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Monday, July 13, 2009

Ind. Decisions - Two Indiana appeals decided today by the 7th Circuit

In BKCAP, LLC, et al v. CAPTEC Franchise Trust (ND Ind., Magistrate Judge Nuechterlein), an 18-page opinion, Judge Tinder writes:

This case demonstrates that even experienced, sophisticated business entities can encounter difficulty when drafting carefully negotiated loan documents. Since July 2007, the plaintiffs and the defendant have been at loggerheads over the meaning of just a handful of lines out of several hundred in their five-page, single-spaced Note. Unfortunately, this appeal cannot bring their stalemate to an end, and more litigation lies ahead. However, while disputes over the meaning of language in loan documents can be somewhat dry, this one is more interesting than most such cases.

The plaintiffs, special purpose entities that we refer to as “Borrowers,” obtained several $1 to 2 million mortgage finance loans from the defendant, or “Lender.” Each of the loans required Borrowers to pay off the debt at around 10% interest over 15 to 20 years. Borrowers had the right to pay off the loans early, but subject to a “Prepayment Premium” if they prepaid before ten years into the loan terms. When Borrowers tried to prepay the loans after only eight years, the parties disagreed on how to calculate the Prepayment Premium. Their dispute led to this diversity action, in which the parties seek a declaratory judgment as to the correct interpretation of the Prepayment Premium. The district court granted summary judgment in favor of Lender, concluding that the unambiguous contract language supported Lender’s interpretation. We conclude, however, that the contract is ambiguous, making it inappropriate to resolve the meaning of the contract at the summary judgment stage. We therefore remand for a trial on the question of the parties’ intended meaning of the Prepayment Premium.

In U.S. v. Jackson (ND Ind., CJ Miller), a 7-page opinion, Judge Bauer writes:
In 1998, Demetrius Jackson was convicted of possession with intent to deliver crack cocaine. Ten years later, Jackson moved to have his sentence retroactively amended pursuant to amended Sentencing Guideline § 2D1.1, which reduced the penalties for most crack cocaine drug offenses. The district court denied the motion, finding that it had no authority to modify the sentence because Jackson was sentenced under the career offender provisions of the Guidelines, U.S.S.G. § 4B1.1, which were not amended. On appeal, Jackson claims that he no longer qualifies as a career offender and, thus, the district court erred in finding that he was ineligible for a sentencing reduction. We affirm.

Posted by Marcia Oddi on July 13, 2009 10:58 AM
Posted to Ind. (7th Cir.) Decisions