United States Court of Appeals, Fourth Circuit
United States Court of Appeals, Fourth Circuit
2d 1008
Appeals from the United States District Court for the District of
Maryland, at Baltimore. John R. Hargrove, District Judge; Daniel E.
Klein, Jr., Magistrate Judge. (CA-90-75-HAR)
Argued: Griffin Vann Canada, Jr., Miles & Stockbridge, Rockville,
Maryland, for Appellants.
Paul M. Vettori, Kenny, Vettori & Robinson, Baltimore, Maryland, for
Appellee.
On Brief: J. Stephen McAuliffe, III, Miles & Stockbridge, Rockville,
Maryland, for Appellants.
Price O. Gielen, Cynthia L. Lippert, Neuberger, Quinn, Gielen, Rubin &
Gibber, P.A., Baltimore, Maryland, for Appellee.
D.Md.
AFFIRMED.
Before PHILLIPS and WILLIAMS, Circuit Judges, and BUTZNER,
Senior Circuit Judge.
OPINION
PER CURIAM:
Colton and Laskin are the sole shareholders of Campus. In June 1988, Campus
and Carley Capital Group (CCG) executed a partnership agreement (the
agreement), with Campus as general partner and CCG as Class A limited
partner. This limited partnership was named D3J. Simultaneously, D3J
executed a promissory note for $369,582 to CCG. Colton and Laskin
personally guaranteed the note "unconditionally ... to [CCG] and its successors
and assigns." J.A. 72.
4The absence in [the] note of provisions comparable to those contained in this Article
J.A. 94.
CCG owed Chemical over $70 million, and needed another influx of capital. As
part of a work-out agreement, Chemical accepted an assignment of the note to
secure a mortgage to CCG in the amount of $301,111. Chemical required
Laskin and Colton to submit financial statements to support their financial
responsibility as guarantors of the note. Despite these inquiries, Laskin and
Colton never informed Chemical of the cross-reference to the note in the D3J
partnership agreement. Neither they nor any of their interlocking businesses
made any payments on the note.
Chemical brought this federal diversity action to collect on the note. The
district court denied Chemical's motion for summary judgment, ruling that the
floating interest rate provided in the note was not a sum certain under the
Maryland law effective when the note was made. Comm. Law, Anno. Code of
Maryland 3-104, -106 (1975). Although the Maryland legislature had, since
the making of the note, brought "variable-plus" interest rates under the
definition of "sum certain," id. 3-106 (1990), the court declined to apply the
amendment retroactively.1 Consequently, the court held that Chemical was not
a holder in due course and defendants-appellants (collectively, "D3J") were
entitled to raise personal defenses as to which there were genuine issues of
material fact making summary judgment inappropriate. J.A. 31-32.
We have studied the briefs and heard oral argument and have concluded that
the Magistrate Judge did not err in rejecting the appellants' proffered defenses
on the note, and in giving judgment upon it to Chemical Bank. Accordingly, we
affirm on the reasoning of the Magistrate Judge. Chemical Bank v. D3J
Associates Limited Partnership, et al., No. HAR-90-75 (D.Md. April 28, 1992)
(memorandum opinion).2
AFFIRMED
As an alternative basis for affirming the judgment in its favor, Chemical Bank
has contended by a "cross-appeal" (not actually required) that the district court
should have given it summary judgment as a holder in due course, not subject
to the appellants' personal defenses. Joining issue on this contention, appellants
argue that to hold so would require giving retroactive effect to the Maryland
statutes which sought to make variable rate interest provisions in notes not
destructive of their negotiability, see note 1, supra, and that to do so would run
afoul of the Impairment of Contract Clause of the federal constitution. In view
of our affirmance on other grounds, we decline to address that constitutional
issue. See Alexander v. Louisiana, 405 U.S. 625, 633 (1972)