Alerus Financial v. Marcil Group

October 20, 2011 by Justia

The Marcil Group, Inc. (TMGI), Michael J. Marcil, and Arthur S. Rosenberg appeal from a judgment awarding Alerus Financial, N.A., $2,520,383.07 based on guaranties they had given Alerus for a commercial real estate loan made to KRE, LLC. In 2008, KRE received a loan from Alerus to purchase commercial real estate in Fargo. Marcil and Rosenberg are respectively the chief executive officer and president of TMGI, which holds 51 percent of KRE's stock. KRE granted Alerus a first mortgage against the property purchased with the loan proceeds. TMGI, Marcil, and Rosenberg individually executed separate documents guaranteeing KRE's debt. In 2010, KRE defaulted on the promissory note. Alerus declared the entire balance of the loan due, commenced a foreclosure action against KRE, and indicated it would not seek a deficiency judgment against KRE but would instead pursue its available remedies against the guarantors. In 2011, the district court granted Alerus's motion for summary judgment in the foreclosure action against KRE and scheduled a sheriff's sale of the property for early March 2011. KRE filed for bankruptcy shortly before the scheduled sale, and the sheriff's sale was cancelled. During this time, Alerus had also begun a separate action against TMGI, Marcil, and Rosenberg to enforce the guaranties. After Alerus moved for summary judgment, the guarantors moved to dismiss the action. The district court granted Alerus's summary judgment motion and denied the guarantors' motion to dismiss. The court concluded there were no genuine issues of material fact and held TMGI, Marcil, and Rosenberg jointly and severally liable under the terms of their guaranties. In June 2011, while this appeal was pending, Rosenberg filed for bankruptcy. Rosenberg's appeal was stayed pending discharge of his bankruptcy proceedings. Upon review, the Supreme Court concluded TMGI and Marcil did not present sufficient evidence to raise genuine issues of material fact about fraud, mistake, waiver, or estoppel. Therefore, the district court did not err in granting Alerus's motion for summary judgment. View "Alerus Financial v. Marcil Group" on Justia Law