Miller v. WesBanco Bank, Inc.

Decision Date11 June 2021
Docket NumberNo. 20-0041, No. 20-0042,20-0041
Citation859 S.E.2d 306
Parties Thomas B. MILLER and Jamie L. Miller, Plaintiffs Below, Petitioners v. WESBANCO BANK, INC., Defendant Below, Respondent WesBanco Bank, Inc., Defendant Below, Petitioner v. Thomas B. Miller and Jamie L. Miller, Plaintiffs Below, Respondents
CourtWest Virginia Supreme Court
Dissenting Opinion of Justice Wooton June 11, 2021

Jacques R. Williams, Hamstead, Williams & Shook PLLC, George B. Armistead, Baker & Armistead, Morgantown, West Virginia, Attorneys for the Millers.

Joseph V. Schaeffer, Spilman Thomas & Battle, PLLC, Pittsburgh, Pennsylvania, James A. Walls, Spilman Thomas & Battle, PLLC, Morgantown, West Virginia, Attorneys for WesBanco Bank, Inc.

Jenkins, Chief Justice:

These consolidated appeals arise from breach-of-contract litigation between borrowers Thomas and Jamie Miller ("the Millers") and lender WesBanco Bank, Inc. ("WesBanco"). Having reviewed the parties’ briefs, their oral arguments, the appendix record, and the pertinent authorities, we resolve the issues herein raised as follows. The Millers, who prevailed below, challenge the circuit court's denial of prejudgment interest, which was based upon their failure to request the same from the jury pursuant to West Virginia Code section 56-6-27 (eff. 1923). We find no error and affirm the circuit court's ruling as to prejudgment interest.

In its separate appeal, which was consolidated with the Millers’ appeal for purposes of our review, WesBanco raises four assignments of error. First, WesBanco assigns error to the circuit court's admission of parol evidence related to the agreement between the Millers and WesBanco rather than limiting the evidence to only the Construction Loan Agreement itself. We apply the single transaction rule and find that the agreement between the Millers and WesBanco was not limited to only the Construction Loan Agreement. Furthermore, because the agreement was ambiguous, we find no error in the circuit court's admission of parol evidence. WesBanco next claims that the circuit court erroneously allowed the Millers to rely on the duty of good faith and fair dealing to modify WesBanco's contractual obligations. To the contrary, we find the duty of good faith and fair dealing was properly applied. In its third assignment of error, WesBanco argues that the circuit court erred in denying its motion for judgment as a matter of law because the Millers failed to establish a prima facia case as to their breach-of-contract claims and resultant damages. Having reviewed the evidence, we find the Millers presented sufficient evidence such that the circuit court did not err in denying judgment as a matter of law to WesBanco. Finally, WesBanco argues that the jury's damages award of $404,500 was against the clear weight of the evidence. We agree that the Millers’ evidence fails to support this verdict. Therefore, we reverse the award and remand this case for a new trial on damages only. Accordingly, the Millers’ appeal is affirmed. WesBanco's appeal is affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.

I.FACTUAL AND PROCEDURAL HISTORY

In August 2015, the Millers contracted with Residential Creations LLC ("Residential Creations") to build a family home for them in Fairmont, West Virginia.1 The agreed-upon price for the home was $690,000, and the construction contract provided the following schedule for payments to be made at the completion of certain project benchmarks:

Initial payment $ 70,000.00
Foundation 130,000.00
Pre-fab, Walls & Floor (In Shop) 60,000.00
Superstructure A 135,000.00
Superstructure B 50,000.00
Rough Mechanicals 75,000.00
Insulation/Drywall 65,000.00
Interior/Exterior A 50,000.00
Interior/Exterior B 45,000.00
Retainage: 10,000.00
Total $690,000.00

To finance the construction of their home, the Millers contacted WesBanco and worked with a loan originator named Michelle Hamilton. As part of a pre-qualification process that occurred in advance of their execution of the construction contract, the Millers were provided a document titled "WesBanco Bank, Inc.[,] Mortgage Loan Department[,] Expectations: Borrower/Builder" ("Expectations form"). The document was signed by the Millers on June 26, 2015; it also bears a signature above the line designated "Builder,"2 which is dated September 9, 2015.3 According to this Expectations form, lien waivers would be required from each subcontractor and the general contractor, and no funds would be disbursed for work not completed or materials not installed:

The following requirements must be addressed with the borrower(s) and their builder as soon as possible. Failure to make the borrower(s) and their builder aware of this information may result in a delayed closing or first draw.
....
All draw requests will be supported by the following documentation:
–Builder's Affidavit: Properly completed with all work detailed including materials and labor for all subcontractors. The total amount due must be clearly identified. The form must be signed by the general contractor in the presence of a notary public.
–Lien Waivers: Required. Properly executed and notarized Lien Waivers must be presented by each sub contractor in addition to the general contractor.
–Authorization to Draw Funds: Must be signed by the borrower(s) and must correspond with the Builder's Affidavit and Lien Waivers.
–Inspections: An inspection may be required depending on the total amount disbursed compared to the total amount complete. No funds will be advanced until the inspection (if required) has been received.
Funds will not be disbursed for work not completed. The first draw will not be made until the foundation is complete (exception would be funds disbursed at closing for lot purchase if applicable).
Funds will not be disbursed for materials on site not installed.

During the trial in this matter, Ms. Hamilton testified that she also told the Millers that WesBanco would obtain lien waivers before each draw payment and payment would be made only for completed work.

Thereafter, the Millers executed a residential Construction Loan Agreement and a separate Construction Loan Addendum4 with WesBanco, under which WesBanco agreed to loan them $555,000 to be used in building their new home.5 Section 4 of the Construction Loan Agreement, titled "Advance of Funds," set out the procedure for requesting WesBanco to disburse loan funds (sometimes referred to as draws):

4. Advance of Funds. Funds required for the project shall include Borrower's funds in addition to the loan proceeds set forth herein.
....
B.) The procedure for requesting disbusements [sic ] is as follows:
(i) When funds are needed for the project, Borrower shall notify Lender at least 48 hours prior to the date that an advance is required. Lender agrees to advance funds in accordance with the CONSTRUCTION LOAN DISBURSEMENT SCHEDULE attached hereto as Exhibit "A" and made a part thereof.[6] Lender shall be under no obligation to advance funds hereunder until Lender has obtained a satisfactory inspection report from an inspector of its own choosing indicating that sufficient construction has occurred to support the amount of draw requested and has received the executed Waiver of Liens from the general contractor and from the subcontractors, suppliers and materialmen, if deemed necessary. Borrower hereby grants to Lender, or its authorized representative, authority to enter onto the subject Property at reasonable times to perform the inspections provided for herein. Borrower further agrees that any such inspections shall in no way be construed to warrant the quality of workmanship of any work performed.
(ii) Draw Inspections are made as requested by Borrower according to the Disbursement Schedule.
C.) After depletion of the Borrower's portion of the contract price specified above towards the construction of the proposed improvements, Lender shall, upon application of the Borrower make periodic disbursements to the Borrower for payment for work actually performed , materials delivered , or materials for the delivery of which the [B ]orrower has entered into an agreement , provided:
(i) That the initial request for disbursement of the proceeds of the loan shall be accompanied by the executed waiver of lien forms signed by all contractors, subcontractors, and materialmen who furnished labor or materials to the site prior to the initial advance ;
(ii) That all subsequent disbursements shall have been approved by the Construction Loan Department, to the effect that the improvements are being completed in accordance with the predetermined schedule for utilization of the contract price and shall be accompanied by the executed waiver of lien forms signed by all contractors, subcontractors, and materialmen who furnished labor or materials to the site prior to the initial advance [.]

(Emphasis added). In addition, the Construction Loan Agreement included the following two provisions that are germane to this appeal:

6. Final Advance of the Loan. The obligation of the Lender to make the final advance under the loan shall be subject to the Borrower providing evidence satisfactory to the Lender that a permanent certificate of occupancy and all governmental approvals, federal, state and local, necessary for the use and occupancy of the improvements have been obtained, if required. In addition, the Borrower shall provide a survey satisfactory to the Lender of the completed improvements meeting the requirements stated in this Agreement. Borrower shall provide Lender with a final inspection report which must be satisfactory to the Lender, and the Lender has received the fully executed Waiver of liens from all subcontractors, suppliers and materialmen and the Builder's Affidavit.
7. Mechanic's Lien. Borrower agrees that any mechanic's lien filed upon the property shall be Borrower's sole responsibility and hereby holds Lender harmless against all losses, including but not limited to,
...

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