While a loan guaranty agreement between a commercial mortgage lender and the managers of a condominium renovation project might have been a contract of adhesion, the Superior Court said the challengers of the agreement presented boilerplate arguments that failed to show a disparity in negotiating powers.

Judge Kate Ford Elliott, writing for Judge Sallie Updyke Mundy and Senior Judge James J. Fitzgerald III in an unpublished decision in Inland Mortgage Capital v. 38 North Front Street Associates onJune 24, said Esat Aslansan and Aysel Aslansan also failed to show that the contract terms unreasonably favored the mortgage lender that drafted the loan guaranty agreement.

Inland Mortgage Capital is a commercial mortgage lender that lent in June 2006 a little less than $9 million to 38 North Front Street Associates to acquire and renovate a 32-unit condominium building at 38 N. Front St. in Philadelphia, Ford Elliott said.

Front Street LLC, the general partner in 38 North Front Street Associates, Front Street's managing member Murat Aslansan and Amanda Aslansan, Murat Aslansan's spouse and the acting rental manager for the property, also executed additional security in the form of a loan guaranty agreement promising full and prompt payment of any indebtedness, Ford Elliott said. That agreement also limited their liability to $500,000.

"This case involves a major business enterprise by parties with the capacity to pledge hundreds of thousands of dollars," Ford Elliott said. "There is no indication that the deal was between a giant corporation and minor 'mom-and-pop' consumers. Appellants needed to better describe the alleged disparity in their positions."

Further, Ford Elliott said "appellants needed to identify those terms of the loan guaranty agreement to which they object and explain why the terms improperly favored Inland. While the determination of unsconscionability is a question of law, it is not a question that can be resolved in a total vacuum."

Undeveloped arguments must be waived, Ford Elliott said.

Esat Aslansan and Aysel Aslansan are Murat Aslansan's parents, according to the opinion.

The parties only had four paragraphs of argument on the issue that the loan guaranty agreement was a contract of adhesion, Ford Elliott said, including arguing that the Aslansans "'had no alternative other than executing the guaranty agreement. Had they refused, Inland would not have loaned money … for the construction project, which would have caused failure and triggering the guarantee obligation. Several provisions, if not all, of the loan guaranty agreement unreasonably favor Inland.'"

The unpublished decision upholds the summary judgment granted by Philadelphia Court of Common Pleas Judge Allan L. Tereshko.

The loan was modified in May 2008 to increase the principal advance to Front Street to $9.7 million, but Front Street failed to repay the promissory note at the date of maturity, June 30, 2008, Ford Elliott said.

Inland commenced an action for breach of the loan guaranty agreements in October 2008, Ford Elliott said.

Judgment was entered in favor of Inland for $3.8 million in June 2011 against the defendants, which had their liability limited as additional guarantors to $500,000, and the case was placed into deferred bankruptcy status, Ford Elliott said.

The rest of the defendants' issues were deemed waived by the court because they were not adequately raised in their statement of errors complained of on appeal.

The Aslansans' counsel, Robert M. Cavalier of Lucas and Cavalier, could not be reached for comment. Inland Mortgage's counsel, Brian T. Feeney of Greenberg Traurig, declined comment.

(Copies of the 17-page opinion in Inland Mortgage Capital v. 38 North Front Street Associates, PICS No. 13-1589, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •