McDonald v. Zions First National Bank, N.A.
2015 Colo. App. LEXIS 350
Colo. Ct. App.2015Background
- In 2007 McDonald (plaintiff) took a construction loan from Zions First National Bank (defendant) and signed a loan package including a construction loan agreement, TIPS, and Residential Disbursement Procedures (RDP).
- McDonald submitted multiple draw applications; Zions paid some draws but rejected others for noncompliance. McDonald alleges Zions’ refusals forced him to pay vendors and ultimately caused his loan default and foreclosure.
- Zions moved for summary judgment after discovery, submitting an affidavit from a bank VP and copies of McDonald’s draw requests; McDonald filed an unverified response and did not supply the exhibits he referenced or any opposing affidavit.
- The trial court granted partial summary judgment dismissing McDonald’s breach of contract and breach of implied covenant claims, but left defendant’s counterclaims (later dismissed without prejudice) for trial; the court awarded Zions attorney fees and entered judgment.
- McDonald attempted to remove the case to federal court during enforcement proceedings; the state court found the removal was without color and retained jurisdiction, certified the partial summary judgment under C.R.C.P. 54(b), and McDonald appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state court lost jurisdiction when McDonald filed notice of removal to federal court | McDonald attempted removal, arguing federal jurisdiction | Zions argued McDonald (as plaintiff) cannot remove and the removal was frivolous | Removal by plaintiff was without color; state court retained jurisdiction and certification was valid |
| Whether partial summary judgment on breach of contract was proper | McDonald argued facts were misconstrued and draws were wrongfully withheld | Zions showed it complied with Agreement, paid compliant draws, and rejected unsigned/undocumented draws; McDonald provided no affidavit to create a fact issue | Summary judgment for Zions on breach of contract affirmed — McDonald failed to meet burden to controvert affidavit evidence |
| Whether summary judgment on breach of implied covenant of good faith and fair dealing was proper | McDonald alleged Zions amended Cost Breakdown in bad faith and failed to notify him, causing improper draw denials | Zions argued its discretionary changes were permitted by contract and draw denials were for lack of required documentation, not Cost Breakdown changes | Summary judgment for Zions affirmed; implied-duty claim failed because McDonald produced no admissible evidence to create a triable issue |
| Whether the trial court abused discretion by denying McDonald’s C.R.C.P. 59 motions for new trial | McDonald submitted a post-judgment affidavit and sought reconsideration | Zions argued the affidavit was untimely and not newly discovered; trial court should deny | Denial affirmed — affidavit not timely or shown to be newly discovered and did not alter summary judgment analysis |
Key Cases Cited
- Loctite Corp. v. Dist. Court, 718 P.2d 252 (Colo. 1986) (removal divests state court of jurisdiction while pending)
- Metro. Cas. Ins. Co. v. Stevens, 312 U.S. 563 (U.S. 1941) (state-court proceedings are valid if suit was not in fact removable)
- Amoco Oil Co. v. Ervin, 908 P.2d 498 (Colo. 1995) (limits on implied covenant of good faith and fair dealing)
- W. Distrib. Co. v. Diodosio, 841 P.2d 1053 (Colo. 1992) (elements of breach of contract, including substantial performance)
- McCormick v. Union Pac. Res. Co., 14 P.3d 346 (Colo. 2000) (burden-shifting on summary judgment)