Strombeck Partnership v. Apollo
| Citation | 198 Wis.2d 389,542 N.W.2d 238 |
| Decision Date | 15 November 1995 |
| Docket Number | No. 95-0488,95-0488 |
| Court | Court of Appeals of Wisconsin |
| Parties | NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. STROMBECK PARTNERSHIP, Plaintiff-Respondent, v. Joseph P. APOLLO and Rosemary J. Apollo, Defendants-Appellants, John Maglio, Defendant. |
APPEAL from a judgment of the circuit court for Waukesha County: ROBERT G. MAWDSLEY, Judge. Affirmed.
Before ANDERSON, P.J., BROWN and SNYDER, JJ.
Joseph P. and Rosemary J. Apollo appeal from an order of summary judgment in favor of the Strombeck Partnership. The Apollos argue that the trial court erred when it interpreted the Apollos' failure to pay late payment charges as an event triggering default under the mortgage note. They also seem to assert that either the doctrine of "clean hands" or equitable estoppel, or both, prevent the Strombecks from foreclosing because the Strombecks failed to turn over security deposits assigned as part of the real estate transaction.
We conclude that the mortgage and note unambiguously mandated that the Apollos pay a late charge in the event of an installment overdue by more than five days and that such late charge had to be paid along with the installment within fifteen days of the due date. Failure to include the late charge along with the installment constituted default. We further conclude that because no cause and effect relationship existed or could exist between the failure to pay late charges and the alleged failure of the Strombecks to turn over security deposits, the Apollos' equitable arguments fail. We affirm.
In November 1993, the Apollos offered to purchase commercial real property from the Strombecks. Their offer was accepted. As part of the deal, the Apollos gave a mortgage to the Strombecks in the amount of $91,700. The parties executed a note on December 28, 1993.
The first monthly installment was due on January 28, 1994. Although there is a dispute as to whether payment was made within fifteen days of the due date, it is undisputed that the Apollos failed to make the installment payment within five days of the due date. This triggered a late payment charge of five percent of the unpaid installment under the terms of the mortgage note, which charge was never paid.
The second installment was due on February 28, 1994, but was delivered on March 10, 1994, again triggering the late payment charge. Once again, the Apollos did not pay the late payment charge.
The Strombecks notified the Apollos in writing on March 7 that payments due under the mortgage note had not been received. On March 24, the Strombecks notified the Apollos that because they had not paid either of the late payment charges (and also because of the disputed late installment payment), they were accelerating the note and that the full amount was due.
In considering the propriety of an order for summary judgment, this court uses the same methodology as the trial court and our review is de novo. See Preloznik v. City of Madison, 113 Wis.2d 112, 115-16, 334 N.W.2d 580, 582-83 (Ct.App.1983). We first consider the Apollos' contention that failure to pay late payment charges is not an event triggering default under the terms of the mortgage and mortgage note.
Two provisions of the mortgage note are pertinent. The first concerns late payment charges:
In the event any installment payment (including, without limitation, the entire principal balance upon maturity) becomes more than 5 days past due, Borrower shall pay a late payment charge to Holder equal to 5% of the entire unpaid amount of the installment (including principal and interest).
The second provision permits acceleration:
If Borrower fails to make any payment due under this Note or the Mortgage within 15 days after it becomes due, or upon any default (other than non-payment) under the Mortgage securing this Note which is not cured within 15 days following the date of mailing of written notice to Borrower, the Holder may accelerate the entire principal balance of this Note and declare the same immediately due and payable without notice or demand.
The Apollos contend that under these provisions, the late payment charge is not a "payment" and that the nonpayment of that charge cannot therefore justify acceleration. They argue that the mortgage note is ambiguous in that it seems to distinguish between "payments" and "charges." Implicit in the definition of a payment, they contend, is a requirement that it have a fixed due date in order to measure when default occurs. Since the note does not identify a date when the late payment charge becomes due, it is not a payment and cannot trigger default.
We agree with the Strombecks, however, that the language of the note is clear and unambiguous. The late charge is a "payment" and became due along with the installment payment as soon as the installment payment was not made within five days of its due date.
We arrive at this conclusion after having examined the mortgage and note in a manner consistent with our standard of review. In interpreting contractual language, the goal is to ascertain the parties' true intentions, as evidenced by the language they used. Where the language is clear and unambiguous, we construe it as it stands. Whether language is ambiguous is a question of law which we review de novo. See Bank of Barron v. Gieseke, 169 Wis.2d 437, 455, 485 N.W.2d 426, 432 (Ct.App.1992). Mortgages and mortgage notes are to be read together as one instrument. Goebel v. First Fed....
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