FWB BANK f/k/a FIRST WOMEN'S BANK OF MARYLAND, Plaintiff, v. ALVIN MILLER, et al., Defendants and Third-party Plaintiffs, v. JOSEPH RINALDI, et al., Third-party Defendants., 1992 U.S. Dist. LEXIS 145

Summary

A bank filed suit against guarantors claiming a restaurant had defaulted on a loan and alleging the guarantors were responsible for the unpaid principal balance and accrued interest. The guarantors filed a third-party complaint against the restaurant stockholders seeking indemnification and distribution. The guarantors contended the bank had failed to act in a commercially reasonable manner to protect its security interest in the restaurant after the bank was aware that the they were not longer affiliated with the restaurant, and also alleged that the guarantee had terminated several years back. The court granted the bank's motion for summary judgment against the guarantors and denied the guarantors' cross-motion for summary judgment. The court concluded that the termination of the guaranty agreements did not retroactively alleviate the guarantors' liability for money already lent, as such, the guarantors were liable for the loan to the bank. The court held the defense of impairment of...