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Contracts Keyed to Calamari
Federal Deposit Insurance Corp. v. Registry Hotel Corp.
Facts
The Plaintiff, the Federal Deposit Insurance Corp. (the "Plaintiff"), acting as the receiver of a Kansas bank, brings suit to recover loans of $102,217.92, extended by the aforementioned Kansas bank to Frownfelter Construction Company ("FCC"). On February 24, 1982, FCC and the Defendant, Registry Hotel Corp. (the "Defendant"), entered into a $170,000 construction contract. The Kansas bank was given a security interest in the construction contract between the Defendant and the FCC. The owner of FCC, Stanley Frownfelter ("Mr. Frownfelter"), signed the security agreement. On April 16, 1982, the Defendant accepted the assignment to the Kansas bank, and agreed to name the bank as co-payee on any disbursements on the contract. Before November 1982, the Defendant terminated the contract because FCC did not obtain the necessary bonds. In December 1982, the Defendant contracted with one of FCC's former subcontractors, Uni-Lock Pavestone ("Pavestone") to do the job. In January of 1993, Pavestone subcontracted with another of Mr. Frownfelter's companies, Pave-Lock Systems to provide certain services. There is no indication Pavestone knew about Mr. Frownfelter's original contract with FCC. FCC defaulted on the loans with the Kansas bank, and the Plaintiff sued the Defendant for $102,217.92. The court denied the Defendants motion for summary judgment.
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