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Gettis v. Green Mountain Economic Development Corp.10/28/2005
ing permit for construction and operation of the delicatessen on January 10, 1997.
8. At the time of the loans, it was expected that the loan proceeds would cover necessary equipment and facilities renovations. Patricia Gettis had already expended over $15,000 on renovations by the time the loans closed, so that the sum was immediately reimbursed. By late January 1997, plaintiffs recognized, however, that the renovations would cost much more than expected because of regulatory requirements imposed by the Vermont Department of Labor and Industries, and that the loan funds would not cover both the renovations and equipment. They determined that they would need an additional $20,000 to purchase equipment. They contacted their GMEDC loan administrator, Margo Watson, who advised them to complete the renovations and to purchase the necessary equipment with personal credit cards. She assured them that funds for an additional consolidated loan at a lower interest rate would soon be available to replace the credit card debt. Using their credit cards, plaintiffs bought over $20,000 worth of business equipment, which was ultimately subject to the lenders' security interests.
9. On February 27, 1997, plaintiffs opened "A La Carte," their new delicatessen. In March 1997, plaintiffs met with the loan administrator, Margo Watson, and the SBA advisor to discuss the consolidation loan they desired. They presented the loan administrator with documentation of business equipment purchases they had made on their credit cards. She informed them at that meeting that funds for the consolidation loan they sought would not be available for another six months.
10. In September 1997, and again in early October, Ms. Gettis was hospitalized with an unprecedented flare-up of her inflammatory arthritis. Her doctor associated the flare-ups with stress and overwork, which, according to Ms. Gettis, was caused by the business's financial difficulties. Ms. Gettis continued to work despite her doctor's pleas to stop. She continued to suffer from aggravated arthritis throughout the period A La Carte was in business. On October 3, 1997, while Ms. Gettis was hospitalized, Mr. Gettis met with the loan administrator and the SBA business development advisor, who informed him that no additional loan funds would be available to replace plaintiffs' credit card debt.
11. A year later, in early October 1998, the lenders agreed to allow plaintiffs to make interest-only payments from December through March, spreading the principal due during those months over the remainder of the year. On October 9, the loan administrator sent plaintiffs a letter asking them to make payments on their loans immediately, as no payment had been received since August 1998. She also requested that plaintiffs return signed letters acknowledging their agreement with the proposed modified payment plan. On November 3, the executive director of GMEDC sent another letter to plaintiffs, warning them that GMEDC still had not received payment. He informed them that the modified payment plan was conditioned upon plaintiffs bringing their loans current. No payments were made.
12. On December 1, 1998 the GMEDC executive director sent letters declaring plaintiffs in default on their loans from CRV and the Town and demanding payment in full within fifteen days. A La Carte closed its doors permanently at the end of December 1998. Defendants never repossessed their collateral. Plaintiffs eventually filed for bankruptcy .
13. Plaintiffs filed suit against defendants GMEDC, CRV, and the Town on December 12, 2001. The counts of the complaint were: (1) breach of contract; (2) negligent or intentional breach of fiduciary du
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