwald, McAnany, Van Cleave & Phillips, P.A., Kansas City, KS, for F.D.I.C.
W. Conrad Miller, Jr., Bonner Springs, KS, for 32 Edwardsville Inc., Tower, Inc.
W. Conrad Miller, Jr., Bonner Springs, KS, Marsha R. Lewellen, Donald E. Bucher, Moore, Bucher & Morrison, P.C., Kansas City, MO, for Conrad Miller, Jr., Barbara J. Miller, K-32 Convenience Store, Inc., Kaw View Barbecue.
Ronald P. Wood, Gates & Clyde, Chartered, Overland Park, KS, for Kansas Masonry Inc.
Andrew T. McCullagh, Walker and Williams, St. Louis, MO, for Kansas City Winnelson Co., Inc.
James R. Orr, Bennett, Lytle, Wetzler, Martin & Pishny, L.C., Prairie Village, KS, Karen A. Dutcher, University of Kansas, Office of the Gen. Counsel, Lawrence, KS, for Raynor Garage Door Co. of K.C.
Michael R. Lawless, Overland Park, KS, for Steve Terrill.
Steve Terrill, pro se.
These consolidated cases were originally brought in the Wyandotte County, Kansas District Court by Midland Bank of Kansas (Midland) and were removed to this court after the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver for Midland. FDIC seeks a money judgment to recover for alleged nonpayment of certain promissory notes, enforcement of personal guaranties, foreclosure of mortgages on real property, and foreclosure of security interests in personal property. The case is before the court on FDIC's motion for summary judgment (Doc. 71) against the remaining defendants, 32 Edwardsville, Inc., Kaw View Barbecue, K-32 Convenience Store, Inc., Conrad Miller, Jr., Barbara Miller, Tower, Inc., Kansas Masonry, Inc., Raynor Garage Door Co. of Kansas City, and Kansas Department of Human Resources. For the reasons set forth below, the motion is granted.
The following facts are either uncontroverted or, if controverted, construed in the light most favorable to the nonmovant defendants. Immaterial facts and factual averments not properly supported by the record are omitted.
Midland was a state chartered banking institution organized and existing under the laws of Kansas. On April 2, 1993, the Office of the State Banking Commissioner found Midland to be insolvent. That same day the FDIC was appointed Midland's receiver.
Conrad Miller, Jr. was the sole shareholder of 32 Edwardsville, Inc., a Kansas corporation. On February 25, 1991, 32 Edwardsville, Inc. executed a promissory note in the principal amount of $1,450,000.00, made payable to Midland. The note provided for an annual interest rate of 9.5% from the date of execution until March 10, 1993, and an annual interest rate of 10% from March 10, 1993, on the unpaid balance until paid in full. FDIC is now the owner and holder of the promissory note.
32 Edwardsville, Inc. has failed to make the required payments of principal and interest on the note, and Midland and the FDIC have demanded payment. The following amounts are due and owing to the FDIC on the note: $1,360,761.34 principal balance; $267,908.82 accrued interest through August 5, 1994; and $372.81 daily interest after August 5, 1994, until the principal is paid in full. Defendants have attempted to controvert the amount owed on this note and the other notes involved in these cases by alleging that plaintiff wrongfully applied the proceeds of a certificate of deposit owned by defendant Conrad Miller, Jr. Defendants' denial of the balances due is completely unsupported, and the facts set forth by the FDIC are therefore deemed uncontroverted.
The promissory note was secured by an existing first mortgage dated June 5, 1989, executed by defendants Prairie Plaza Partnership I, a Kansas partnership, Bernard Egidy, Kathleen T. Egidy, David Booth, and Elaine Booth.1 The mortgage was recorded on June 13, 1989, on the following described real property located in Wyandotte County, Kansas:
Lots 1, 2, and 4, PRAIRIE PLAZA ESTATES, a subdivision in the City of Bonner Springs, Wyandotte County, Kansas, according to the recorded plat thereof.
Also on February 25, 1991, 32 Edwardsville, Inc. executed several other documents which created security interests in favor of Midland in connection with the promissory note. The first was a real estate mortgage, which was recorded on February 27, 1991, covering the property described above which 32 Edwardsville, Inc. owned in fee simple. 32 Edwardsville, Inc. also executed a security agreement granting to Midland a security interest in all personal property used on or about the above-described real estate and all proceeds from such personal property. In an Assignment of Leases, Rents and Other Income, 32 Edwardsville, Inc. granted to Midland a security interest in all leases, rents, and other income generated by the above-described real property. FDIC is now the owner and holder of the mortgages, the security agreement, and the assignment.
On February 25, 1991, Conrad Miller, Jr. and Barbara J. Miller individually executed guaranty agreements by which they guaranteed to Midland the payment of any indebtedness of 32 Edwardsville, Inc. FDIC is now the owner and holder of these guaranties.
On November 1, 1991, 32 Edwardsville, Inc. executed a promissory note in the amount of $125,000.00, payable to Midland. This note provided for an annual interest rate of 9.5% on the unpaid balance. The principal and interest were payable on demand or, if no demand was made, on November 27, 1992. FDIC is now the owner and holder of this note. 32 Edwardsville, Inc. has failed to make the required payments, and Midland and the FDIC have demanded payment. The following amounts are due and owing to the FDIC on the note: $125,000.00 principal; $1,583.33 interest accrued through December 14, 1992; and $32.98 daily interest from after December 14, 1992 until paid in full.
The November 1, 1991, note was secured by a security agreement which granted to Midland a security interest in certain equipment, and by an assignment of lease agreement. These agreements were also entered into on November 1, 1991.
Midland's records contain no documents or written agreements which reflect or refer to any agreement not to pursue the Millers under the terms of their personal guaranties, or not to foreclose the mortgages on the real estate described earlier. Nor do the records contain any documents or written agreements which change the terms of the notes, mortgages, security agreements, or guaranties involved in this action, or reference any representations made to Conrad Miller, Jr. or 32 Edwardsville, Inc. concerning the value of the property or any existing or future leasing of the property.
Kaw View Barbecue is a Kansas general partnership, and its general partners are defendants Conrad Miller, Jr. and Steve Terrill. Mr. Terrill was originally named as a defendant in Case No. 93-2276, but was terminated as a party by judgment entered on October 11, 1994. On November 20, 1991, Kaw View Barbecue, by Steve Terrill and Conrad Miller, Jr. as partners and individually, executed a promissory note in the amount of $54,000.00, payable to Midland. This note was related to Midland's issuance of a letter of credit in the amount of $54,000.00 in which Kaw View Barbecue was the account party and Boatmen's First National Bank (Boatmen's) was the beneficiary. Midland honored the letter of credit by paying Boatmen's the sum of $47,405.98. FDIC is now the owner and holder of the promissory note.
Kaw View Barbecue and its partners have failed to make the required payments of principal and interest on the note and Midland demanded the amount due. The FDIC is currently owed the following amounts on this note: $42,109.50 principal; $6,622.07 interest accrued through August 5, 1994; and $11.54 daily interest from after August 5, 1994 until paid in full.
To secure the payment of this promissory note, Kaw View Barbecue, by Steve Terrill and Conrad Miller, Jr. as partners, executed a security agreement on November 20, 1991. The security agreement grants to Midland a security interest in all of Kaw View Barbecue's furniture, fixtures, equipment, inventory, accounts, contract rights, general intangibles, and a lease agreement. FDIC is now the owner and holder of this security agreement.
On June 20, 1991, K-32 Convenience Store, Inc. executed a promissory note in the amount of $80,000.00 payable to Midland. The note carried an annual interest rate of 10% from the date of execution until paid in full. FDIC is now the owner and holder of the promissory note. K-32 Convenience Store, Inc. has failed to make the required payments of principal and interest and Midland and the FDIC have demanded payment. Midland also issued a letter of credit in the amount of $3,100.00 for the benefit of K-32 Convenience Store, Inc. The following amounts are now due and owing to the FDIC: $71,975.94 principal on the note; $3,100.00 paid under the terms of the letter of credit; $1,477.60 interest on the note accrued through December 14, 1992; and $19.99 daily interest on the unpaid balance of the note from after December 14, 1992, until paid in full.
To secure payment of this promissory note, K-32 Convenience Store, Inc. executed a security...
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