Blitz, Bardgett & Deutsch litigation attorneys represented Thomas Hughes, a St. Louis homebuilder and real estate developer, and his wife, Carolyn, in a suit brought by Frontenac Bank seeking approximately $3.6 million for the alleged breach of promissory notes and related commercial guaranties. At trial, the court ruled in favor of BB&D and found the personal guaranties signed by Carolyn Hughes invalid and unenforceable on the basis that they violated the Equal Credit Opportunity Act.
ECOA is a federal law that prohibits banks from requiring a spouse to sign a personal guaranty under certain circumstances. On appeal, the Missouri Court of Appeals, Eastern District, affirmed the trial court’s decision in her favor.
Although the trial court granted summary judgment in favor of Frontenac and against Thomas Hughes and the borrowing entities, the Court of Appeals reversed the trial court’s grant of summary judgment in favor of Frontenac, holding that certain factual issues exist for trial regarding the borrower’s and Thomas Hughes’ affirmative defenses. For further information, see Stltoday.com
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