Appeals Court Orders New Trial In Hanna Loan Dispute

FAYETTEVILLE -- A federal appeals court Monday ordered a new trial in a breach of contract case involving Hanna's Candles and Bank of America.

The 8th U.S. Circuit Court of Appeals panel said the jury's June 2012 verdict in U.S. District Court in Fayetteville went against the weight of evidence in the case. U.S. District Judge Jimm Hendren heard the case.

Bank of America sued Burt Hanna, JB Hanna company, Hanna's Candle Company and Kerzen Properties in federal court in November 2010, seeking to foreclose on three properties, claiming the companies failed to repay more than $16 million in business loans.

"The jury's conclusion that the Hanna parties did not breach is against the great weight of the evidence," the judges wrote in their opinion. "The parties entered into enforceable contracts. The bank satisfied its commitments thereunder. JB Hanna and Kerzen failed to fulfill their obligations under those contracts when JB Hanna did not pay the 2005 loan balance at its maturity in September 2010 and when Kerzen breached the financial-condition covenants. The bank was financially harmed."

The fact Hanna parties paid the bank $8.75 million in May 2012, well after the due date, did not eliminate the breach of contract that arose from the failure to make timely payments on the JB Hanna loans, judges said. Payments on associated loan agreements were accelerated because of the defaults.

The appellate court also found Hanna's should not have been awarded more than $400,000 worth of attorney fees in the case.