Session August 27, 2014
Appeal from the Law Court for Sullivan County (Kingsport) No. C39380(C) E. G. Moody, Chancellor
This appeal arises from a dispute over payment on a note ("the Note"). McCoy Motors, Inc. borrowed $90, 000.00 from A. D. Kinkead ("Kinkead"). The Note provided, among other things, that the loan could be renewed at the end of twelve month periods and that, if Kinkead died before the Note was fully paid, the principal of the unpaid balance would be paid to William L. McCoy, Jr. and Sue McCoy. Kinkead's attorney-in-fact, Mike Cradic ("Cradic"), informed McCoy that Kinkead was demanding that the Note be paid in full. McCoy refused to pay in full but instead continued to make payments on the Note. Kinkead, through Cradic, sued the McCoys in the Law Court for Sullivan County (Kingsport) ("the Trial Court") to compel full payment on the Note. Kinkead died and Cradic pursued the suit. The Trial Court found that demand had been made on the Note, and that at the end of the twelve month period during which demand was made, the Note came due and payable. The Trial Court entered judgment against McCoy Motors, Inc., and the McCoys, individually. McCoy Motors, Inc. and the McCoys appeal. We affirm the Trial Court.
R. Wayne Culbertson and T. Martin Browder, Jr., Kingsport, Tennessee, for the appellants, William L. McCoy, Jr., Sue McCoy, and McCoy Motors, Inc.
Arthur M. Fowler and Arthur M. Fowler, III, Johnson City, Tennessee, for the appellee, Mike Cradic, Executor of the Estate of A. D. Kinkead.
D. Michael Swiney, J., delivered the opinion of the Court, in which Charles D. Susano, Jr., C.J., and John W. McClarty, J., joined.
D. Michael Swiney, Judge
This case involves a loan between relatives that ended up in a lawsuit. Kinkead was an uncle to Mr. McCoy through a marriage to Mr. McCoy's aunt. Cradic is Kinkead's nephew.
In January 1997, McCoy Motors, Inc., a company started and operated by Mr. McCoy, borrowed $90, 000.00 from Kinkead as evidenced by the Note. The Note provides as follows:
McCOY MOTORS, INC.
1848 East Stone Drive
Kingsport, Tennessee 37660 (615) 246-3821
JANUARY 4, 1997
TO WHOM IT MAY CONCERN:
A.D. Kin[k]ead has loaned McCoy Motors, Inc. the sum of $90, 000.00 at the interest rate of 6% per year. This loan is for twelve months and interest is to be paid on the first of the month on a monthly basis. Said loan can be renewed at the end of each twelve months with the interest to be no more than one and one half percent under NEW YORK prime interest rate or less than 6% per year . . . .
In the event of the death of A.D. Kinkead, said principle [sic] of the unpaid balance will be paid to William L. McCoy, Jr & Sue McCoy, at the end of duration of said loan.
Wm L. McCoy, Jr., President A.D. Kinkead
The loan was not signed by the McCoys individually and states clearly that "A.D. Kin[k]ead has loaned McCoy Motors, Inc. the sum of $90, 000 . . . ." From January 1997 through February 2007, McCoy Motors, Inc. paid Kinkead $500.00 per month on the Note. In February 2007, McCoy Motors, Inc. paid $9, 000.00 on the Note. Beginning in March 2007, McCoy Motors, Inc. paid Kinkead $1, 000.00 per month on the Note. The last payment was made in December 2011. In December 2011, the amortized balance on the Note was $28, 676.98.
In July 2010, the elderly Kinkead appointed Cradic, his nephew, as his attorney-in-fact. On July 8, 2010, Cradic visited Mr. McCoy and requested full payment of the Note on behalf of Kinkead. On July 20, 2010, Cradic returned to McCoy Motors, Inc. to follow up with Mr. McCoy on receiving a lump sum check for the balance on the Note. Mr. McCoy refused ...