Wells Fargo Business Credit v. Hindman

Dist. Ct. erred in granting plaintiff-lender’s motion for summary judgment in action alleging that defendant breached loan subordination agreement calling for plaintiff to be paid by third-party corporation on plaintiff’s loan with corporation before corporation could pay defendant on his loan with corporation, where record showed that defendant had attempted to loan money to corporation and where corporation returned said funds to defendant, but only after said funds had appeared on corporation’s financial records. Record contained triable issue as to whether corporation had accepted any “loan” from defendant so as to constitute violation of subordination agreement when corporation returned defendant’s funds, where individual at corporation who accepted defendant’s funds lacked authority to do so. Ct. noted though that issue remained as to whether corporation actually accepted defendant’s loan through its actions, where said funds appeared on its daily collateral report that was sent to plaintiff, and where there was some evidence that, prior to returning funds to defendant, corporation used defendant’s funds to pay down line of credit and to take subsequent money advances.