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Cusimano v. First Maryland Sav. and Loan

March 15, 1994

LEONARD CUSIMANO, APPELLANT
v.
FIRST MARYLAND SAVINGS AND LOAN, INC., APPELLEE. DAVID E. WILSON AND 5524 8TH STREET, N.W., DEVELOPMENT CORPORATION, APPELLANTS V. FIRST MARYLAND SAVINGS & LOAN, INC., APPELLEE



Appeals from the Superior Court of the District of Columbia; (Hon. Peter H. Wolf, Trial Judge)

Before Rogers, Chief Judge, Terry, Associate Judge, and Belson, Senior Judge.

The opinion of the court was delivered by: Belson

BELSON, Senior Judge: These appeals arise from orders granting the motions of appellee, First Maryland Savings and Loan, Inc. ("FMSL"), for summary judgment and directing appellants Leonard Cusimano and David E. Wilson, as personal guarantors, to pay a deficiency judgment in an action upon a promissory note, following foreclosure on certain property located at 5524 8th Street, N.W., in Washington, D.C. The foreclosed property served as collateral for a promissory note that evidenced, FMSL asserted, that appellants Wilson and Cusimano guaranteed FMSL, holder of the promissory note, payment of the principal sum of $650,000, together with accrued interest.

Appellants argue that in granting summary judgment to FMSL, the trial court erred because it refused to consider parol evidence regarding the term of the note. Cusimano additionally argues that the trial court made the same error regarding his status as guarantor, and that the trial court lacked personal jurisdiction to hear the case. We agree that no issue of material fact remained with respect to either the actual term of the note or liability on the note, and that FMSL was entitled to summary judgment. We also reject Cusimano's belated assertion that the trial court lacked personal jurisdiction over him. Accordingly, we affirm.

I.

Appellee, FMSL, issued a loan in the amount of $650,000 to intervenor 5524 8th Street, N.W., Development Corporation ("Development Corporation"), as borrower, at the request of the owner of the stock of Development Corporation, Wilson. Wilson had purchased from Cusimano 100% of the stock of Development Corporation, holder of title to the property, a twenty-unit apartment building located at 5524 8th Street, N.W.

Wilson applied to FMSL for a loan to enable Development Corporation to develop that property. Wilson planned to convert the property to condominiums and resell individual units within five years. FMSL was not familiar with Wilson, but had previously transacted business with Cusimano. For that reason, FMSL required a guaranty from Cusimano as well as from Wilson on the loan Wilson requested. In August of 1983, as part of the loan transaction at issue, FMSL issued a commitment letter to Development Corporation in the amount of $650,000, which was received by Wilson and Cusimano. The letter required guarantees by both Wilson and Cusimano. On September 29, 1983, Development Corporation entered into a deed of trust security agreement with the property as collateral for the loan. Development Corporation was the promisor on the note, which was executed by Wilson as its President and Cusimano as its Vice President.

The parties are at odds over the term of the loan. FMSL contends, and the trial court found it undisputed, that the term was for three years. Wilson and Cusimano, however, contend that the term was for five years. *fn1 The commitment letter, as drafted by FMSL and sent to Wilson and Cusimano, as well as the other loan documents, called for payment in full at the end of a three-year term. Wilson states that he struck out the words "three years" in the description of the terms of the commitment letter before signing it, and wrote in "five years" in accordance with conversations with an FMSL employee. Although Wilson initialed this change in term, the change was not initialed by any representative of FMSL or by Cusimano. To the contrary, the final executed version of the commitment letter shows that this change was struck and "three years" reinserted by FMSL.

The loan transaction was evidenced by four documents: (1) the commitment letter dated August 30, 1983; (2) the promissory note dated September 29, 1983; (3) the deed of trust dated September 29, 1983; and (4) the unconditional guarantee dated September 29, 1983. All four were signed by both Cusimano and Wilson. Appellants contend that the commitment letter is paramount among these documents, and point out that the deed of trust provides that "any inconsistencies between the . . . loan commitment, the deed of trust, and any other instruments prepared pursuant to the said Loan Commitment, shall be determined by the terms and conditions of the Loan Commitment." At the settlement on September 29, 1983, Wilson and Cusimano signed the last three documents identified above, all of which indicated a term of three years. Wilson avers in his affidavit that he telephoned an employee of FMSL during the settlement, expressed his concern about the term, and was advised to sign the documents as prepared since there would be no problem in extending the loan. Wilson acknowledges, however, that no specific terms of such an extension had been discussed and no writing evidenced an agreement by FMSL to extend the term of the loan.

In July of 1986, Wilson, on behalf of Development Corporation, wrote to FMSL requesting an extension of the term of the loan. During this same period, a receiver was appointed by the Circuit Court for Montgomery County, Maryland, to liquidate FMSL. *fn2 In late October of 1986, and again in late February of 1987, FMSL advised Wilson by letter that the note had matured on October 1, 1986. Negotiations for refinancing were attempted but, when no agreement was reached, FMSL brought foreclosure proceedings in the Superior Court against Wilson and Cusimano pursuant to the terms of the deed of trust. *fn3 Wilson and Cusimano filed counterclaims against FMSL seeking damages for breach of contract, wrongful foreclosure, breach of fiduciary duty, and interference with prospective economic advantage. Subsequently, Development Corporation intervened as a counterclaimant against FMSL. The foreclosure auction was scheduled for October 1, 1987, at 1:00 p.m. On that same date, but prior to the scheduled sale, Development Corporation filed a voluntary petition for bankruptcy in the United States Bankruptcy Court for the District of Columbia, thereby delaying the sale.

FMSL additionally brought suit against appellants in the Circuit Court for Prince George's County, Maryland, to collect from them as personal guarantors of the note. The Maryland court dismissed the suit because of the forum selection clause in the unconditional guaranty through which the parties had agreed that courts located in the District of Columbia would have jurisdiction over any proceeding to enforce the guaranty, and that the law of the District of Columbia would control. Following this dismissal, FMSL renewed its motion in the bankruptcy proceedings for relief from the automatic stay *fn4 so that it could foreclose on the property. In July of 1988, the United States Bankruptcy Court granted FMSL's request for relief, permitting it to foreclose its deed of trust on 5524 8th Street, N.W. In response, Development Corporation brought an action in the United States District Court for the District of Columbia requesting a stay of the foreclosure sale. That court granted a stay of the foreclosure sale conditioned upon the posting of a supersedeas bond by September 26, 1988. As Development Corporation failed to post the bond, and the parties were unable to reach a compromise settlement, the property was sold at public auction on November 26, 1988, to FMSL for $500,000, resulting in a deficiency balance of $289,848.62 as of mid-November, 1988.

On May 1, 1991, the trial court granted FMSL's motion for summary judgment and dismissed appellants' counterclaim and intervenor Development Corporation's counterclaim. On November 12, 1991, the trial court entered a deficiency judgment for FMSL against Wilson and Cusimano, jointly and severally, in the sum of $365,911.35 with interest at 13% per annum from August 1, 1991. These appeals followed.

II.

A. Cusimano's Personal Guaranty of ...


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