Saxon Homestead Creamery, LLC v. GreenStone Farm Credit Servs.
| Decision Date | 14 January 2015 |
| Docket Number | No. 2014AP1781.,2014AP1781. |
| Citation | 360 Wis.2d 492,864 N.W.2d 121 (Table) |
| Parties | SAXON HOMESTEAD CREAMERY, LLC, Plaintiff–Respondent, v. GREENSTONE FARM CREDIT SERVICES, ACA, Defendant–Appellant. Saxon Homestead Farm, LLC, Plaintiff–Respondent, v. GreenStone Farm Credit Services, ACA, Defendant–Appellant. |
| Court | Wisconsin Court of Appeals |
GreenStone Farm Credit Services, ACA (GreenStone) appeals from a grant of summary judgment to Saxon Homestead Creamery, LLC (Creamery) and Saxon Homestead Farm, LLC (Farm) and a denial of summary judgment to GreenStone. For the following reasons, we reverse the circuit court's grant of summary judgment to Creamery and Farm and remand for entry of summary judgment in favor of GreenStone.
¶ 3 Creamery and Farm had various loans from GreenStone which were due in full by the maturity date of April 1, 2011. They failed to pay off some of the loans by that date, and GreenStone notified them that the loans had matured on April 1 and the balance was due in full. The parties continued communicating regarding the outstanding loans, and Creamery and Farm made interest payments, as well as default interest payments, on the loans as requested by GreenStone. On June 29, 2011, GreenStone classified the loans into nonaccrual status pursuant to 12 C.F.R. § 621.6(a)(3) (2010).
¶ 4 On September 6, 2011, Creamery and Farm each signed a separate forbearance proposal, both of which GreenStone also signed. Each proposal required Creamery and Farm to make monthly interest payments, as well as default interest payments, with full payment of all principal and remaining interest due no later than March 1, 2012 (Forbearance Proposal)2 ; conditions both Creamery and Farm satisfied. Creamery's and Farm's loans were paid in full on December 30, 2011, and January 12, 2012, respectively.
¶ 5 Creamery and Farm each had at least one other loan through GreenStone which had not matured and upon which they were not in default and continued to make required principal and interest payments. Because Creamery's and Farm's loans that had been due on April 1, 2011, were placed into nonaccrual status, these other loans were also placed into nonaccrual status, pursuant to 12 C.F.R. § 621 .7 (eff.Dec.31, 2010). GreenStone provided Creamery and Farm with 2011 patronage payments on these other loans, but did not provide them with 2011 patronage payments on the loans which had matured on April 1, 2011.
¶ 6 Creamery and Farm each filed separate small claims complaints against GreenStone based upon GreenStone's failure to pay them patronage on the loans which had been due on April 1, 2011. These matters were consolidated. GreenStone moved for summary judgment. Creamery and Farm responded and also requested summary judgment in their favor. The circuit court granted summary judgment to Creamery and Farm and denied GreenStone's motion. GreenStone appeals.
¶ 7 On appeal, GreenStone argues that the circuit court erred in granting Creamery and Farm's motion for summary judgment and denying its motion because there is no genuine issue of material fact “to dispute that [GreenStone] properly denied certain patronage distributions to Creamery and Farm for calendar year 2011.”3 We agree.
¶ 8 We review de novo a grant of summary judgment, applying the same methodology as the circuit court. Paskiewicz v. American Family Mut. Ins. Co., 2013 WI App 92, ¶ 4, 349 Wis.2d 515, 834 N.W.2d 866. Summary judgment is proper when the relevant facts are undisputed and only a question of law remains. Id.
¶ 9 For purposes of this decision, we assume the Resolution is a contract, as Creamery and Farm would like us to do, and we interpret it as such. See Attoe v. Madison Prof'l. Policemen's Ass'n., 79 Wis.2d 199, 208, 255 N.W.2d 489 (1977) (); Schoenburg v. Klapperich, 239 Wis. 144, 150, 300 N.W. 237 (1941) (); O'Leary v. Board of Dirs., Howard Young Med. Ctr., Inc., 89 Wis.2d 156, 169, 278 N.W.2d 217 (Ct.App.1979) (). Our goal in interpreting contracts “is to determine and give effect to the parties' intention,” Solowicz v. Forward Geneva Nat'l., LLC, 2010 WI 20, ¶ 34, 323 Wis.2d 556, 780 N.W.2d 111 (citation omitted), and our interpretation of a contract is de novo, Estate of Kriefall v. Sizzler USA Franchise, Inc., 2012 WI 70, ¶ 14, 342 Wis.2d 29, 816 N.W.2d 853. Where, as here, we must also interpret and apply federal regulations related to the parties' contract, we do so independently of the circuit court. See id.; Franklin v. Housing Auth., 155 Wis.2d 419, 426, 455 N.W.2d 668 (Ct.App.1990).
¶ 10 Because the Resolution provides that a patron is not eligible for a patronage payment with respect to any loan that is “in nonaccrual status at either the end of the fiscal year or the date the loan was paid in full, unless such borrower was current as to both principal and interest at that time,” we must first decide whether the Creamery and Farm loans at issue were in nonaccrual status at either the time the loan was paid in full or on December 31, 2011. Our decision on this issue is straightforward.
¶ 11 It is undisputed that the loans were “classified into nonaccrual status” on June 29, 2011. Creamery and Farm essentially contend that the Forbearance Proposal had the effect of reinstating the loans to accrual status, arguing that as of September 6, 2011, the date they signed the proposal, the loans no longer met the criteria set forth in 12 C.F.R. § 621.6(a)(3). The Code of Federal Regulations, however, sets forth specific criteria that must be met before an institution, such as GreenStone, may reinstate a loan to accrual status after it has been placed into nonaccrual status. See 12 C.F.R. § 621.9 (2010). Section 621.9 provides that a loan may be reinstated into accrual status if:
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