Cornerstone Equipment Leasing, Inc. v. MacLeod

MacLeod (defendant) borrowed $725,000 from Cornerstone Equipment Leasing, Inc. (Cornerstone) (plaintiff) in July 1998 and signed a promissory note requiring monthly payments with 20% annual interest until the balance was paid. The balance was due November 1999. In December 1999, the parties agreed to extend the due date by two years. Over the next several years, they extended the due date multiple times. At one point in 2001, after MacLeod complained that he had already paid back more than the original loan amount, MacLeod claimed that he and Cornerstone’s president, Chevigny, came to an oral agreement to set aside the remaining principal balance, with the understanding that it would be used in a future business transaction. In June 2005, the parties agreed to another amended note. According to Macleod, Chevigny stated that the note would only be used for “internal purposes” and that the parties would work out the payment in some “future deal.” According to MacLeod, in December 2006, Chevigny also called him and stated that the parties were “even.” Macleod gave no consideration for this purported waiver of Cornerstone’s right to payment. Chevigny denied making that call. In June 2007, Chevigny called MacLeod and demanded payment on the June 2005 agreement. Chevigny also followed up with a letter demanding payment. When MacLeod did not pay, Cornerstone brought suit. The trial court granted summary judgment to Cornerstone. MacLeod appealed, arguing that Cornerstone did not effectively revoke its waiver.