St. Paul at Chase Corp. v. Manufacturers Life Ins. Co.

• Decision Date: 17 May 1971
• Docket Number: No. 400,400
• Citation: 262 Md. 192,278 A.2d 12
• Parties: ST. PAUL AT CHASE CORPORATION et al. v. The MANUFACTURERS LIFE INSURANCE COMPANY et al.
• Court: Maryland Court of Appeals

Page 192

262 Md. 192

278 A.2d 12

ST. PAUL AT CHASE CORPORATION et al. v. The MANUFACTURERS LIFE INSURANCE COMPANY et al.

No. 400.

Court of Appeals of Maryland.

May 17, 1971.

David Freishtat, Baltimore (Charles W. Williams, Hampstead, and Cornelius V. Roe, Towson, on the brief), for appellants.

Richard W. Case, Baltimore (Joseph M. Roulhac, Michael A. Pretl and Smith, Somerville & Case, Baltimore, on the brief), for Manufacturers Life Ins. Co. and Weaver Bros., Inc., of Maryland.

George W. Baker, Jr., Baltimore (Allen, Burch & Baker, Baltimore, on the brief), for Mullan Contracting Co. and Real Estate Management Co., Inc.

Argued before HAMMOND, C. J., and BARNES, McWILLIAMS, FINAN, SINGLEY, SMITH and DIGGES, JJ.

SMITH, Judge.

The trial judge in this case (Proctor, J.) prefaced his findings of fact (the delivery of which consumed a full court day and which took up over 50 pages of the record extract) with the comment:

'In the past, I have looked upon St. Paul as a great Christian apostle. However, from here on I'm very much afraid that to me it will mean a high-rise apartment building at the corner of St. Paul at Chase.'

The apartment house was the dream of appellant Charles W. Williams. As his literature put it, he conceived of it as a 'prestige address' intended for 'Gracious In-town Living'. Appellant St. Paul at Chase Corporation was formed for the purpose of erecting and operating the building. This litigation was produced when The situation here can perhaps best be understood by reference to the cast of characters:

Manufacturers Life Insurance Co. of Toronto, Canada, cancelled a commitment it had made for permanent financing of the apartment building.

St. Paul at Chase Corporation (St. Paul)-plaintiff below, and appellant and cross-appellee here; received judgment of $1,935,955.60 at trial below; this is the company which was developing the apartment project in question.

Charles W. Williams (Williams)-president and principal stockholder of St. Paul.

W. Hamilton Whiteford (Whiteford) and Edward A. Johnston (Johnston)-attorneys for St. Paul.

The Manufacturers Life Insurance Company (Manufacturers)-defendant below, and appellee and cross-appellant here; Canadian insurance company which was to provide a $4,800,000 permanent mortgage to St. Paul.

Thomas R. Lamon (Lamon)-mortgage superintendent for Manufacturers.

Donald W. Lambert (Lambert)-assistant mortgage superintendent for the United States for Manufacturers.

Weaver Bros., Inc. (Weaver Bros. or Weaver)-defendant below and appellee and cross-appellant here; retained by St. Paul to procure financing for the project.

Sidney H. Tinley, Jr. (Tinley)-senior vice-president of Weaver Bros.

E. Catherine Byrne Doehler (Miss Byrne)-another vice-president.

The Mullan Contracting Company (Mullan Contracting)-general contractor for the project.

Charles A. Mullan (Mullan)-president of Mullan Contracting.

Chemical Bank New York Trust Company (Chemical)-New York bank which eventually made $4,800,000 construction loan (not the permanent mortgage) for the project; not a party to this suit, but party to federal suit now pending and awaiting outcome of this suit.

Merchants Mortgage Company (Merchants)-another mortgage broker, which eventually procured the construction loan from Chemical.

Ralph Lubow (Lubow)-loan officer of Merchants.

Daniel A. Neumayer (Neumayer)-architect for the project.

Corbin C. Cogswell (Cogswell) of The Cogswell Construction Company-inspector for Weaver Bros. and Manufacturers.

Merrit & Harris-inspector for Chemical.

Williams and St. Paul sued Manufacturers and Weaver Bros. As Williams put it in his brief:

'Upon Defendants' Motion to Dismiss, Williams' individual claims against Manufacturers and Weaver were dismissed. However, as Williams is personally liable to Chemical for Chemical's Deficiency Decree, until this entire matter is resolved, Williams is an interested party and as such is a Party Plaintiff, see Newark Trust Co. v. Talbot Bank, 217 Md. 141, (141 A.2d 516) (1958).'

The exact breakdown of the judgments against Weaver Bros. and Manufacturers will be set forth later. St. Paul believes these judgments to be inadequate while Weaver Bros. and Manufacturers are convinced they had no liability. Therefore, they have all appealed. We shall affirm as to liability, eliminate punitive damages, and remand the case for entry of judgments which increase somewhat-but not to the extent desired by St. Paul-the compensatory damages.

Mullan Contracting and Real Estate Management Co. The six counts in the declaration were summarized by the trial judge as follows:

Inc., are use plaintiffs in the litigation and appear here as cross-appellees, being owed in excess of $300,000 by St. Paul.

'COUNT 1 OF THE DECLARATION

'Although it is long and verbose, the gravamen of this count is that Weaver breached its contract of December 6, 1963, with the Plaintiff. * * * ((Probably the gist of this count is contained in paragraphs 40 and 41 of the declaration which stated:

'40. The Plaintiffs allege that having accepted the above modifications of Weaver's offer, they then waited for more than a reasonable time for Defendant Weaver to provide them with a construction loan, as Defendant Weaver had promised to do. The Plaintiffs allege that it was only after Defendant Weaver had attempted to secure their property for another client and only after Tinley, as Executive Vice-President of Defendant Weaver, had advised Plaintiffs' counsel, that Defendant Weaver had spent entirely too much time, that the Plaintiffs with their entire project then in jeopardy, advised Defendant Weaver on December 6, 1963, that the Plaintiffs were placing their construction loan elsewhere. The Plaintiffs allege that with their entire project then in jeopardy, under the time limitation set by Defendant Manufacturers in their Letter of Commitment of June 7, 1963, the Plaintiffs were required to do all in their power and regardless of the expense involved to obtain a construction loan from another source in an attempt to avoid the heavy losses and damages with which they were faced.

'41. The Plaintiffs allege that in spite of the modifications to Defendant Weaver's original offer and contract agreed to by Plaintiffs in an effort to assist Defendant Weaver, Defendant Weaver did not secure a construction loan for the Plaintiffs by September 1, 1963, as they had promised and bargained to do, did not secure a construction loan for the Plaintiffs within a reasonable time thereafter, and in fact never did secure a construction loan for the Plaintiffs. The Plaintiffs allege that the failure of Defendant Weaver to secure a construction loan for the Plaintiffs as they had promised and bargained to do delayed the start and hence the completion of the Plaintiffs project by many months. The Plaintiffs allege that this failure on the part of Weaver to furnish the Plaintiffs a construction loan by September 1, 1963, and thereafter within a reasonable time, contributed to and set in motion those causes which caused the Plaintiffs their heavy losses and damage including the loss of their entire project.'

It thus will be seen that the declaration itself did not refer to the December 6 agreement. This agreement supplanted the earlier agreement.))

'COUNT 2 OF THE DECLARATION

'This count sounds in tort and is based upon two alleged tortious actions by Weaver.

'First, Plaintiff contends that Weaver failed to process the Plans and Specifications promptly, and thus committed a tort. I have already found for Defendant Weaver on this point.

'Second, Plaintiff alleges negligent and deceitful conduct on the part of Weaver in failing to button up Manufacturers' offer of a construction

mortgage loan, including Tinley's advice to Williams, when he accepted such offer, that it had been withdrawn. * * *

'COUNT 3 OF THE DECLARATION

'In this count Plaintiff contends that Manufacturers is responsible to it for breach of contract-Manufacturers' offer of June 7, 1963, and Plaintiff's acceptance of June 21, 1963. * * *

'COUNT 4 OF THE DECLARATION

'This is an action against Manufacturers in tort. It is based upon three contentions: (1) Alleged failure of Manufacturers to exercise good faith and alleged negligence in the processing and approval of plans and specifications. I have already rendered a verdict in favor of Manufacturers on this count. (2) Its alleged failure to exercise good faith in breaching the contract. (3) Alleged constructive fraud on its part in breaching the contract.

'COUNT 5 OF THE DECLARATION

'This is a contract action against Weaver to recover the $48,000 paid by Plaintiff to Weaver on May 11, 1964, as a finder's fee for obtaining the permanent mortgage loan commitment from Manufacturers. * * *

'COUNT 6 OF THE DECLARATION

'This is a tort action against Weaver and Manufacturers. It merely combines the allegations of Counts 2 and 4, and alleges that Defendants were joint tortfeasors. * * *'

St. Paul and Williams have summarized the request for damages and the actual award by the court as follows:

"St. Paul requested the following damages:

                 A.   Direct Damages--loss of
                        property                                     $7,920,000
                 B.   Special Damages--loss of
                        business
                        Value of Business               $7,265,000
                        Less Amount of
                          Mortgage                       4,800,000    2,465,000
                                                        ----------  -----------
                 C.   Consequential Damages--
                      1. Chemical Bank--Deficiency
                          Decree--2/27/67                1,297,952
                      2. Extension fee paid
                          Manufacturers 9/7/65              24,000
                      3. Fee paid Weaver
                          9/18/63 on their
                          loan of $480,000                   9,600
                      4. Interest on Weaver's
                          loan of $480,000
                          from 9/18/63 to
                          1/1/65; paid
                          5/1/64                            18,160
                      5. Merchants Mortgage
                          Co. fees and
                          legal expenses

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