The opinion of the court was delivered by: JOHN T. NIXON
Plaintiffs Carter's Court Associates ("Carter's Court"), David E. Mills ("Mills"),
and Richard R. Standel, Jr. ("Standel") brought this action against Metropolitan Federal Savings and Loan Association, the predecessor in interest of the defendants, on November 15, 1990. The action arises out of a loan in the total principal amount of $ 1,525,000 (the "Loan") to Carter's Court, a general partnership. Standel and Mills, and their former partners, Eddie W. Redmon ("Redmon")
and James Larry Williams ("Williams"), all guaranteed the Loan by individual personal suretyship agreements.
The RTC in its capacity as Receiver for Old Met Fed and the RTC as Receiver for New Met Fed counter-sued plaintiffs for recovery under the Loan to New Met Fed and the partial personal guaranty of the Loan of Standel in the amount of $ 321,868.85.
The case was tried before the Court without a jury on November 16, 1993. Based upon the evidence presented at trial and the complete record in the case, the Court makes the following findings of fact and conclusions of law. With respect to the plaintiff's claims and the defendants' counter-claims, the Court rules in favor of the defendants. As to the defendants' request for an award of prejudgment interest, the Court rules in favor of the plaintiffs.
Carter's Court was a Tennessee general partnership conducting business in Williamson County, Tennessee. In May 1989, the partners of Carter's Court were Williams, Redmon, Standel, and Mills. Standel became a general partner of Carter's Court on May 1, 1986.
On December 16, 1985, Carter's Court borrowed $ 1.2 million from Old Met Fed pursuant to two promissory notes Carter's Court executed in favor of Old Met Fed in the amounts of $ 300,000 and $ 900,000. The loans were obtained for the purpose of financing the acquisition and renovation of certain commercial real property located in Williamson County, Tennessee known as Carter's Court. Contemporaneously with the execution of the notes, Carter's Court executed a Loan Agreement, a Deed of Trust, Assignment of Rents and Security Agreement, and a Collateral Assignment of Rents and Leases. The two notes each had a stated maturity date of December 31, 1989.
On or about August 8, 1986, Old Met Fed and Carter's Court entered into a First Amendment to Loan Agreement, Promissory Notes, Deed of Trust, Assignment of Rents and Security Agreement, and Collateral Assignments of Rents and Leases (collectively, the "First Amendment"). At this time, Carter's Court executed a third promissory note in the amount of $ 325,000. Contemporaneously with the execution of the First Amendment and the $ 325,000 note, Standel executed a suretyship agreement in favor of Old Met Fed whereby Standel guaranteed the payment to Old Met Fed of all indebtedness of Carter's Court to Old Met Fed up to the amount of $ 612,500.
Old Met Fed and Carter's Court entered into a Second Amendment to Loan Agreement, Deed of Trust, Assignment of Rents and Security Agreement and Collateral Assignment of Rents and Leases (collectively, the "Second Amendment") on February 11, 1987 providing for, inter alia the consolidation of the three promissory notes into one note for $ 1,525,000. Contemporaneously with the execution of the Second Amendment and the $ 1,525,000 Note, Standel executed another suretyship agreement in the amount of $ 381,250 (the "Second Standel Suretyship Agreement").
On February 23, 1989, Carter's Court executed a promissory note to Old Met Fed having a stated maturity date of February 23, 1990 in the amount of $ 1,499,001.72 evidencing renewal of the $ 1,525,000 note. In June of 1989, the Carter's Court loan went into default.
Once the Carter's Court loan went into default, Old Met Fed had the right under the Loan Agreement, the Deed of Trust, the Second Amendment and Standel's Suretyship Agreements to accelerate and collect the Carter's Court debt, and to foreclose on the Deed of Trust.
In May 1989, the partners of Carter's Court informed Old Met Fed of the need for a debt restructuring prior to default. Negotiations between Carter's Court and Old Met Fed continued over the next eleven months. On August 16, 1989, Carter's Court submitted a Loan restructuring proposal to Met Fed. Met Fed promised a response by August 31, 1989. Met Fed did not respond until October 3, 1989.
The RTC as Receiver for New Met Fed was the owner and holder of a security interest in twenty-two shares of common stock in Industrial Plating Company, Inc. as evidenced by an Assignment, Pledge and Security Agreement dated September 8, 1989, and as perfected by possession of the stock and by the recording of a UCC-1 financing statement in the Office of the Tennessee Secretary of State. However, the stock has been sold and is no longer in the possession of Redmon or the RTC as Receiver for New Met Fed.
Standel delivered to Old Met Fed a notice of attempted discontinuance of his suretyship ...