Contracts – Damages Proximately Caused 

Posted: 1:00 am Mon, December 14, 2009
By admin
Tags: Contracts

Where a bank and a refinancer dispute the authenticity of a collateral transfer agreement whereby the bank was to transfer a borrower’s collateral to the refinancer in exchange for payment of the borrower’s debt to the bank; the borrower defaulted on the refinancer’s note on May 6, 2003; and there is no evidence that the refinancer made any effort to liquidate the collateral before Sept. 5, 2003; the court concludes that the authenticity of the collateral transfer agreement is a matter for the jury, but assuming that the agreement is valid, any loss suffered by the refinancer prior to Sept. 5, 2003 was not proximately caused by the bank’s alleged breach of the agreement.

With respect to the refinancer’s breach of contract, fraudulent misrepresentation and conversion claims, the refinancer failed to present evidence that it would have obtained a higher sale price for real property if the bank had delivered a quit claim deed earlier, and thus the refinancer’s damage claim is limited to the amounts by which the first mortgage and property taxes increased from the time the refinancer began taking steps to liquidate collateral to the date when the bank delivered the collateral documents.