Schuler v. Community First Nat. Bank, 98-349.
| Citation | 999 P.2d 1303 |
| Decision Date | 22 March 2000 |
| Docket Number | No. 98-349.,98-349. |
| Parties | Clint P. SCHULER, individually, and Schuler Construction, Inc., a Wyoming corporation, Appellants (Plaintiffs), v. COMMUNITY FIRST NATIONAL BANK, and Scott Weaver, individually, Appellees (Defendants). |
| Court | United States State Supreme Court of Wyoming |
Representing Appellants: E. Courtney Gruber of Central Wyoming Law Associates, P.C., Riverton, Wyoming.
Representing Appellees: Barry G. Williams and Kevin D. Huber of Williams, Porter, Day & Neville, Casper, Wyoming.
Before LEHMAN, C.J., and THOMAS, MACY, GOLDEN, and HILL, JJ.
The issue in this appeal is whether the district court erred in granting summary judgment for the appellees, Community First National Bank (the bank) and Scott Weaver. The appellants, Clint Schuler (Schuler) and Schuler Construction, Inc. (Schuler Construction), contend unresolved issues of material fact existed which precluded summary judgment on their claims for bad faith, negligence, and breach of agreement to provide a line of credit. We hold that the district court correctly granted summary judgment on the appellants' claims, and we, therefore, affirm.
This statement of the issues is found in the Opening Brief of Appellants:
This statement of issues is found in the Brief of Appellees:
In the Reply Brief of Appellants, this additional issue is set forth:
Did the trial court properly find that no duty existed except the one imposed by the contract between the parties?
Schuler Construction applied for a loan to fund a construction project. The bank approved the loan of $180,004.75, and, on June 24, 1996, the parties signed loan documents including a Variable Rate Commercial Revolving or Draw Note, Commercial Mortgage, Assignment of Rents and Leases, and Commercial Construction Loan Agreement. The parties agreed orally to a disbursement procedure by which Schuler Construction would present a draw request to the bank twice monthly along with checks payable to those subcontractors and materialmen that were entitled to the money requested. If, after reviewing the request and inspecting the project, the bank approved the request, it would deposit eighty-five percent of the draw request into Schuler Construction's checking account and notify the subcontractors to pick up their checks. Schuler Construction had to have the remaining fifteen percent on deposit.
Pursuant to the oral agreement, Schuler Construction submitted two draw requests on July 31, 1996, which totaled $25,498.07. The bank inspected the project, confirmed that Schuler Construction's fifteen percent was on deposit, and approved the request. On August 6, 1996, the bank deposited $21,673.36 into Schuler Construction's account. The next day, the bank discovered Schuler Construction's account no longer contained sufficient funds to cover the entire draw because checks unrelated to the construction project had cleared the account after the bank verified the amount on deposit. Furthermore, a cashier's check payable to Schuler's wife for $9,506 was issued from the account on August 8, 1996. In response, the bank placed a hold on the account and notified Schuler Construction of the problem. Schuler Construction did not cure the shortage in its account, and the account was subsequently closed.
Schuler and Schuler Construction filed a complaint in the district court on November 17, 1997. They included claims for: (1) interference with contract, (2) bad faith and breach of fiduciary duty, (3) negligence, (4) breach of agreement to provide a line of credit, and (5) interference with future business property. They later withdrew the fifth claim. On November 18, 1998, the district court granted the bank's motion for summary judgment on the remaining claims. The appellants appeal from the grant of summary judgment.
Summary judgment is appropriate only when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c); Century Ready-Mix Co. v. Campbell County Sch. Dist., 816 P.2d 795, 798 (Wyo. 1991). A material fact is a fact that, if proved, would establish or refute an essential element of a claim or defense asserted by a party. Century Ready-Mix Co.,816 P.2d at 799. When reviewing a grant of summary judgment, this Court will consider the record in the light most favorable to the party opposing the motion and give that party the benefit of all the favorable inferences we may fairly draw from the record. Id. We will uphold summary judgment if we can do so under any proper legal theory on the record presented. Id.
In their first issue, the appellants contend the district court erred in granting summary judgment on their claim for bad faith and breach of fiduciary duty. The district court wrote:
The court finds no bad faith or breach of a fiduciary duty. The loan agreement, promissory note, and mortgage created only a creditor/debtor relationship. The evidence presented did not present a special relationship and the court could find no evidence that the bank acted in bad faith when it required the 15% equity by the borrower or when it froze the account. When the advances were made to the account and the funds needed to be released, there was not enough funds to cover the checks.
In their brief to this Court, the appellants concede "the facts of the case do not give rise to a finding that any higher duty was owed by the lender under the circumstances." That concession extinguishes their fiduciary duty claim, and only the bad faith portion of this issue remains.
The appellants claim the bank acted in bad faith when it required Schuler Construction to deposit fifteen percent of the amounts it wanted to draw and when the bank froze its line of credit without giving reasonable notice or time to cure the default. We disagree. Although the loan documents do not call for Schuler Construction to maintain fifteen percent of the loan request, the parties amended their written agreement by the practices they followed in the loan administration.2 Evidence of that practice is unchallenged in the record and supported by the appellants' complaint, which described that procedure. The testimony of both Schuler and a loan officer reflect that procedure, and the draw requests made and signed by Schuler Construction...
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