Sahadi v. Continental Illinois National Bank And Trust Company Of Chicago

706 F.2d 193 (1983)

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Nature of the Case

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Facts

GLE, an international shipping line, began its relationship with D in 1976 with a $3 million loan, personally guaranteed by P. D increased its loan commitment to $11 million in 1977. This commitment was repudiated by D. Negotiations ensued, and D primarily sought to obtain release from P and GLE of their claims stemming from D's purported breach of its loan commitment and to obtain further collateral from P to secure their guarantee of the outstanding loan. D also sought to have GLE's outstanding interest payments brought up to date. Two agreements were executed. One ran between P and D, completely releasing D from any claims stemming from its failure to fulfill the loan commitment; it also collateralized P's guarantee of D's outstanding loan to GLE. The other agreement, cross-referenced to the first and running between GLE and D, provided for the payment of interest and for D's forbearance from demanding payment of the entire outstanding loan and accrued interest. As part of the second agreement, D had the right to demand payment in full if GLE failed to make payment of interest accrued on the Liabilities through September 30, 1977, on or before November 15, 1977. Underlying these agreements, D clearly wanted to call in the loan if the interest payments were late. GLE was late and D notified that the loan was called. GLE immediately offered to tender payment for the due interest from the company's account with D, but D refused. The calling of the loan destroyed GLE and subjected P to liability on the personal guarantee. P filed suit against D, seeking release from their personal guarantee agreement and damages for the destruction of GLE. The district court gave D a partial summary judgment and rejected P's waiver argument, but did not directly address their 'material' breach or 'good faith' contentions, either of which, P argued, required a trial to assess the confliction evidence. P appealed.