Michael Smith vs. Steve Futris vs. Richard Feltus

This is a contract dispute. The plaintiffs entered into a contract to buy the defendants' office condominium and equipment. The contract provided that the defendants would execute a note for the balance of the purchase price, payable in monthly installments over a twenty year term. The contract had no express provision on the right of prepayment. The promissory note expressly granted the plaintiffs the right of prepayment. Five years later, the plaintiffs attempted to prepay the note. The defendants refused the plaintiffs' offer, saying that the plaintiffs had no right of prepayment. The plaintiffs then ceased making any payments on the note. The plaintiffs later filed a lawsuit seeking, inter alia, a declaratory judgment that they had the right of prepayment. The defendants filed a counterclaim seeking reformation of the note and the deed of trust. The defendants also filed a third party claim for damages against the plaintiffs' attorney, who had prepared the closing documents, including the note. The defendants alleged that the attorney had breached his duty of due care to them by putting a right of prepayment in the note. The trial court found that the plaintiffs had the right to prepay and that the plaintiffs had made an effective tender of payment to the defendants. The trial court dismissed the defendants' third party claim against the attorney, finding that he had not represented the defendants and owed no duty of care to them. The defendants appeal. We affirm in part and reverse in part, finding, inter alia, that the promissory note gave the plaintiffs the right of prepayment, and also finding that the plaintiffs have not made an effective tender of payment.