Bank of America v. Friedman Furs & Fashion
Justice David Schmidt
Bank of America began an action against Friedman Furs & Fashion seeking to recover money allegedly due under a line of credit and a credit card agreement. Defendants executed the subject note and agreement in favor of the bank in the amount of $1 million. They also executed a security agreement granting the bank a lien on certain of their assets and the line of credit was subject to renewal on an annual basis. The bank's underwriters did not approve renewal of the line notes, citing deteriorating revenues, global cash flow and the businesses' risk rating. The court found the bank established its prima facie entitlement to judgment as a matter of law by submitting proof of the note and guaranty, and of defendants' failure to make the payments provided for by their terms. It then held that defendants' claim of estoppel must be dismissed as they failed to establish the manner in which they detrimentally relied on any alleged promise made by the bank. The court granted the bank's motion to the extent of dismissing the affirmative defense of estoppel, as it was premised on the bank's refusal to convert the line note into a demand loan, the refusal of the bank to extend the line of credit, negligent misrepresentation, and estoppel.