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CONTRACTS (bank, deficiency judgment, covenant of good faith and fair dealing): Harvest Homebuilders LLC v. Commonwealth Bank and Trust Company (COA 1/29/2010)

By Michael Stevens

Harvest Homebuilders LLC v. Commonwealth Bank and Trust Company
2008-CA-001897 01/29/2010 2010 WL 323186

Opinion by Judge Taylor; Chief Judge Combs and Senior Judge Henry concurred. The Court affirmed a judgment of the circuit court awarding the appellee bank a deficiency judgment against appellants. The Court held that the trial court did not err by awarding the deficiency judgment as the record clearly established that the bank did not breach the implied covenant of good faith and fair dealing. The Court distinguished the holding in Pearman v. West Point National Bank, 887 S.W.2d 366 (Ky. App. 1994), in that appellee neither entered into a contract to sell the real property during the foreclosure proceedings nor actually sold the real property to a third party. Further, its lack of consent to a sale of the property prior to foreclosure was based on appellants? insistence that the sale be conditioned upon their release from liability for any resulting deficiency.

Full post as published by Kentucky Cases on March 20, 2010 (boomark / email).