Bank of America, N.A. v. Jill P. Mitchell Living Trust
822 F. Supp. 2d 505
D. Maryland2011Background
- Bank of America, N.A. sues Jill P. Mitchell Living Trust U/A 1999, Ms. Mitchell, and Mr. Mitchell on a loan; Bank is successor by merger to Merrill Lynch Bank USA.
- Trust and Ms. Mitchell signed a Merrill Lynch Loan Management Account Agreement in 2006, with Mr. Mitchell also guaranteed the loan; agreement named Mr. Mitchell as co-Trustee.
- The loan had a $3,000,000 maximum in 2006, later amended to $6,000,000 in 2008; Trust pledged securities as collateral; admission of a Breakage Fee for prepayment is disputed.
- Trust prepaid in 2010; Bank claimed $2,225,222.95 due, including an alleged Breakage Fee and other charges; Bank liquidated collateral to satisfy charges.
- Counterclaims by Trust and Ms. Mitchell included MCPA, fraud, and breach of contract; Bank moved to strike jury demand and for summary judgment on counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Breakage Fee is a cost incurred by the Bank | Bank asserts Breakage Fee is a cost incurred by it. | Counter-Plaintiffs contend Breakage Fee is future loss, not a cost incurred. | Ambiguous term; issue for trial on contract interpretation |
| What law governs the contractual dispute | Utah law applies per choice-of-law clause. | Maryland/other law arguments not favored; choice upheld as Utah law governs contract. | Utah law applied to the contract interpretation |
| Whether Counter-Plaintiffs are entitled to summary judgment on breach of contract | Counterclaim should fail due to ambiguity and as defense to Bank's breach. | Counter-Plaintiffs claim breach and seek reversal of Breakage Fee calculation. | Bank's motion granted; Counter-Plaintiffs' breach of contract claim defeated as to the Bank's counterclaim |
| Whether MCPA misrepresentation or omission claims survive | Bank argues no reliance or material omission; some claims fail as a matter of law. | Counter-Plaintiffs contend reliance and material omission facts exist. | Bank's summary judgment granted for Ms. Mitchell on misrepresentation; partial denial for Trust; material omission claim for Trust remains fact-dependent |
| Whether jury trial waiver is enforceable | Utah law governs jury waiver; waiver valid. | Federal law governs jury waiver in diversity; waiver invalid if not knowing/voluntary. | Jury demand struck; waiver found knowing and voluntary under federal law |
Key Cases Cited
- Wells v. Liddy, 186 F.3d 505 (4th Cir. 1999) (forum-choice rules; choice-of-law context in diversity cases)
- Leasing Serv. Corp. v. Crane, 804 F.2d 828 (4th Cir. 1986) (knowing and voluntary jury-waiver standard)
- Nails v. S & R, Inc., 639 A.2d 660 (Md. 1994) (standard of reliance for fraud under MCPA; substantial inducement)
- WebBank v. American General Annuity Serv. Corp., 54 P.3d 1139 (Utah Ct. App. 2002) (contract ambiguity and extrinsic evidence in Utah)
- Johnston v. Austin, 748 P.2d 1084 (Utah 1988) (acceleration provisions and unconscionability context)
- Glenn v. Reese, 2009 UT 80 (Utah) (contract interpretation and ambiguity in Utah law)