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Choice Capital Corp. v. Phillips

The trial court erred in finding that defendant did not incur any expenses in raising funds to meet a loan commitment which did not close due to lack of collateral.

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Choice Capital Corporation appeals from the grant of partial summary judgment to Earl Phillips on the issue of whether Choice Capital incurred any documentation or marketing costs related to a loan commitment. The trial court found that while Phillips never acquired the collateral required by the commitment, Capital Choice never incurred any costs for preparing, marketing, and delivering the documents associated with the loan. The court therefore concluded that Phillips was entitled to a refund of the $100,000 he paid Choice Capital for those services. Because we find that the trial court erred in its sua sponte finding that Choice Capital did not incur marketing expenses and because genuine issues of material fact remain regarding whether Choice Capital incurred expenses related to “preparing, filing, marketing and delivering” documents associated with the loan commitment, we reverse the trial court’s grant of summary judgment on this issue.

The record shows that on March 8, 1996, Phillips entered into a loan commitment commitment one with Choice Capital, which would provide up to $3 million in financing for Phillips to purchase an apartment complex. Pursuant to the loan commitment, Choice Capital would receive as collateral a lien on $2 million dollars of “performing mortgage loan documents the Papers and or real estate resulting from the foreclosure of the Papers” and a second lien on the apartments Phillips was to purchase. Phillips was to pay

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