Bank of America, N.A. v. Ebro Foods, Inc.
948 N.E.2d 685
Ill. App. Ct.2011Background
- Ebro Foods, Inc. obtained a revolving loan from LaSalle Bank for up to $250,000, later increased to $600,000, with forbearance that expired in 2008.
- Guaranties were executed by Duffy, Reyes, RSD Holdings, LLC, and Abreu, each guaranteeing Ebro's indebtedness; forbearances/amendments extended terms.
- Default occurred; LaSalle Bank sent a default notice in Feb 2008 and accelerated the debt in Feb 2009; Bank of America filed suit March 18, 2009, later dismissing Ebro due to bankruptcy.
- Motions to dismiss were filed by RSD, Duffy, Abreu, and Reyes arguing lack of standing and misapplication of the guaranties; Bank of America sought to strike defenses.
- Duffy sought to supplement the record asserting Illinois Act 13.70 certificate of authority issues for foreign corporations; trial court dismissed the complaint as to Duffy and Abreu in Dec. 2009.
- Bank of America challenged the dismissal, arguing federal preemption and that it was a national bank; the trial court denied reconsideration; Bank appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether national banks are exempt from § 13.70 certificate requirement | Bank argues National Bank Act preempts § 13.70. | Duffy/Abreu contend § 13.70 applies to foreign corporations; BANA Holding revoked, need a certificate. | De novo review; preemption applies; but record shows issues with proving lack of interstate activity; reversal warranted. |
| Whether Bank had standing as successor by merger to LaSalle Bank | Bank pled standing as successor to LaSalle Bank. | Defs argued no proper predicate showing authority to sue as successor. | Bank had standing; dismissal of its claim was error; remand. |
Key Cases Cited
- Subway Restaurants, Inc. v. Riggs, 297 Ill.App.3d 284 (1998) (exceptions to certificate of authority for interstate/occasional transactions)
- Textile Fabrics Corp. v. Roundtree, 39 Ill.2d 122 (1968) (interstate commerce principle when regulating foreign corporations)
- Mass Transfer Inc. v. Vincent Construction Co., 223 Ill.App.3d 746 (1992) (burden to prove lack of interstate activity in § 2-619 motion)
- Caywood v. Gossett, 382 Ill.App.3d 124 (2008) (waiver on appeal for arguments raised first in motion for reconsideration)
- Central Illinois Light Co. v. Home Insurance Co., 213 Ill.2d 141 (2004) (standard of review and preservation of appellate issues)
- People v. Normand, 215 Ill.2d 539 (2005) (practice of preserving issues and uniform precedent)