River East Plaza, L.L.C. v. Variable Annuity Life Insurance

KANNE, Circuit Judge.

This diversity case involves a loan used to finance a significant commercial real estate development. When the borrower sold the property and pre-paid the loan, it balked at paying a “prepayment fee” according to the terms of the note. The borrower eventually paid the fee, subject to a reservation of rights, and sued the lender. After a bench trial, the district court entered judgment in favor of the borrower and the lender now appeals. For the reasons set forth below, we reverse the judgment of the district court and remand the case for further proceedings.

I. History

River…