Jerrold S. Pressman v. FRANKLIN NATIONAL BANK and GORDON E. INMAN

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0304P (6th Cir.)
File Name: 04a0304p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
JERROLD S. PRESSMAN,
Plaintiff-Appellant,
v.
FRANKLIN NATIONAL BANK
and GORDON E. INMAN,
Defendants-Appellees.
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No. 03-5592
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 00-00799—Todd J. Campbell, District Judge.
Argued: August 10, 2004
Decided and Filed: September 9, 2004
Before: KEITH, MARTIN, and ROGERS, Circuit Judges.
_________________
COUNSEL
ARGUED: Jeffrey Alan Greene, Nashville, Tennessee, for
Appellant. Joseph A. Woodruff, WALLER, LANSDEN,
DORTCH & DAVIS, Nashville, Tennessee, for Appellees.
ON BRIEF: Jeffrey Alan Greene, Nashville, Tennessee, for
Appellant. Joseph A. Woodruff, W. Travis Parham,
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WALLER, LANSDEN, DORTCH & DAVIS, Nashville,
Tennessee, for Appellees.
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OPINION
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BOYCE F. MARTIN, JR., Circuit Judge. This dispute
arises from Franklin National Bank’s failure to make a loan
to a partnership called Inglehame Farm, LP, of which Jerrold
S. Pressman was a limited partner. Pressman alleges that the
Bank is liable for breach of contract, fraud and civil
conspiracy, and that Gordon E. Inman – the founder of the
Bank and president of the Bank’s parent company – is liable
for procurement of breach of contract and civil conspiracy.
Following a nine-day bench trial, the district court entered
judgment in favor of the defendants on all claims. For the
reasons discussed below, we AFFIRM.
I.
The Inglehame Farm partnership was formed to accomplish
one purpose: to purchase from different sellers several tracts
of land in Williamson County, Tennessee, combine the tracts
and develop them as a residential subdivision. The closing on
one of the parcels of land, labeled the “Sharp property,” was
originally scheduled for August 1, 1996. The partnership
sought to rezone the property prior to the closing. Robert
Geringer, one of the general partners of the partnership, spoke
with Charles Lanier, a loan officer at the Bank, about
obtaining an acquisition loan for the Sharp property. The
partnership had conducted business with the Bank on prior
occasions. Lanier told Geringer that the Bank would need to
obtain a participating bank to finance a portion of the loan
because the size of the loan would exceed the Bank’s legal
lending limit.

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No. 03-5592 Pressman v. Franklin Nat’l Bank, et al. 3
When the rezoning hearing was set for a date that followed
the scheduled closing date, the partnership asked the sellers
for an extension of the closing date, which was refused.
Lanier subsequently told Geringer that the loan had been
approved by the Bank’s loan committee. Still, however, the
Bank needed to obtain a participating bank in order to provide
the loan. The Bank first asked its parent company, Franklin
Financial Corporation, to participate in the loan, but Franklin
Financial refused. The Bank then approached The Banker’s
Bank of Atlanta, Georgia, which gave more consideration to
the proposal. Shortly before the scheduled closing, Lanier
told Geringer that Banker’s Bank required approval of the
rezoning prior to participating in the loan. Geringer testified
that Lanier told him that this was the only impediment to
Banker’s Bank agreeing to participate, but Lanier and the
Bank denied that Lanier made such a representation. The
district court did not make a factual finding as to whether
Lanier represented that the rezoning approval was the only
impediment to Banker’s Bank participating in the loan.
Geringer later met with Inman, the founder of the Bank and
the president of its parent company, who offered to make a
personal loan to the partnership on certain terms, including
the payment of $15,000 per lot profit. Geringer rejected the
offer because, in his view, the terms were extremely
unfavorable to the partnership.
Geringer then negotiated an extension of the closing date
on the Sharp property to August 15, at an additional, non-
refundable cost of $100,000. Geringer and the Bank
negotiated and executed a Commitment Letter, which was
dated July 31, 1996. The Letter, which expresses the Bank’s
intent to make the loan to the partnership subject to certain
terms and conditions, forms the basis for Pressman’s breach
of contract claim. Pursuant to the Commitment Letter, the
Bank’s obligation to make the loan to the partnership was
contingent on its ability to find a participating bank to fund a
portion of the loan.
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The rezoning plan for the Sharp property was officially
approved on August 12. Nevertheless, Banker’s Bank
decided not to participate in the loan to the partnership, and
it notified the Bank of its decision. Lanier, in turn, advised
Geringer that the Bank would not make the loan, but he
mentioned that Inman was still willing to make a private loan.
Steve Morriss, another general partner of the partnership,
urged the partnership to accept Inman’s proposal. Geringer
again rejected the offer, however, and subsequently obtained
a loan elsewhere, though on less favorable terms than
originally proposed by the Bank.
The partnership suffered from in-fighting for the next two
years, and eventually filed for bankruptcy. Pressman made an
offer to purchase all of the partnership’s claims as part of the
bankruptcy proceeding, which was approved by the
bankruptcy judge over Morriss’s competing offer. Pressman
filed the instant lawsuit against the Bank and Inman. After a
nine-day bench trial, the district court issued a written
memorandum and order entering judgment in favor of the
defendants on all claims.
II.
On appeal from a judgment entered following a bench trial,
we review the district court’s factual findings for clear error
and its legal conclusions de novo. Harrison v. Monumental
Life Ins. Co., 333 F.3d 717, 721-22 (6th Cir. 2003).
A. Breach of Contract Claim Against the Bank
Pressman’s breach of contract claim is premised upon two
theories: first, that the Bank breached its obligations under the
Commitment Letter by failing to make the loan to the
partnership; and second, that the Bank breached its obligation
of good faith and fair dealing in connection with its search for
a participating bank. We will address each theory in turn.

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No. 03-5592 Pressman v. Franklin Nat’l Bank, et al. 5
1. Participating Bank Condition
The district court rejected Pressman’s claim that the Bank
breached its obligations under the Commitment Letter on the
ground that one of the conditions in the Letter – the so-called
“participating bank condition” – was not fulfilled. That
condition, which is listed under the heading “Special
Conditions for Loan,” provides as follows:
(c) Participant. Lender shall obtain a participating
lender that will commit to fund an aggregate of at least
$2,000,000 of the Loan on a pro-rata participation basis
and on other terms and conditions acceptable to both
lenders. Should Lender be unable to locate an
acceptable participant lender or to agree on the terms of
the participation, then Lender shall refund the
Borrower’s Commitment Fee (or any portion thereof that
has been paid to Lender), and Lender shall have no
obligation to make the Loan, and this Commitment Letter
shall be null and void . . . .
(Emphasis added).
The district court found that as of the date set for closing, the
Bank had been unable to locate a participating bank. For this
reason, the district court held that “the Bank’s obligation to
make the loan was excused” because the participating bank
condition in the Commitment Letter had not been satisfied.
Pressman argues that the district court’s conclusion was
erroneous because the Bank “waived” the participating bank
condition. Under Tennessee law, a party may waive his or
her known rights under a contract by either express
declarations or by acts manifesting an intent not to claim the
rights. Jenkins Subway, Inc. v. Jones, 990 S.W.2d 713, 722-
23 (Tenn. Ct. App. Nov. 18, 1998). According to Pressman,
the Bank’s waiver occurred even before the Commitment
Letter was executed, when Lanier orally represented to the
partnership that the participating bank was ready to close,
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subject only to final rezoning approval. Pressman’s argument
lacks merit.
First, even if Lanier had the authority to effect such a
waiver on behalf of the Bank, there is no evidence that he
possessed the requisite “intent” to do so. Second, Lanier’s
alleged representation predated the execution of the
Commitment Letter; in other words, at the time of Lanier’s
alleged representation, the Bank had no rights under the
participating bank condition that could be waived. Third, a
merger and integration clause contained in the Commitment
Letter precludes Pressman from relying upon alleged
representations made prior to the execution of the
Commitment Letter. That clause provides:
This Commitment Letter when accepted by Borrower
constitutes the sole and entire agreement between Lender
and Borrower regarding Lender’s commitment to lend
money to Borrower and all previous negotiations, letters,
proposals, understandings and other communications
are superseded by this Commitment Letter.
(Emphasis added.) Fourth, the Commitment Letter requires
any “waiver of [its] terms” to be “in writing” and “executed
by both parties,” which was not done here.
Pressman also makes a promissory estoppel argument on
appeal. According to Pressman, Lanier’s alleged
representation to the partnership that Banker’s Bank would
accept the loan proposal so long as the rezoning plan was
approved constituted a “promise on the part of the Bank to
make the loan if the final [rezoning] approval was granted,”
upon which the partnership relied in paying $100,000 to
extend the closing date. Therefore, Pressman contends, the
Bank’s promise to pay the loan should be enforced to avoid
injustice under the doctrine of promissory estoppel. Our
review of the record reveals that Pressman did not raise this
issue in the district court, and the district court’s opinion does
not discuss it. “Issues not presented to the district court but

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No. 03-5592 Pressman v. Franklin Nat’l Bank, et al. 7
raised for the first time on appeal are not properly before the
court.” Wyckoff & Assocs. v. Standard Fire Ins. Co., 936
F.2d 1474, 1488 (6th Cir. 1991). For this reason, we decline
to address Pressman’s promissory estoppel argument.
2. Good Faith and Fair Dealing
Pressman also argues that the Bank breached its obligation
of good faith and fair dealing in seeking a participating bank
by failing to solicit more banks and failing to submit adequate
proposal materials to the banks. The district court held that
it was enough for the Bank to solicit only two banks to
participate, particularly given the Bank’s small size and the
short time until the closing date. The court also rejected
Pressman’s argument concerning the adequacy of the
proposal materials, citing testimony from officers of Banker’s
Bank indicating that their decision not to participate had
nothing to do with anything that the defendant Bank did or
failed to do, and was based solely on the fact that the terms of
the proposal were not sufficiently favorable to Banker’s Bank.
We agree with the district court’s reasoning and find no error
in its conclusion that the Bank acted in good faith and used
commercially reasonable efforts to secure a participating
bank.
We also reject Pressman’s argument that the district court
used the wrong legal standard by focusing on whether the
Bank acted in bad faith, rather than on whether it failed to act
in good faith. This argument elevates semantics over
substance. The district court cited and applied the proper
legal standard – which, as the district court recognized, is set
forth in cases such as Wallace v. National Bank of Commerce,
938 S.W.2d 684, 686 (Tenn. 1996) and Spectra Plastics, Inc.
v. Nashoba Bank, 15 S.W.3d 832, 843 (Tenn. Ct. App. 1999).
The fact that its opinion also mentioned the phrase “bad faith”
is simply of no consequence.
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B. Exclusion of Evidence of Alleged Corruption Within
the Bank
At the bench trial, Pressman sought to admit affidavits from
Ken Kiel, a former officer of the Bank, and E.A. Gregory, a
Bank customer, in an attempt to show corruption within the
Bank. Kiel’s affidavit stated that while employed at the
Bank, he had been instructed by his superior to decline a
customer’s transaction because Mr. Inman wished to do the
deal individually. Relatedly, Gregory’s affidavit indicated
that Inman had provided private loans to him that involved
high rates of interest coupled with payments in cash of
additional amounts. This evidence was apparently offered in
connection with the breach of contract claim, as evidence that
the Bank breached its obligation of good faith and fair
dealing. The district court characterized this evidence as
“classic propensity evidence” and excluded it pursuant to
Federal Rules of Evidence 404(b) and 403.
We review the district court’s exclusion of evidence for
abuse of discretion, and reverse only if we are “firmly
convinced” of a mistake that affects “substantial rights” and
amounts to more than harmless error. United States v.
Copeland, 321 F.3d 582, 599 (6th Cir. 2003). Rule 404(b)
states as follows:
Evidence of other crimes, wrongs, or acts is not
admissible to prove the character of a person in order to
show action in conformity therewith. It may, however,
be admissible for other purposes, such as proof of
motive, opportunity, intent, preparation, plan,
knowledge, identity, or absence of mistake or accident
. . . .
A three-part test is used to determine whether evidence is
admissible pursuant to Rule 404(b):
First, the district court must decide whether there is
sufficient evidence that the other act in question actually

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No. 03-5592 Pressman v. Franklin Nat’l Bank, et al. 9
occurred. Second, if so, the district court must decide
whether the evidence of the other act is probative of a
material issue other than character. Third, if the evidence
is probative of a material issue other than character, the
district court must decide whether the probative value of
the evidence is substantially outweighed by its potential
prejudicial effect.
United States v. Trujillo, No. 02-1521, 2004 WL 1630518, at
*8 (6th Cir. July 22, 2004) (citations omitted).
Pressman argues that “the excluded evidence showed that
Mr. Inman had the power and opportunity to cause officers of
the Bank to make business decisions based on his personal
interests and that the motivation of the Bank and Mr. Inman
in these matters was to advance Mr. Inman’s personal
interests, not to engage in normal banking practices.”
According to Pressman, these allegations are relevant to
whether the Bank breached its obligation of good faith and
fair dealing. The events to which Kiel and Gregory testified,
however, are wholly unrelated to the facts of this case.
Therefore, the probative value of the excluded testimony is
extremely slight, and is outweighed by its prejudicial effect.
Under these circumstances, the district court did not abuse its
discretion in excluding these affidavits.
C. Claim of Procurement of Breach of Contract Against
Inman
Pressman argues that Inman is liable for procurement of the
Bank’s breach of contract. In light of our holding that the
Bank committed no breach of contract, however, Inman
cannot be held liable for the procurement of that alleged
breach.
D. Civil Conspiracy Claim Against the Bank and Inman
Pressman argues that the Bank and Inman, along with
Morriss and others, conspired to defraud Pressman and the
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other partners of the Inglehame Farm partnership. Pressman
asserts that Morriss had been engaged in a scheme to defraud
his partners from the initial formation of the partnership, and
that the Bank and Inman provided financing to support the
scheme, knowing that Morriss’s intent was to defraud the
partnership.
In Tennessee, a civil conspiracy is a “combination between
two or more persons to accomplish by concert an unlawful
purpose, or to accomplish a purpose not in itself unlawful by
unlawful means.” Chenault v. Walker, 36 S.W.3d 45, 52
(Tenn. 2001) (citation and quotation marks omitted). “Each
conspirator must have the intent to accomplish this common
purpose, and each must know of the other’s intent.” Brown
v. Birman Managed Care, Inc., 42 S.W.3d 62, 67 (Tenn.
2001).
The district court acknowledged that there was some
evidence indicating that Morriss may have been involved in
a scheme to defraud the partnership, though it made no formal
findings on this issue. The court reasoned, however, that even
if Morriss was involved in such a scheme, the evidence did
not establish that either the Bank or Inman possessed the
requisite intent to be liable as civil conspirators. The relevant
evidence, as recited by the district court, is as follows:
The evidence indicates that Mr. Morriss, through a
company controlled by him, purchased property adjacent
to the Inglehame development (the “Hollis Property”)
that would have been valuable to the Partnership for the
access it provided to Wilson Pike, without disclosing that
purchase to the Partnership. The evidence also indicates
that the Bank refinanced the loan on that property.
The evidence indicates that Mr. Morriss purchased a
large amount of stock in the holding company that owns
the Bank; and that, at that same time, Defendant Inman
was selling a substantial number of shares of stock he
owned in the holding company. That stock was later

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No. 03-5592 Pressman v. Franklin Nat’l Bank, et al. 11
used as collateral for one of the loans Mr. Morris[s] or
one of his companies received from the Bank.
Plaintiff has also established that the Bank made
several loans to Mr. Morriss or to companies controlled
by him on terms that were exceptionally favorable to the
borrower, and “out of policy.” The evidence also
indicates that two of those companies to which the Bank
provided loans, Pete’s Landscaping and Mid-Tenn
Utilities, were used by Mr. Morriss to harm the
Partnership.
Finally, the evidence indicates that Mr. Morriss
conducted certain of his business with the Bank through
Defendant Inman, and that the two men travel[ed] to
California together in 1996.
We agree with the district court that this evidence does not
establish that either the Bank or Inman intended to defraud
the partnership – or even that the Bank or Inman knew that
Morriss intended to defraud the partnership. Therefore, the
district court properly awarded judgment in favor of the Bank
and Inman on Pressman’s civil conspiracy claim.
For these reasons, the district court’s judgment is
AFFIRMED.

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