A Jackson County circuit judge ruled that a bank was owed more than $668,000 in principal and interest and $289,000 in attorneys’ fees on a subdivision development loan that fell into default.
“It was developed. [The defendants] just didn’t sell the lots as quickly as they wanted to,” said Shane Mecham of the Levy Craig Law Firm, which represented plaintiff Great American Bank.
In 2007, Raveill Investments and four individual defendants had taken out a $1.3 million development loan from a bank in Lone Jack, which was later acquired by Great American. The bank alleged the loan went into default in 2012.
Mecham said the defendants filed numerous motions and counterclaims in the case as well as launching a number of affirmative defenses rooted in the Missouri Credit Agreement Statute and other bases. The judge found in favor of the plaintiff in dismissing the counterclaims and affirmative defenses.
Mecham said many of the counterclaims relied on theories of lender liability.
“Nearly all of those theories depended on an allegation that the bank or someone at the bank had made some sort of oral representation that was in addition to or different than the loan documents themselves,” he said. “The court held that under basic law and statutes that specifically applied to banks and loan documents that those promises, if they are made — which the bank denied throughout the litigation — are not enforceable. That’s why summary judgment was appropriate as opposed to having to go to trial to determine the contested fact of whether anyone at the bank ever said anything like that.”
Mecham said some of the alleged oral representations may have been based on misconstrued conversations with the bank about hypothetical ways the loan might be restructured but none of these represented an actual agreement.
“Oral representations are not enforceable,” he said. “They have to be recorded in the loan documents. The loan documents themselves say they have to be amended in writing. They can’t be amended orally.”
Mecham said that other motions were based on allegations that the loan documents were ambiguous or didn’t comply with various legal requirements.
He said some of the counterclaims were linked to the fact that the loan had originated initially with a different institution that was later purchased by Great American Bank. He said that brought up an interesting legal issue, but the court ultimately ruled that the previous institution had done nothing wrong.
“But if they had, what liability if any would Great American Bank have for the conduct of another bank?” he said. “Ultimately, it became a moot point.”
Messages for John M. Duggan, Deron A. Anliker and Matthew L. Heffner of Duggan Shadwick Doerr & Kurlbaum, which represented the defendants, were not returned.
Breakdown: $590,087 loan balance, $78,424 accrued interest, $289,919 in attorneys’ fees
Venue: Jackson County Circuit Court at Independence
Case number/date: 1316-CV00307/July 22, 2014
Judge: Kenneth R. Garrett III
Last pretrial demand: $590,087
Last pretrial offer: $0
Caption: Great American Bank v. Raveill Investments LLC, Timothy G. Raveill, Lori Lynne Raveill, William J. Putthoff and Lola M. Putthoff
Plaintiff’s attorneys: Shane C. Mecham and Robert M. Pitkin, The Levy Craig Law Firm, Kansas City
Defendants’ attorneys: John M. Duggan, Deron A. Anliker and Matthew L. Heffner, Duggan Shadwick Doerr & Kurlbaum, Overland Park, Kansas