MNB Prevails Against Terminella

Bankers are no doubt breathing a sigh of relief after Metropolitan National Bank prevailed in its foreclosure proceeding against Tom Terminalla.

Despite all the bickering back-and-forth of he said, she said between the parties over more than two years, Washington County Circuit Court Judge Kim Smith’s ruling was breathtakingly simple.

As a legal expert we quoted in advance of the trial predicted, the case would swing on Smith’s interpretation of the loan’s demand note language.

Smith determined that the loan language as a demand note gave MNB the right to call the note at any time, regardless of an event of default by Terminella (Smith determined Terminella’s default happened from January to March of 2007 when Terminella stopped making interest payments as the dispute escalated).

MNB CEO Lunsford Bridges lauded the decision as a vindication, while Terminella attorney Robert Ginnaven vowed to appeal and called Smith’s ruling a “gross miscarriage of justice.” Ginnaven cited Smith’s decision for a bench trial instead of jury trial as a precursor of his eventual ruling.

For our part, the most damage to Terminella’s case happened during some of his most compelling evidence.

At trial, Terminella said permitting delays slowed the $9.63 million subdivision project in Springdale and was backed up by a city engineer and his contractor.

However, in his counterclaim filed back in 2007, Terminella stated that he deliberately slowed the project to avoid bringing too much inventory to market as sales declined.

The open contradiction was brought home effectively by MNB attorney Phil Kaplan, who elicited this response from Terminella while waving the counterclaim: “I didn’t write that.”

“But you’re suing us based on this document,” Kaplan said.

It was a devastating exchange, and Smith noted in his ruling that he did not accept Terminella’s account of those October 2006 events.