Litigation

This summary also appears under Contracts

 

Issues: Claim that the lender-Wells Fargo's assignments to plaintiff-Dime were ineffective with the result Dime lacked standing to enforce the parties' credit agreement and was not the "real party in interest"; Defining terms not defined by the contract; Freemont Ins. Co. v. Izenbaard; "Right" and "power"; Failure to cite supporting authority; Hughes v. Almena Twp.; The trial court's requirement that defendants must have been harmed or prejudiced before they may challenge Wells Fargo's alleged breach of contract by assigning its rights and duties to Dime; Bowles v Oakman; Standing; Cadle Co. v. City of Kentwood; MOSES, Inc. v. SEMCOG; Lansing Sch. Educ. Ass'n v. Lansing Bd. of Educ.; MCR 2.201(B)(1); Continental Nat'l Bank v. Gustin

Court: Michigan Court of Appeals (Unpublished)

Case Name: Dime, LLC v. Griswold Bldg., LLC

e-Journal Number: 57728

Judge(s): Per Curiam – Markey, Owens, and Fort Hood

 

The court held that the trial court did not abuse its discretion in denying defendants' motion for summary disposition or in denying their motion for a new trial because the lender-Wells Fargo had the authority and followed the procedures of the "notwithstanding" clause of § 12.14 of the credit agreement to properly appoint the plaintiff-Dime, its affiliate, the successor administrative agent. Thus, "the trial court correctly ruled that Dime possessed standing and was the real party in interest to enforce the credit agreement and loan documents." On appeal, defendants continued to argue that Wells Fargo's assignments to Dime were ineffective, and thus Dime lacked standing to enforce the parties' credit agreement and was not the real party in interest. They argued that Dime could not "enforce the credit agreement because only the administrative agent may and Wells Fargo never properly appointed Dime successor administrative agent." Defendants conceded that under § 12.14, Wells Fargo "could remain as Administrative Agent and assign its 'rights and duties' under the loan documents to an affiliate, like Dime." But they argued such an assignment excludes "powers and duties" of the administrative agent, so the "power" to enforce the credit agreement was not included in Wells Fargo's assignments to Dime. Thus, they contended that only Wells Fargo as the administrative agent has the "power" to enforce the credit agreement. The court disagreed. "The last sentence of § 12.14 of the credit agreement clearly and unambiguously permitted Wells Fargo to assign its rights and duties as administrative agent to Dime, without having to first resign as administrative agent and without having to follow the procedures outlined in the first part of that section. Unambiguous contracts are enforced as written." Since the credit agreement "permitted Wells Fargo to assign its rights under the agreement to its affiliate, and Wells Fargo did so, Dime could exercise all rights under the credit agreement that Wells Fargo possessed." Defendants' argument that there was a difference between a "right" and a "power" under the credit agreement "such that Dime lacked the authority to enforce the credit agreement is not supported by the plain and ordinary meaning of those terms or by any legal authority." The credit agreement explicitly referred to "commencing legal action on default as a 'right' of the lenders and the administrative agent." While "'power' relates to the more general ability to act, and 'right' relates to a more specific interest in a claim, property, or legal guarantee, this slight difference" did not support defendants' claim that "Dime as the assignee of Wells Fargo pursuant to the authority of the last sentence § 12.14 lacks the authority as successor administrative agent to commence legal action to enforce the loan documents and guarantees." Further, defendants did not cite any legal authority to support the asserted distinction between "right" and "power" as to enforcement of contract rights. Affirmed.

 

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