Based upon only the information provided on this page about case 17-1:
1) What is the ambiguity in the agreement that Reger believes provides hime with a proper basis for his cause of action againt National City Bank?
2) What other stakeholders might be affected by whether or not Reger won this case?
arhispidin every content express De duty i pod does to low the National Cry breached the Commons by CASE 17-1 FACTS: Reger Development borrowed money from interest payments and does not deviate from the discussed the possibility of calling the note, Reper Drvel City had reached its contract by demanding payment The court also addressed Reger's argument that. Na Reger's being in good economic standing, and that the had inappropriately changed the terms of the contract with Reger had met with the bank prior towing the line of quote, the court found Reger's argument to be a out Reger's full consent. As revealed in the following REGER DEVELOPMENT, LLC. NATIONAL CITY BANK UNITED STATES COURT OF APPEALS, SEVENTH CIRCUIT 592 F30 759 (2010) National City Bank, using a revolving line of credits a demand note note. the that City opment sued the bank for breach of contract and fraud. The district court granted National Clry's motion to dis- miss Reger's complaint credit to discuss the loan. Reger asked about changing the terms of the credit agreement. The bank representative Duncan, responded thar the National City documents were non-negotiable. Reger then executed the contract. The main ment on demandes in light of this controlling lower question here is whether the promissory instrumententi complaint opens ac. Reper Development's alle tles National City to demand payment from Reger at will. National Ciry moved to dismiss Reger's complaint. The and capriciously demanding payment under the line of Conde district court granted this motion, and Reger appealed. even though Reyer Development was in good conding and laterally changing and tempting to change the fundamental ISSUE: Did National City breach its contract with Reger of the Contract Documents without Reger Development's Development? Reper Development attempts to substantiate the first part of the beach claim by prsting to several provisions in the Note that believe REASONING: The first clause in the note in question reads be fundamentally inconsistent with the nature of a demands ment. These include the "INTEREST AFTER DEFAULT"provision PROMISE TO PAY Roger Development, LLC Bow which reads, in relevant part. "Tulpon default, including failure to pay promises to pay to National City Bank Lender", er der in upon final maturity, the interest rate on this Note shall be increased lawful money of the United States of America, on demand, the by adding a 2.000 percentage point margin:"the prepayment channe principal amount of Seven Hundred Fifty Thousand & 00/100 which allows the borrower to pay down allora portion of the amount Dollars (5750.000,00) or so much as may be outstanding. owed cartierunkis doc" and the close that grants National Clay together with interest on the unpaid outstanding principal bal the right to access the borrower's financial information. Reper Devel opment describes the new a financial insecurity provision that ance of each advance. Interest shall be calculated from the date conditions the night to demand payment on some economicas of each advance until repayment of each advance. We are not persuaded by the suggestion that these references PAYMENT Borrower will pay this loan in full immediately to due dates and default somehow overpower the repeated upon Lender's demand. Borrower will pay regular monthly pay- explicit contract language setting forth the lender's right to ments of all accrued unpaid Interest due as of each payment demand payment at any time. date, beginning July 25, 2007, with all subsequent Interest pay ments to be due on the same day of each month after that DECISION AND REMEDY: The court afirmed the district The court reasoned that the language of the note gave court's decision to grant National City's motion to dismiss National City the right to collect scheduled monthly inter- SIGNIFICANCE OF THE CASE: This case provides est payments, and these demands did not deviate from the an illustration of how the court determines whether a note structure of a demand note. Specifically, the court relied on constitutes a demand instrument. Specifically, one can the note's statement that National City could demand pay- see the vigorous attention the court gives to the specific ment at any time. Further, the language of the note rein- forces National City's right to collect scheduled monthly language of a note. CRITICAL THINKING What is the ambiguity in the agreement with National City that Reger believes provides him with a proper basis for his cause of action against National City? ETHICAL DECISION MAKING Which stakeholders are affected by this decision? The law is concerned with much more than the inter- ests of the two parties in the dispute. What other parties are affected by whether Reger wins this case? 334 arhispidin every content express De duty i pod does to low the National Cry breached the Commons by CASE 17-1 FACTS: Reger Development borrowed money from interest payments and does not deviate from the discussed the possibility of calling the note, Reper Drvel City had reached its contract by demanding payment The court also addressed Reger's argument that. Na Reger's being in good economic standing, and that the had inappropriately changed the terms of the contract with Reger had met with the bank prior towing the line of quote, the court found Reger's argument to be a out Reger's full consent. As revealed in the following REGER DEVELOPMENT, LLC. NATIONAL CITY BANK UNITED STATES COURT OF APPEALS, SEVENTH CIRCUIT 592 F30 759 (2010) National City Bank, using a revolving line of credits a demand note note. the that City opment sued the bank for breach of contract and fraud. The district court granted National Clry's motion to dis- miss Reger's complaint credit to discuss the loan. Reger asked about changing the terms of the credit agreement. The bank representative Duncan, responded thar the National City documents were non-negotiable. Reger then executed the contract. The main ment on demandes in light of this controlling lower question here is whether the promissory instrumententi complaint opens ac. Reper Development's alle tles National City to demand payment from Reger at will. National Ciry moved to dismiss Reger's complaint. The and capriciously demanding payment under the line of Conde district court granted this motion, and Reger appealed. even though Reyer Development was in good conding and laterally changing and tempting to change the fundamental ISSUE: Did National City breach its contract with Reger of the Contract Documents without Reger Development's Development? Reper Development attempts to substantiate the first part of the beach claim by prsting to several provisions in the Note that believe REASONING: The first clause in the note in question reads be fundamentally inconsistent with the nature of a demands ment. These include the "INTEREST AFTER DEFAULT"provision PROMISE TO PAY Roger Development, LLC Bow which reads, in relevant part. "Tulpon default, including failure to pay promises to pay to National City Bank Lender", er der in upon final maturity, the interest rate on this Note shall be increased lawful money of the United States of America, on demand, the by adding a 2.000 percentage point margin:"the prepayment channe principal amount of Seven Hundred Fifty Thousand & 00/100 which allows the borrower to pay down allora portion of the amount Dollars (5750.000,00) or so much as may be outstanding. owed cartierunkis doc" and the close that grants National Clay together with interest on the unpaid outstanding principal bal the right to access the borrower's financial information. Reper Devel opment describes the new a financial insecurity provision that ance of each advance. Interest shall be calculated from the date conditions the night to demand payment on some economicas of each advance until repayment of each advance. We are not persuaded by the suggestion that these references PAYMENT Borrower will pay this loan in full immediately to due dates and default somehow overpower the repeated upon Lender's demand. Borrower will pay regular monthly pay- explicit contract language setting forth the lender's right to ments of all accrued unpaid Interest due as of each payment demand payment at any time. date, beginning July 25, 2007, with all subsequent Interest pay ments to be due on the same day of each month after that DECISION AND REMEDY: The court afirmed the district The court reasoned that the language of the note gave court's decision to grant National City's motion to dismiss National City the right to collect scheduled monthly inter- SIGNIFICANCE OF THE CASE: This case provides est payments, and these demands did not deviate from the an illustration of how the court determines whether a note structure of a demand note. Specifically, the court relied on constitutes a demand instrument. Specifically, one can the note's statement that National City could demand pay- see the vigorous attention the court gives to the specific ment at any time. Further, the language of the note rein- forces National City's right to collect scheduled monthly language of a note. CRITICAL THINKING What is the ambiguity in the agreement with National City that Reger believes provides him with a proper basis for his cause of action against National City? ETHICAL DECISION MAKING Which stakeholders are affected by this decision? The law is concerned with much more than the inter- ests of the two parties in the dispute. What other parties are affected by whether Reger wins this case? 334
