American National Bank v. Perma-Tile Roof Co.

Facts and Proceedings Below

American National Bank loaned Perma-Tile Roof Company $100,000. The loan was secured by a security agreement on all Perma-Tile personal property. The loan was further secured by personal guaranties executed by Vincent Todisco, Dr. Frank Johnson, Joseph Ogle and I. D. Foreman.

The guaranties contained clauses waiving all of the guarantors’ remedies. The last paragraph of the guaranty recites a waiver of all legal rights: “Each of Us Acknowledges That Any Legal Rights We Might Otherwise Have Had Have Been Waived Under This Guaranty. Each of Us Has Read This Guaranty and Warrants That Such Waivers and Their Implications Are Understood.”

Perma-Tile defaulted on the loan. American National filed a complaint alleging that the defendants owed principal of $100,000 and accrued interest of $11,981.94.

The complaint further alleged that the value of equipment described in the security agreements was $400,000. In their answer, defendants raised the affirmative defense that the bank was not entitled to a deficiency judgment because it had collateral valued at $400,000. The bank successfully secured the collateral by writ of possession and then sold…