Jacobson–Campbell Excavation, Inc. v. M & I Marshall & Ilsley Bank, 106,838.
| Decision Date | 14 September 2012 |
| Docket Number | No. 106,838.,106,838. |
| Parties | JACOBSON–CAMPBELL EXCAVATION, INC., Pate–Campbell Properties, Inc., Joseph W. Campbell, and Rockwood at Prairie Highlands, LLC, Appellants, v. M & I MARSHALL & ILSLEY BANK, Appellee. |
| Court | Kansas Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from Johnson District Court; James F. Vano, Judge.
Mark E. McFarland, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Overland Park, for appellants.
Robert D. Kroeker, and Desarae G. Harrah, of Martin, Leigh, Laws & Fritzlen, P.C., of Kansas City, Missouri, for appellee.
Before MALONE, P.J., MARQUARDT, J., and KNUDSON, S.J.
The appellants Jacobson–Campbell Excavation, Inc., Pate–Campbell Properties, Inc., Joseph W. Campbell, and Rockwood at Prairie Highlands, LLC appeal the decision of the Johnson County District Court granting Marshall & Ilsley Bank's summary judgment. The appellants contend: (1) summary judgment was inappropriate on the claims of negligence and fraudulent misrepresentation because the court, inferring that two mortgage releases were filed mistakenly, improperly failed to consider contrary factual inferences in a light most favorable to the appellants; (2) the district court erroneously concluded, as a matter of law, that Kansas does not recognize an independent cause of action for duress/economic coercion/business compulsion; (3) the district court improperly rejected the claim for breach of the implied covenant of good faith and fair dealing on the basis that the implied covenant only pertained to the performance of contract obligations; and (4) the district court erroneously concluded that no material facts supported claims for tortious interference with a prospective business expectation.
We affirm the district court's grant of summary judgment.
Joseph Campbell is the sole owner, officer, and manager of several business entities created for the purpose of holding and developing real property, including but not limited to Jacobson–Campbell Excavation, Inc. (JCE), Pate–Campbell Properties, Inc. (PCP), and Rockwood at Prairie Highlands, LLC (Rockwood). While PCP is the primary legal owner of Rockwood, Campbell is the sole manager of Rockwood.
In April 2001, Campbell, through JCE, applied for a $1,900,000 loan from Gold Bank. JCE created two mortgages in favor of Gold Bank to secure the $1,900,000 loan and another loan of $700,000 from Gold Bank. The mortgages covered property at 159th Street and Ridgeview, commonly called the Asbury Centre property, and were duly recorded in the Johnson County Register of Deeds, Book 6950 at page 885 and Book 6963 at page 585, respectively. Thereafter, Gold Bank renewed its credit to JCE under various promissory notes and debt modification agreements extending the maturity dates of the original notes. Eventually, the two promissory notes were reduced to a single promissory note in the amount of $1,850,000, which was renewed on July 31, 2005.
On October 6, 2005, two satisfactions of the mortgages were filed by Gold Bank. A crucial issue giving rise to the pending litigation is whether the mortgages were mistakenly or intentionally released of record. In April 2006, Gold Bank was purchased by and merged into Marshall & Ilsley Bank (M & I). M & I continued to extend credit to JCE until October 31, 2007.
According to Campbell, he first discovered that Gold Bank had filed the satisfactions in late 2006 or early 2007. Campbell had sought additional financing from the Bank of Blue Valley, and the bank had agreed to accept a second priority on the Asbury Centre property as collateral for the loan. When the bank went to file its mortgage, however, it discovered no prior lien on the property and informed Campbell, who then discovered the satisfactions filed in 2005. Accordingly, before meeting with Kent Brown, M & I's loan officer, about additional credit in March 2007, Campbell had phone conversations with Brown and told him that satisfactions of the mortgages had been filed. Brown insisted that M & I still retained a security interest in the Asbury Centre property, even after Campbell provided copies of the satisfactions. Brown informed Campbell that M & I would only extend JCE's promissory note that matured on July 31, 2007, for an additional 90 days. On or before October 31, 2007, the principal and interest on the promissory note would become due.
In September 2007, Campbell sought and obtained an $11,000,000 line of credit with Columbian Bank and Trust for use of his various corporations. Subsequently, various promissory notes were executed (referred to by the parties in their appellate briefs as the “Rockwood loan”). Electronic mail sent contemporaneously with the Rockwood loan indicated that the proceeds of the loan would be used in part to pay M & I $1,860,000 in satisfaction of JCE's debt to M & I and noting that the mortgage held by M & I had been released in error. After being paid, M & I executed two satisfactions of mortgage, which corresponded to the mortgages previously released by Gold Bank.
In August 2008, Columbian Bank and Trust entered receivership under the direction of the Federal Deposit Insurance Corporation (FDIC). There were no payments on the Rockwood loan after the FDIC took control of the bank. The FDIC sold the Rockwood loan to Rialto Capital Corporation, otherwise known as Multibank. Multibank sent a notice of default to Rockwood, PCP, and Campbell on September 30, 2010. The record contains no indication whether Multibank has brought suit for payment of the debt.
The lawsuit is filed against M & I
The appellants filed suit against M & I on September 28, 2009, and ultimately alleged that M & I committed breach of contract, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation, breach of a fiduciary duty, duress/economic coercion/business compulsion, tortious interference with a prospective business advantage, and fraud. The appellants sought $22,030,010 in damages. However, in his deposition, Campbell claimed there had been damages of $48,778,790.79. M & I entered a general denial but also presented specific defenses to each claim.
The appellants and M & I filed competing motions for summary judgment. On July 1, 2011, the district court granted summary judgment to M & I on all claims. The appellants filed a notice of appeal and simultaneously filed a motion to alter or amend the judgment. On August 23, 2011, the district court denied the motion to alter or amend the judgment, affirming its previous ruling. The appellants filed another notice of appeal on September 22, 2011. We conclude the appeal is timely.
The district court did not err in granting summary judgment on all claims
Summary judgment is only appropriate when the pleadings and any available depositions, answers to interrogatories, admissions, and/or affidavits demonstrate a lack of dispute regarding the material facts, entitling the moving party to judgment as a matter of law. In assessing a motion for summary judgment, a court must resolve any inferences to be drawn from the evidence in a light most favorable to the nonmoving party. Nevertheless, a party opposing summary judgment has the obligation to direct the court to disputed facts, which, if interpreted favorably to the nonmoving party, could support a cause of action. See Kansas One–Call System v. State, 294 Kan. 220, 225, 274 P.3d 625 (2012).
On appeal, the appellants challenge the district court's summary judgment ruling as to 6 of the 10 claims subject to summary judgment. The district court's ruling as to the remaining claims are not challenged and therefore remain undisturbed on appeal. See Marinhagen v. Boster, Inc., 17 Kan.App.2d 532, 542, 840 P.2d 534 (1992), rev. denied 252 Kan. 1092 (1993); see also Friends University v. W.R. Grace & Co., 227 Kan. 559, 561, 608 P.2d 936 (1980) (). The appellants organize the arguments into four issues: (1) whether the district court improperly granted summary judgment on the negligent and fraudulent misrepresentation claims by erroneously inferring that the mortgage releases were a mistake rather than allowing a jury to make the factual determination; (2) whether the district court erred in ruling as a matter of law that Kansas does not recognize a tort claim for duress, economic coercion, or business compulsion; (3) whether the district court erroneously concluded that the record contained no facts supporting a claim for a breach of the implied duty of good faith and fair dealing; and (4) whether the district court erred in concluding that the appellants had failed to establish evidence supporting its claims for tortious interference with a prospective business advantage.
Before the district court, the appellants alleged that M & I committed negligent and fraudulent misrepresentation by claiming a continued security interest in the Asbury Centre property after Gold Bank had released the mortgages on October 6, 2005. The district court concluded that there was no evidence demonstrating an intentional relinquishment of the mortgages and therefore no evidence of a misrepresentation because the mortgage remained enforceable between JCE and M & I. The appellants contend that the district court's judgment was flawed because the court made inferences in favor of M & I based upon the evidence when the court was obligated to make any reasonable inferences in favor of the appellants in deciding whether to grant summary judgment.
In order to establish a claim for negligent misrepresentation, the appellants were required to establish that M & I conveyed false information to Campbell without exercising reasonable care in determining the veracity of the information conveyed, that Campbell justifiably relied on the false information, and that the appellants...
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