ST. LOUIS — An appeals court has sided with a bank in its collection action against customers who failed to pay on a promissory note that had been secured with a commercial building in St. Louis.
In a ruling handed down May 9, the Missouri Court of Appeals Eastern District upheld a decision by St. Louis County Circuit Judge Kristine Kerr, who ordered defendants GB Investments and Gil Bashani to pay Frontenac Bank $188,319.96 in damages and attorneys' fees. The defendants allegedly failed to pay back principal and interest of $437,653.90 when a note that originated in March 2004 came due in January 2014.
Frontenac Bank's court action against the defendants preceded its merger with Royal Banks of Missouri in 2015.
According to background information in the ruling, GB Investments executed the original promissory note in March 2004 for $433,500 and secured it with a commercial building at 9974 Old Olive Street Road in St. Louis. In April 2010 Bashani, as managing member of GB Investments, personally guaranteed obligations of the promissory note.
After the defendants failed to pay on the note, the bank foreclosed on the property, and Frontenac Bank's subsidiary, FB-Realty, purchased it at a foreclosure sale of $325,000.
Kerr rejected the defendants' request for a jury trial due to language in the loan documents and held a bench trial in February 2016 on the question of the bank's damages and attorneys' fees in pursuing legal action.
She determined the bank incurred $116,894.18 in damages, which was the amount of principal, accrued interest and accrued charges under terms of the note after applying credits such as the $325,000 foreclosure sale price and $71,425.78 in attorneys' fees.
The appeals court panel, comprised of presiding Judge Robert Clayton III and Judges Mary Hoff and Lisa Page, also granted the bank's motion for attorneys' fees on appeal in the amount of $20,000.