Gartner v. Atlantic Nat. Bank of Jacksonville

• Decision Date: 20 September 1977
• Docket Number: No. DD-212,DD-212
• Citation: 350 So.2d 495
• Parties: Samuel GARTNER and Clara Gartner, Appellants, v. ATLANTIC NATIONAL BANK OF JACKSONVILLE, a National Banking Association, Appellee.
• Court: Florida District Court of Appeals

Page 495

350 So.2d 495

Samuel GARTNER and Clara Gartner, Appellants, v. ATLANTIC NATIONAL BANK OF JACKSONVILLE, a National Banking Association, Appellee.

No. DD-212.

District Court of Appeal of Florida, First District.

Sept. 20, 1977.

Rehearing Denied Oct. 27, 1977.

Adam G. Adams, II, of Adams & Adams, Steven A. Werber, of Corrigan, Werber & Moore, Jacksonville, for appellants.

Anderson M. Foote, Jr., of Ulmer, Murchison, Ashby & Ball, Jacksonville, for appellee.

PER CURIAM:

Appellee Bank instituted this suit against Appellants alleging that the Appellants were indebted to the bank in the sum of $1,695,000.00 upon a written instrument of guaranty guaranteeing the obligations of Plummer's Cove Ltd. as debtor of the bank upon construction loans. Appellants filed answer admitting the execution and delivery of the guaranty but denied that they were indebted to the bank under such guaranty. In addition to such answer of admission and denial, Appellants filed affirmative defenses alleging that the bank was guilty of negligent and inequitable conduct in the disbursement and general inspection and management of the construction loan fund and agreement out of which the subject indebtedness arose. Appellants further alleged by such affirmative defenses that the bank's conduct in the handling of such construction loan fund and agreement was without the knowledge or consent of the Appellants and that such conduct prejudiced them, thereby totally or partially relieving them of their obligations under the guaranty agreement. Appellants also filed a counterclaim against the bank for damages claimed to have been suffered by them as the result of the alleged negligent conduct of the bank. The bank did not reply to the affirmative defenses but did answer the counterclaim. In such answer, the bank admitted that substantial portions of the work performed by the owner's contractor were not done in a workmanlike manner or in accordance with the plans and specifications, and that the contractor was paid by the owner for work which was not done or which was incorrectly performed. The bank further admitted that the surety on the contractor's performance bond claimed to be released from its obligation under its bond by reason of the owner's (debtor's) conduct and by reason of alleged negligent conduct on the part of Appellee Bank. The bank admitted by such answer to the counterclaim that there were insufficient loan funds available to complete the project. But it denied that any negligent conduct on its part played any part in the defaults of the contractor or in the fact that there existed such insufficient loan funds for such purpose of completion.

Following the filing of its answer to Appellant's counterclaim, the Appellee Bank moved for summary judgment both as to the main suit of Appellant's and the counterclaim. Appellants had asked for jury trial in their answer and counterclaim.

The disbursement of funds by the bank from the construction loan was to be controlled by the provisions of a building loan agreement between the bank and the debtor (owner). The guaranty agreement, subject of this suit, obligates the guarantors, among whom are the Appellants, to guarantee the due and prompt payment and performances by the debtor of all its indebtednesses and liabilities under said building loan agreement. It is stated in the guaranty agreement that the purpose of the guaranty was to induce the bank to extend credit to the owner (debtor) pursuant to such building loan agreement.

Appellants allege that in and by the terms of the building loan agreement, the bank promised that as a condition to advancing funds to the debtor: (a) the loan documents would be current in all respects, (b) improvements would be constructed with good quality materials and in good and workmanlike condition and in strict accordance with the plans; (c) that the bank would obtain from the debtor evidence that prior bills had been paid and that there were no liens filed against the property, (d) that there were sufficient undisbursed loan funds to complete the project, and (e) that the bank would obtain from the debtor an architect's or engineer's certificate certifying the correctness of each such advance. Appellants contend that the bank disbursed the loan proceeds to the debtor without first having assurance that these conditions were met, thereby jeopardizing their obligations under their guaranty agreement.

In support of its motions for summary judgment, the bank attached affidavits of two of its officers in which they stated that they were not aware of changes in the plans and specifications and that they were not requested to approve changes and did not do so. But Mr. Nuzum gave a deposition in which he stated that in the course of his duties as loan officer of the bank, he customarily inspected the project and that the purpose of his inspection was to determine that the project was being built in accordance with the plans and specifications. He further stated that the inspecting architect for the project was either selected or approved by the bank, and that he, Nuzum, relied on the architect's certification in making disbursements. That at no time did he question the architect's certifications. He further deposed that early in 1974 he suspected that there would not be enough money to complete the project resulting from the contractor changing his schedule of values so that he could get more money on the front end of the contract. Contrary to his affidavit statement that he did not approve any changes in the plans and specifications, he acknowledged in his deposition that an additional loan of $120,000.00 was made for the purpose of paying the costs of change orders to the contract. He further stated in his deposition that he did approve payments to the contractor based upon such changes.

Although Appellants did not file any counter-affidavits in opposition to the motion for summary judgment, it is evident from the admissions made by the bank in its answer to the counterclaim and the testimony of Nuzum given in his deposition which is a part of the record in this case that justiciable issues of fact exist in the record on the question of the bank's alleged negligence in the management of the construction loan fund and whether such conduct...