Plantation Key Developers, Inc. v. Colonial Mortgage Company Of Indiana, Inc.

589 F.2d 164 (5th Cir. 1979)

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Nature of the Case

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Facts

Plantation (P) developed condominiums. P contracted with Colonial (D) to provide permanent financing for P's condominium sales. D agreed to provide financing over two years in three phases. The first phase was for one year at a fixed rate. The second and third phases were for six-month periods at the same rate, unless market conditions justified a change in the rate. P paid a nonrefundable commitment fee of $60,000 for the first phase and had the option to extend financing for six month periods by paying $30,000 for each extension in phase two and three. When the first phase expired, D raised its interest rate. P objected to the increase in the rates and refused to pay the additional $30,000. P sued for breach of contract and fraud; the increased rates were not justified by market conditions. D claimed that it did not breach the contract because the payment of the $30,000 was a condition precedent to its performance. The trial court found for P on the contract claim and for D on the fraud claim. Both parties appealed.