Brady v. Park

In this contract dispute stemming from a seller-financed real estate transaction, the Supreme Court affirmed in part and reversed in part the judgment of the district court, holding primarily that the district court was not precluded by the mandate rule from determining that the promissory note did not require the buyers to pay any incurred late fee amounts to bring note current because the court construed an ambiguity in the note against the defendants, as drafters, without first considering extrinsic evidence.The buyers purchased the real estate with a promissory note that required them to make an installment payment each month and a final balloon payment. The note applied a ten percent base interest rate on the unpaid principal and established consequences if the buyers missed an installment payment, including a late fee and bump up in the base interest rate until the note was brought current. The buyers made the installment payments but disagreed over the amount owing the final balloon payment, leading to litigation. The Supreme Court remanded the case for a new determination after the court considers relevant extrinsic evidence and held that the district court did not clearly err in determining that extrinsic evidence showed that the parties did not intent the note's late fee to apply to the final payment. View "Brady v. Park" on Justia Law