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Scott v. Forcht Bank, NA

Court of Appeals of Kentucky

May 12, 2017

ROBERT MARK SCOTT APPELLANT
v.
FORCHT BANK, NA, SUCCESSOR IN INTEREST TO LAUREL NATIONAL BANK APPELLEE

         APPEAL FROM LAUREL CIRCUIT COURT HONORABLE THOMAS L. JENSEN, JUDGE ACTION NO. 12-CI-00962

          BRIEF FOR APPELLANT: Jason E. Williams London, Kentucky.

          BRIEF FOR APPELLEE: Wesley R. Tipton Corbin, Kentucky.

          BEFORE: CLAYTON, JONES, AND NICKELL, JUDGES.

          OPINION

          JONES, JUDGE.

         The Appellant, Robert Mark Scott ("Scott"), appeals from the March 16, 2015, order of the Laurel County Circuit Court. In that order, the circuit court granted a motion for judgment on the pleadings made by the Appellee, Forcht Bank, N.A. ("Forcht Bank"). For the reasons more fully explained below, we AFFIRM.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         In September 2008, Scott approached Forcht Bank to obtain financing for the purchase of two undeveloped lots (Lot #23 and Lot #26) located in Cedar Creek Subdivision in Laurel County, Kentucky, and for the cost of building a rental home on one of the lots. According to Scott, the purpose of purchasing Lot #23 and Lot #26 was to construct a rental property, first on Lot #26, then use the proceeds from the rental property and the rental home itself, as collateral, to obtain a second loan from Forcht Bank to build a rental property on Lot #23. According to Scott, Forcht Bank was fully aware of his plans.

         On March 5, 2013, Scott met with Chris Jasper ("Jasper"), a loan officer with Forcht Bank. Scott indicated that he approached Jasper with a written plan for the two lots. Scott maintains that before agreeing to the loan terms, he requested assurance from Forcht Bank that he would be able to build on the second lot in accordance with this plans. Scott stated that Jasper assured him that he would be able to build on Lot #23 and that Jasper provided him a form, which Scott filled out explaining why he was buying Lot #23. A copy of this form was never produced during this action. Jasper only recalled reviewing Scott's handwritten construction and post-construction plans. He did not recall Scott stating that he would not accept the loan unless Forcht Bank agreed to a second, later loan for the construction of a rental home on Lot #23.

         In September 2008, Scott's loan application was approved by Forcht Bank. In total, Forcht Bank loaned Scott $121, 952.59 for the purchase price of Lot #23 and Lot #26 (the price for each lot was $11, 500.00) and the cost of building a rental home on Lot #26. Later in 2008, Jasper was dismissed by Forcht Bank. By the fall of 2008 Mike Sharp ("Sharp") was hired by Forcht Bank as its Market President.

         In March 2009, Scott completed construction of the rental property on Lot #26, at which time he approached Forcht Bank and met with Sharp for the purpose of obtaining a loan to build another rental home on the second lot (Lot #23). Scott was denied the second loan from Forcht Bank and, according to him, Sharp asked Scott to sell the property on Lot #26 rather than renting it out as he had originally planned. Scott attempted to sell the home, but it never sold.

         In August 2009, due to depleted funds from paying the mortgage out of pocket, Scott rented the property on Lot #26 for $1, 200.00 a month. According to Scott, Sharp never informed him during their March 2009 meeting that Forcht Bank would not make the second loan. Scott indicated that had Sharp notified him of this, he would have never attempted to sell the home and would have immediately rented it. Sharp indicated the denial of the second loan could likely be attributed to a change in Forcht Bank's policy, but no documentation of this change was ever produced. Scott was never able to obtain financing from Forcht Bank or any another financial institution to build a second rental property on Lot #23.

         Subsequently, Scott filed suit against Forcht Bank for breach of contract, breach of promise, promissory estoppel, detrimental reliance, and various emotional damages. Specifically, Scott alleged that he had relied to his detriment on the alleged promise that Forcht Bank would make a second loan to him so that he could construct a rental home on Lot #23. Scott also alleged that Forcht Bank's failure to make an additional loan to him was a breach of its fiduciary duty.

         Forcht Bank filed a Motion for Judgment on the Pleadings. On March 16, 2015, the trial court granted Forcht Bank's Motion for Judgment on the ...


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