In re Newport Plaza Associates, LP

• Citation: 129 BR 326
• Decision Date: 18 July 1991
• Docket Number: Adv. No. 90-1041.,Bankruptcy No. 90-10378
• Parties: In re NEWPORT PLAZA ASSOCIATES, L.P., Debtor. NEWPORT PLAZA ASSOCIATES, L.P., Plaintiff, v. DURFEE ATTLEBORO BANK, Defendant.
• Court: United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Rhode Island

129 B.R. 326 (1991)

In re NEWPORT PLAZA ASSOCIATES, L.P., Debtor NEWPORT PLAZA ASSOCIATES, L.P., Plaintiff, v. DURFEE ATTLEBORO BANK, Defendant.

Bankruptcy No. 90-10378, Adv. No. 90-1041.

United States Bankruptcy Court, D. Rhode Island.

July 18, 1991.

Robert S. Bruzzi, Providence, R.I., for debtor/plaintiff.

Michael R. McElroy, Schacht & McElroy, Providence, R.I., for defendant.

DECISION AND ORDER

ARTHUR N. VOTOLATO, Jr., Bankruptcy Judge.

Before the Court, on briefs, is the defendant, Durfee Attleboro Bank's Motion for Summary Judgment. Based upon the applicable law, and because there is no genuine issue of material fact to be tried, the Motion for Summary Judgment is GRANTED.

The undisputed facts are as follows: On February 8, 1988, Newport Plaza Associates executed and delivered to the Bank a promissory note in the amount of $2,200,000, secured by a mortgage on real estate. The parties also entered into a loan agreement to fund the construction of the subject project which is located on J.T. Connell Road, in Newport, Rhode Island. On November 10, 1988, after months of quarreling, charges, and counter-charges between Newport and the general contractor, DRL, Inc., Newport terminated DRL as the general contractor, all work on the project stopped, and the loan went into default. Thereafter, mechanics' liens were placed on the property by DRL and a number of unpaid subcontractors. On November 1, 1989, the parties negotiated a new written agreement wherein the Bank agreed to accept $881,000 in full payment of Newport's original obligation, and to waive its claim for the balance of approximately $500,000, if payment of the $881,000 was made in full on or before February 1, 1990. Newport failed to make the required payment, or any part of it.

The Debtor now argues that on December 20, 1988, the Bank had orally agreed to resume financing the project if Newport "satisfied certain conditions within a reasonable time." Newport maintains that it satisfied those conditions, as required, sometime during March 1989, but that the Bank reneged on its promise to resume financing, and that as a result, Newport sustained the damages sought in this adversary proceeding. Newport argues that the November 1, 1989 agreement did not extinguish or impair its claim against the Bank for breach of the alleged December 20, 1988 oral agreement, while the Bank maintains that said agreement did indeed extinguish any such prior Newport claims. We conclude that the relevant contract law, as applied to the instant facts, supports the Bank's position. See, e.g., Wigton v. Rosenthall, 747 F.Supp. 247 (S.D.N.Y.1990); Salo Landscape & Construction Co., Inc. v. Liberty Electric Company, 119 R.I. 269, 376 A.2d 1379 (1977).

In our view, the November 1, 1989 written agreement is an accord. "An accord is a contract under which an obligee here, the bank promises to accept...