402.330.6300 www.walentineotole.com 11240 Davenport St. • Omaha, NE 68154-0125 WALENTINE O’TOOLE, LLP When time is of the essence, experience counts. Walentine O’Toole blends confidence, experience and knowledge with the personal attention you can expect from a regional law firm. Nebraska, Iowa and South Dakota Celebrating 40 years serving our valued clients. MORE FACE TIME. LESS WAIT TIME. Visit NebraskaBlue.com/Telehealth to learn more. Health benefits that give you access to virtual visits with doctors and specialists, even if you’re out of state. So you can get the care you need — wherever you are, whenever you need it. An independent licensee of the Blue Cross and Blue Shield Association. managing it. The lender, in turn, argued that the unambiguous language of the personal guaranties was controlling and did not provide any of the extra-contractual obligations upon it, which the guarantors sought to impose to avoid their obligations to pay the company’s debt. The Nebraska Supreme Court rejected the guarantors’ effort to impose additional duties upon a lender that contradicted or expanded the scope of what was set forth in the text of the guaranty. As in prior cases, the Court reaffirmed its holding that a creditor may assume a surety has obtained information from other sources or assumed the risks involved with guarantying a debt and a duty of disclosure may only arise if the creditor knows or has good grounds for believing: (1) the surety is being deceived or misled, or (2) the surety has been induced to enter the contract in ignorance of facts materially increasing his or her risks, of which the creditor has both knowledge and the opportunity to disclose prior to the surety’s acceptance of the undertaking. Finally, the Nebraska Supreme Court squarely rejected the efforts of the guarantors to utilize the implied covenant of good faith and fair dealing to imply an obligation on the part of the bank to follow “customary banking practices” into the personal guaranties as an additional term. The Court concluded “[a]rguments premised upon customary banking practices exceed the scope of the implied covenant of good faith and fair dealing, which is circumscribed by the terms of the parties’ agreement. To the extent that the Garrelts argue ‘customary banking practices’ are relevant to their other counterclaims, such practices are similarly inapplicable.” The Henderson case creates two key takeaways for Nebraska bankers: 1) carefully drafted contractual language specific to the lending activity of a bank is critical for the protection of the bank’s interests in the event of default, and 2) “customary banking practices” that the bank voluntarily undertakes do not give rise to contractual obligations different from or beyond the scope of a personal guaranty, or other contract between a bank and its customer. 21 NEBRASKA BANKER
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