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TD Banknorth, N.A. v. Lion Gate at Sparta, L.P.

Superior Court of New Jersey, Appellate Division

October 7, 2013

TD BANKNORTH, N.A., n/k/a TD BANK, N.A., Plaintiff-Respondent,
v.
LION GATE AT SPARTA, L.P., THE ESTATE OF FRANK M. LEO, SR., and GREGORY G. LEO, SR., Defendants-Appellants.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 11, 2013.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-11123-10.

Theodore J. Leo argued the cause for appellants (Law Offices of Theodore J. Leo, attorneys; Mr. Leo and Christopher Leo, on the brief).

Jonathan M. Ettman argued the cause for respondents (Poff & Weber LLC, attorneys; Mr. Ettman, on the brief).

Before Judges Graves, Espinosa, and Guadagno.

OPINION

GRAVES, J.A.D.

This case arises from a construction mortgage loan made by Interchange Bank (Interchange) to defendant Lion Gate at Sparta, L.P. (Lion Gate). The loan was acquired by plaintiff TD Banknorth, N.A., (TD Bank) after its 2007 merger with Interchange. The loan was guaranteed by the estate of Frank M. Leo, Sr., [1] and Gregory G. Leo, Sr. Defendants appeal from a November 4, 2011 summary judgment order in favor of TD Bank for $1, 147, 424.38, the balance due on the promissory note and guaranty agreements. Because the terms of the original and subsequent loan documents are clear and unambiguous, we affirm.

Frank and Gregory were general partners of Lion Gate. On April 20, 2004, Interchange entered into a construction mortgage loan agreement with Lion Gate. Pursuant to the loan agreement, Interchange agreed to lend the sum of $2, 165, 000 to Lion Gate for the purchase of land located in Sparta, New Jersey (the property) and "the construction of eighteen single-family houses and related site work." The initial promissory note, which was also dated April 20, 2004, required Lion Gate to repay the loan by making interest-only payments commencing May 1, 2004 until November 1, 2005, at which time a final balloon payment of all principal and accrued interest on the note was due.

On the same day, Lion Gate executed and delivered to Interchange a mortgage on the property to secure the loan. The mortgage was recorded with the Sussex County Clerk on June 18, 2004.

In addition to the promissory note and mortgage, Frank and Gregory both executed and delivered to Interchange separate written guaranty agreements dated April 20, 2004. The guaranty agreements stated: "Guarantor guarantees, absolutely and unconditionally, to Interchange Bank (the "Bank"), the payment of the Note on the terms and conditions set forth in this Guaranty." The guaranty agreements also provided as follows:

6. Guarantor's liability shall be unaffected by: (i) any amendment or modification of the provisions of the Mortgage, or Note, or any other instrument made to or with Bank by the Borrower; (ii) the extensions of time for performance required; or (iii) the release of Borrower from performance or observance of any agreements, covenants, terms or conditions contained in any of said instrument by operation of law, whether made with or without notice to Guarantor. . . .
. . . .
8. Guarantor agrees that in the event of the failure of Borrower to perform or abide by, in any material respect, the terms of any document made to or with Bank by the Borrower, beyond applicable grave and/or cure periods, the Bank shall be ...

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