- 27 -
titioners rely are not established by the record and/or are
irrelevant to a determination of whether such an agreement may be
so inferred.
We note initially that the Bank had no duty to notify Mr.
McDaniel as a guarantor of the 1989 note that the partnership had
not timely made the balloon payment under that note. Nor was the
Bank required to notify Mr. McDaniel as a guarantor of any
default under the 1989 note.5 Furthermore, contrary to petition-
ers' contention, the Bank exercised its right under the 1989 note
to delay collection of the balloon payment and did not materially
change the terms of, or forgo its right to receive the balloon
payment under, that note. Indeed, after the Bank notified Second
Street in April 1994 that the Second Street loan was in default,
the partnership obtained financing from Northern Trust, which it
used in October 1994 to pay off that loan. In addition, Mr.
Palermo's testimony that the topic of Mr. McDaniel's liability
did not arise in his discussions during 1993 with personnel of
5 It is noteworthy that Mr. Palermo did inform Mr. McDaniel
that the balloon payment had not been timely made, at least some
time shortly before Mr. McDaniel wrote Mr. Martens on Apr. 26,
1994, with respect to the Apr. 21, 1994 letter that Mr. Martens
had sent to Mr. Palermo informing him that NationsBank/Amresco
considered the 1989 note to be in default. Since Mr. McDaniel
continued to see Mr. Palermo on a daily basis throughout the
years at issue after he assigned his partnership interest to Mr.
Palermo in May 1992, we believe that it is likely that Mr.
McDaniel was aware well before April 1994 that Second Street had
not made the balloon payment.
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