Is a Lender Required to Give a Loan Extension Before Filing a Lawsuit?

Full question:

We have been served by a bank for an outstanding debt, and after initail suit and response, they,(bank) plaintiff has filed a motion for summary judgement. in that the bank rep. told us our properties were more than sufficient for collateral to extend this loan, we were later surprised by this suit. bank has filed an affidavit of this bank rep saying in 2 of his points that 1. the properties were insufficient (properties submitted exceeded loan amt.) 2. he notified us verbally that the properties didn't qualify. He never did this, the first we heard from bank was lawsuit at out door. so my question. this shouldn't have ever gone to court as we did everything they asked and were told not to worry the properties would qualify and the loan would be extended. What is the best way to answer this motion for summary judgement. We do owe the money, but we think the only fair thing is to collateralize the properties and extend it. They want fees on top of note now. We can attach the tax forms with market values that we submitted to an affidavit....we could motion to strike this bank rep's affidavit, and include our tax notices to prove he has lied in his affidavit. also, he lied again saying he told us they didn't qualify. Obviously he could not have told us that in the face of the tax notices showing the total exceeding our debt. This is a large bank corp. My husband says they just wanted to try to tie up all of our properties with a judgement and jack the interest rates. Should we do our own motion for summary judgement as defendant or respond to theirs, and keep in mind the idea I have to strike our local bank reps. Perjured affidavit. Where/ how would that fit in? We know we own the debt. Just want to go back to where we were before lawsuit and allow us to collateralize and extend it.....we have perfect credit and do not think it is in any way fair or right to have a judgement like this on our record. Can we force the bank to drop it and work with us, or can we persuade the judge to order such? Thanks, hope this wasn't too confusing.

• Category: Civil Actions
• Subcategory: Summons
• Date: 04/07/2025
• State: Utah

Answer:

It is important to file a proper response and/or motion after receiving a summons to avoid having a default judgment entered on your records. A "default judgment" may be rendered against a party if it is the result of a party's failure to take a necessary step in the action within the proper time; this generally means a failure to plead or otherwise defend within the time allowed. Since, under rules of procedure, allegations not specifically denied are deemed admitted, failure to file a responsive pleading will generally result in the entry of a default judgment against the defendant. When a complaint is filed and the defendant fails to file an answer within the applicable time period, a default judgment may be entered against the defendant.

An answer is a legally sufficient response to the allegations that have been alleged against you in the complaint. The answer will generally either admit or deny each claim made by paragraph, or state an inability to admit or deny for lack of knowledge. Defenses may also be raised. A counterclaim or cross claim may also be asserted.

Summary judgment is properly granted when the evidence in support of the moving party establishes that there is no genuine issue of material fact to be tried. A material fact is one which tends to prove or disprove an element of the claim. In defending against a motion for summary judgment, the opposing party needs to show that there is a disputed issue. For further discussion, please see;

http://www.foreclosurefish.com/blog/index.php/?id=658
http://www.utcourts.gov/resources/rules/urcp/urcp056.html

Unfortunately, lenders don't always act with integrity and are not required to grant an extension of a loan. Perjury may be subject to criminal charges and false statements in a pleading may be countered in a defensive pleading which states why the other party's statements are false. Evidence of falsity may also be proven by way of affidavits or other exhibits attached to the pleading. You may want to review the following general information regarding contract law and breach of contract actions:

Contracts are agreements that are legally enforceable. A contract is an agreement between two parties that creates an obligation to do or refrain from doing a particular thing. The purpose of a contract is to establish the terms of the agreement by which the parties have fixed their rights and duties. An oral contract is an agreement made with spoken words and either no writing or only partially written. An oral contract may generally be enforced the same as a written agreement. However, it is much more difficult with an oral contract to prove its existence or the terms. Oral contracts also usually have a shorter time period within which a person seeking to enforce their contract right must sue. A written contract generally provides a longer time to sue than for breach of an oral contract. Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law generally refers to the terms of the agreement between the parties, as parties have freedom to override many state law requirements regarding formalities of contracts. Each state has developed its own common law of contracts, which consists of a body of jurisprudence developed over time by trial and appellate courts on a case-by-case basis.

An unjustifiable failure to perform all or some part of a contractual duty is a breach of contract. A legal action for breach of contract arises when at least one party's performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party. The five basic remedies for breach of contract include the following: money damages, restitution, rescission, reformation, and specific performance. A money damage award includes a sum of money that is given as compensation for financial losses caused by a breach of contract. Parties injured by a breach are entitled to the benefit of the bargain they entered, or the net gain that would have accrued but for the breach. The type of breach governs the extent of damages that may be recovered.

Restitution is a remedy designed to restore the injured party to the position occupied prior to the formation of the contract. Parties seeking restitution may not request to be compensated for lost profits or other earnings caused by a breach. Instead, restitution aims at returning to the plaintiff any money or property given to the defendant under the contract. Plaintiffs typically seek restitution when contracts they have entered are voided by courts due to a defendant's incompetence or incapacity.

Rescission is the name for the remedy that terminates the contractual duties of both parties, while reformation is the name for the remedy that allows courts to change the substance of a contract to correct inequities that were suffered. In order to have a rescission, both parties to the contract must be placed in the position they occupied before the contract was made. Courts have held that a party may rescind a contract for fraud, incapacity, duress, undue influence, material breach in performance of a promise, or mistake, among other grounds.

Specific performance is an equitable remedy that compels one party to perform, as nearly as practicable, his or her duties specified by the contract. Specific performance is available only when money damages are inadequate to compensate the plaintiff for the breach.

Promissory estoppel is a term used in contract law that applies where, although there may not otherwise be an enforceable contract, because one party has relied on the promise of the other, it would be unfair not to enforce the agreement. Promissory estoppel arises from a promise which the promisor should reasonably expect to induce action or forebearance of a definite and substantial character on the part of the promisee and which does induce such action or forebearance in binding if injustice can be avoided only by enforcement of the promise. Detrimental reliance is a term commonly used to force another to perform their obligations under a contract, using the theory of promissory estoppel. Promissory estoppel may apply when a promise was made; reliance on the promise was reasonable or foreseeable; there was actual and reasonable reliance on the promise; the reliance was detrimental; and injustice can only be prevented by enforcing the promise. Detrimental reliance must be shown to involve reliance that is reasonable, which is a determination made on an individual case-by-case basis, taking all factors into consideration. Detrimental means that some type of harm is suffered.

Reasonable reliance is usually referred to as a theory of recovery in contract law. It was what a prudent person might believe and act upon based on something told by another. Sometimes a person acts in reliance on the promise of a profit or other benefit, only to learn that the statements or promises were either incorrect or were exaggerated. The one who acted to their detriment in reasonable reliance may recover damages for the costs of his/her actions or demand performance. Reasonable reliance connotes the use of the standard of an ordinary and average person.