Park Bank v. Westburg

Defendants executed guaranty contracts in order to secure financing to run their business operations. Bank subsequently commenced foreclosure proceedings on the business. Afterwards, Bank commenced an action against Defendants seeking payment under the guaranty contracts. Defendants, in response, alleged several counterclaims and affirmative defenses. Bank filed a motion for summary judgment, arguing that Defendants' counterclaims and affirmative defenses were derivative of the corporation, and therefore Defendants lacked standing to raise them. Bank also asserted that Defendants' affirmative defenses were barred because they were subject to claim preclusion. The circuit court ultimately granted summary judgment to Bank. The court of appeals affirmed, concluding that Defendants' counterclaims and affirmative defenses were derivative and that they lacked standing to raise them in this action. The Supreme Court affirmed, holding (1) Bank was entitled to summary judgment dismissing all of Defendants' counterclaims, as each of the counterclaims was derivative; (2) Defendants' affirmative defenses did not defeat Bank's demand under the guaranties for payment; and (3) the circuit court correctly granted summary judgment to Bank because Defendants failed to raise any genuine issue of material fact showing payment was not due. View "Park Bank v. Westburg" on Justia Law