CONTRACTS - KANSAS

Farmers Bank & Trust v. Homestead Community Development

Court of Appeals of Kansas - October 2, 2020 - P.3d - 2020 WL 5849345

In 2007, Farmers Bank lent $600,000 to Homestead Community Development, Inc. to remodel a property called the Bartell House in downtown Junction City. Terry Heldstab, who was Mayor at the time, signed a letter of guaranty to Farmers.

When Homestead failed to pay the loan, Farmers sued Homestead on its note and foreclosed its mortgage. The court granted Farmers judgment when Homestead failed to pay the loan. Farmers then turned to the City and sought to enforce the guaranty. But the City maintained that the guaranty was void and unenforceable.

The District Court ruled in favor of City and City appealed.

The Court of Appeals upheld the ruling, finding that:

 



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