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Commissioner Hanley, Harford Bank Battle Over $570K Loan

Harford Bank says the Bel Air elected official defaulted on a business loan.

Commissioner Terence Hanley is in a legal dispute with Aberdeen-based Harford Bank about a $570,000 loan that court records indicate he may have defaulted on—an accusation he denies.

Hanley’s company, Hanley Investments LLC, received the loan Dec. 9, 2009 to build houses in the 1000 block of Oak Street in Bel Air. The five undeveloped lots are off of James Street, less than a mile north of the town limits where he is an elected official.

The bank states in documents filed in that Hanley, his company and his wife, Debra, defaulted on the loan because they did not pay interest for four consecutive months between November and February.

“Defendants failed to make payments in accordance with the terms of the Note for the months of November 2010 through and including February 2011, and Defendants are, therefore, in default,” reads the bank’s complaint requesting a confessed judgment against Hanley.

On March 25, Judge Stephen M. Waldron entered a confessed judgment against Hanley, his wife and the corporation, ordering full payment of the loan, interest, late charges and attorney’s fees—for a total of $669,241, court records state.

A confessed judgment agreement signed between a bank and a borrower allows a judge to order full payment of a defaulted loan without a hearing or other prior notice given to the borrower.  

On May 26, about two months after Waldron authorized the confessed judgment, Hanley asked the judge to reconsider and his attorneys filed a motion to vacate, or dismiss, the order against the Republican commissioner.

Hanley’s motion cites a 1996 Maryland case stating that “Maryland courts have long recognized that the practice of including in a promissory note a provision authorizing a confession of judgment lends itself far too readily to fraud and abuse.”

In his motion, Hanley states that a payment of slightly more than $30,000 was made to Harford Bank but that it was not credited by the lender. In a supporting affidavit, Hanley states he did not receive more than the $600,000 maximum originally agreed to in the loan, and therefore could not have defaulted.

Waldron granted the motion to dismiss the confessed judgment on June 21.

Hanley agrees that he must pay the loan—which is due in full by December, according to its terms—but not that he defaulted.

“I’m not disputing that I owe them the money,” Hanley said in a telephone interview. “It’s been vacated and [Harford Bank] got some jerk attorney who thinks he’s going to win and he’s not going to win.”

Harford Bank and its attorneys in the case have not returned numerous phone calls and messages seeking comment about the dispute.

Harford Bank asked Waldron on July 11 to reconsider his order to dismiss the judgment against Terence and Debra Hanley, claiming the couple did not properly appeal. Much of the legal back and forth between Hanley and Harford Bank centers on disagreements over filing deadlines. Harford Bank says Hanley's successful motion for dismissal of the confessed judgment is invalid because he didn't file it within 30 days. Hanley says Harford Bank's motion to reconsider the dismissal is bogus for a similar reason.

The bank’s motion to reconsider the order vacating the confessed judgment also states that Hanley's “payment of $30,000 [was] credited on July 13, 2010”—before the November to February period of nonpayment—and that Hanley’s arguments are “without merit.”

Hanley repeatedly told Patch the bank was being unfair and that the legal dispute did not warrant an article.

“There is no story there. I think it’s absolutely absurd and again I just think low class [to write about],” Hanley said Thursday.

Earlier that same week, after the July 18, he said: “The more assets you have, the more vulnerable you are, unfortunately. And they knew that, so they figured they’d stick it up my ass and make sure that they covered themselves.”

In the Thursday interview, Hanley said an article should not be written because he was worried the public would not be able to understand the loan and its payment schedule.

“If you’re really going to write this you need to sit down and I need to show it to you. That’s the only way you’re going to understand it,” Hanley said. “The average human being is dumb.”

Multiple attempts to meet Hanley and his attorney, Joseph Snee, to review documents failed.

Hanley said he is close to a $1 million settlement deal for the Oak Street property, money he would use to pay the loan, with Stephen Homes. The commissioner said it is a “done deal” that will be completed within the next week. Don Stephen, a sales representative for Stephen Homes, was not as specific.

“I’m not sure exactly when the settlement’s going to take place,” Stephen told Patch in a telephone interview.

Hanley, whose second term as a town commissioner expires this fall, has told Patch he plans to run for reelection. He  for the County Council District C seat to James McMahan, who  to retain his seat.

One of Hanley’s colleagues who helped legally form Hanley Investments LLC in 2005 has since distanced himself from the business.

Bel Air mayor and fellow commissioner David Carey served as the resident agent for Hanley Investments until May 5. His name appears on the confessed judgment signed by Judge Waldron.

“[Hanley's] now the resident agent,” Carey said in a telephone interview Thursday. “After I got served with a lawsuit by Harford Bank a few months ago—and I don’t do any legal work for Terry—so I said, ‘Terry, why don’t you take over as the resident agent.’”

Joe July 25, 2011 at 12:13 PM
I don't know this guy Hanley, but it sounds like he may be the so called "jerk" here. Not sure an individual who makes the statement "The average human being is dumb.” should even be in elected office. He obviously does not think before he opens his mouth!
Janet Hester Thomas July 25, 2011 at 04:00 PM
I don't know what I hate more; being called "dumb" or that more houses are going to be built in Bel Air. We already have enough houses for sale on the market. Why do we need more new houses? I am already ticked off that what was called an access road off of route one is actually MORE houses being built. Come on guys how many more houses do we need to build in Bel Air?
Ronsherry3 July 25, 2011 at 11:29 PM
You would think a hometown bank would work with a hometown guy. Terry's not bad prob'ly just got a little worked up. I still like him. But good reporting. I bet the "others" are too scared to do anything on this. Keep up the good work.
Noel Hampton July 26, 2011 at 12:35 AM
I'm the average human being -- guess that makes me dumb - but remember I do vote and I guess it will not be for you.
Tom Brandis July 26, 2011 at 11:31 AM
I think what was said, then misquoted, was “the average human being is dumb when it comes to the intricacies of financial terms”. I agree. Ever look at the terms and conditions from a credit card company?
Brad Gerick July 26, 2011 at 11:45 AM
Tom, you are partially correct. The preceding paragraph indicates that "[Hanley] was worried the public would not be able to understand the loan and its payment schedule." But nothing was misquoted. Both conversations were recorded with Mr. Hanley's knowledge. -BG
Tom Brandis July 26, 2011 at 11:53 AM
Thanks for clearing that up Brad. I knew that Terry was trying to say something along those lines, and not the fact that most people are dumb. Poor choice of words, maybe, but not everyone can articulate their thoughts in a manner that someone is not going to take offense.
Noel Hampton July 26, 2011 at 01:59 PM
Maybe he should pay up and shut up. The funny thing about borrowing money is that you do have to pay it back -- ON TIME!!
Todd Holden July 26, 2011 at 03:57 PM
terry's been around long enough to know better than to say things w/o thinking...no matter how worked up, he said some things, that were, using his own word. 'dumb'...Terry's a good guy, but when you're playing in the big sandboxes, you have to play by the rules, and the banks with the $$$ make the rules...just sayin'
Tom Brandis July 26, 2011 at 05:04 PM
Agreed about playing buy the rules with the banks. I'm not close at all to Terry, however, I have known him and his family for years and I never have heard him speak down to, or bad about anyone. Just a poor choice of words. I just think too many people get their panties in a bunch and take things too personally. Everyone puts their foot in their mouth at one time or another and everyone wants to jump on the bashing bandwagon. In this case, I'd cut him some slack. Plus, we don't know the whole story about the loan or why interest payments weren't made for a few months. For all we know, maybe someone was in arrears with payments to him which caused a delay in his payment to the bank. It happens.
Brad Gerick July 27, 2011 at 01:38 AM
I have deleted a comment for Phil Dirt. Our Terms of Use prohibit personal attacks on individuals. -BG http://belair.patch.com/terms
Patrick Wallis July 27, 2011 at 11:31 AM
So let's see, what's the story? I'm fairly well educated, don't watch too much television, and try to always read a variety of opinions. But, I have to confess...before I read this article I had never heard of a confessed judgment myself. Now, I don't consider myself dumb...just ignorant of certain financial transactions. No, I don't take offense at Hanley's comments. In fact, I agree with his perspective that there's just no story. If I wanted a hatchet job, I'd read The Dagger. If Hanley steals money or the bank screws him over, then you've got a story.
Charlie24 July 27, 2011 at 01:02 PM
I have to agree with Patrick's comment. I'm seeing more and more DUI arrest info and gossip on your site. Stick to REAL news. This is a personal financial matter - in today's economy, how many other people are having difficulty. Not a story, in my opinion. I stopped reading the Aegis for this very reason.
Brad Gerick July 27, 2011 at 01:29 PM
Charlie, could you please point to an example of what you consider gossip on the site? As for this article, it is a business financial matter involving an elected official. A legal battle involving ANY elected official in this coverage area will be considered front page/top-of-the site news. I appreciate your feedback and readership and hope that you have been able to read the positive things covered on the site, too. The daily job opening and the top story right now about e-readers in HCPS are just a couple examples. Feel free to email or call me (the info is on my profile) at any time to discuss your concerns. -BG
Jennifer July 28, 2011 at 01:55 PM
I have known Terry for over twenty years and consider him a friend. I don't believe for one minute he said or believes the average person is dumb. He and his wife Debra are wonderful people, honest and with class. I am sure many have had problems with loans and payments and have felt the frustration of dealing with the complicated process. If he was not an elected official this negative article would not have been written. Terry is a gifted sales and business man and I am more than confident this issue is going to be resolved. It is sad the article was written in the first place considering all the good he and his wife have done for our county. There must be more important things to write about than a simple miss understanding with loan payments by a motivated and positive elected official. Considering also that the article was written only months before he plans to run again is sad. This is not Terry or what he represents. I would like to see an article about all the great things he and Debra have done in light of bashing him for something blown far out of proportion. Mrs. Jennifer Stuart
tom gardiner July 28, 2011 at 02:57 PM
SOMETIMES IN LIFE WE DONT THINK BEFORE WE BUY IS IT A NEED NUMBER 1 OR NUMBER 2 IS IT A WANT. EVERYONE IN LIFE HAS BILLS TO PAY .BUT SOMETIMES WE PLAY BEFORE THE BILLS ARE PAYED. REMEMBER YOUR CREDIT PAY YOUR BILLS ON TIME AND YOU WONT BE CALLED. AND INVEST IN WHAT YOU CAN AFFORD AND NO MORE. IF YOU DONT HAVE YOUR HEALTH YOU DONT HAVE ANYTHING . LIVE ON YOUR INCOME AND NO MORE. BILLS FIRST PLAY LAST
Alice July 29, 2011 at 03:29 AM
I agree tom. Also as an elected official, you should expect to be in a fish bowl so to speak. People who elected you, expect a little more from you. I do not know him personally and I'm sure he is a great guy but being in the "public Eye" He should be leading by example.
N Dwyer September 12, 2011 at 10:56 PM
This is definitely biased, and after reading the other articles that you have written about this man, it would seem that you really have it out for him, or somebody is paying you to smear him. Maybe there's a reason you aren't working for the Aegis, or The Sun, or even scraping up dirt for The Dagger.
Mark September 13, 2011 at 12:39 AM
N Dwyer, how can you say this is a biased article? It appears to be info that was that was supplied by Mr Hanley and is available in court documents. I feel no sense of attack towards Mr Hanley. It appears that you are the one doing the smearing against The Patch. There is a reason Brad isn't working for the Aegis or The Sun, he is an excellent journalist, something you don't see in the Aegis or The Sun. Maybe they are paying you to smear the Patch. Do you hear how ridiculous that sounds?
Brad Gerick October 08, 2011 at 02:11 PM
Terence Hanley has registered to run in the 2011 Board of Commissioners election. http://patch.com/A-mGyX -BG
yuranet January 21, 2012 at 03:12 PM
Harford bank, how about now ? http://www.commonwealthnetbank.org
Ahmad0001 December 18, 2012 at 04:55 AM
I agree. Ever look at the terms and conditions from a credit card company? http://www.onlinedatastoragesite.com/softwares/or-windows-7-hard-disk-crashed-back-up-data-broken-are-you-able-to-recover.html

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