COURT OF APPEALS DECISION DATED AND RELEASED January 25, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 93-3441
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT IV
FRANK MUSA,
Plaintiff-Appellant,
v.
JEFFERSON COUNTY BANK,
and
JAMES V. BUELOW,
Defendants-Respondents.
APPEAL from a judgment
of the circuit court for Jefferson County:
ROBERT G. MAWDSLEY, Judge. Reversed
and cause remanded.
Before Gartzke, P.J.,
Sundby and Vergeront, JJ.
PER
CURIAM. Frank Musa appeals from a summary judgment dismissing
his complaint against Jefferson County Bank and its former officer, James V.
Buelow. The dispute arose over a loan
secured by Musa's hotel and restaurant, which the bank ultimately obtained by
foreclosure. Musa contends that the
facts submitted on summary judgment reasonably allow an inference that the bank
and Buelow engaged in bad faith dealing, and tortiously interfered with his
attempts to sell the property before the sheriff's sale. We agree.
We therefore reverse and remand for a trial.
In 1982, Musa bought the
Jefferson House, a hotel and restaurant in Jefferson. He subsequently borrowed $167,000 from the bank for
remodeling. In the loan contract Musa
agreed "[n]ot to sell, assign, lease, mortgage, convey or otherwise
transfer any legal or equitable interest in all or part of the Property, or
permit the same to occur without the prior written consent of Lender...."
In 1984, Musa received
an offer to purchase the property for $428,000, from Tzelal Aliu. When Aliu called the bank for an appointment
to discuss the sale, Buelow told him that the bank could not help him because
he was new and the bank did not know him.
Aliu knew that he needed the bank's approval, as well as possible
additional financing. Buelow's remarks
caused him to withdraw his offer.
In 1985, Raif Islami
offered to purchase the property for $450,000.
He then contacted the bank and asked for an opportunity to discuss his
offer. According to Islami, a loan
officer told him "[y]ou are the third person who [is] calling [in] regard
[to] that, and we [are] not interested to deal with [you]," and abruptly
hung up without identifying himself.
Islami withdrew his offer as a result of that conversation.
Musa defaulted on his
loan payments and the court appointed a receiver in May 1986. Also in May, Musa arranged to sell the
Jefferson House at auction in September 1986.
Buelow had friends and
distant relatives, Thomas and Connie Barbian, with experience in the restaurant
business. On a July 1986 visit to them
in Pennsylvania, he informed them that the Jefferson House was for sale. For the next several weeks, Buelow
persistently called Musa's attorney, Dale McKenna, sometimes as often as three
times per day, regarding the Barbians' interest in the property. In late August, Thomas Barbian traveled from
Philadelphia to inspect the premises, which he did along with Buelow. As a result of these contacts and at
Buelow's request, Musa cancelled the scheduled auction.
Shortly afterwards, the
Barbians stated their intention to wait for the sheriff's sale. In November, Musa received an offer to
purchase from two other individuals, contingent upon their leasing the premises
for six months to establish their credit and reputation. They ultimately withdrew the offer because
of a delay in receiving a liquor license.
During the city council's proceedings on the matter, the bank actively
opposed their application for the license.
In the meantime, the
bank's foreclosure action on the property proceeded to its conclusion and the
property was sold to the bank for $162,000, at a sheriff's sale in December
1987. Musa subsequently commenced this action,
alleging numerous claims. On appeal, he
argues that the trial court erred by granting summary judgment on his claims
that the bank and Buelow breached their contractual duty to exercise good
faith, and that they tortiously interfered with his contracts with prospective
purchasers and with his auctioneer.
Summary judgment is not
appropriate if the evidence admits of two reasonable and conflicting
inferences. Wagner v. Dissing,
141 Wis.2d 931, 940, 416 N.W.2d 655, 658 (Ct. App. 1987). We decide such questions in the same manner
as the trial court and without deference to its decision. Schaller v. Marine Nat'l Bank,
131 Wis.2d 389, 394, 388 N.W.2d 645, 648 (Ct. App. 1986).
"Every contract
implies good faith and fair dealing between the parties and a duty of
cooperation on the part of both parties.
The law implies a promise against arbitrary or unreasonable
conduct." Wis J I—Civil 3044 (1993). Good faith requires decency, fairness or reasonableness in
performing a contract. Schaller,
131 Wis.2d at 402-03, 388 N.W.2d at 651.
Here, two prospective purchasers of Jefferson House testified that they
were immediately and rudely rebuffed when they sought the bank's approval of
their offers. Additionally, the bank
actively opposed the liquor licensing efforts of two other potential purchasers,
knowing that the license was a precondition to a successful offer, and that the
receiver appointed on their motion favored the license. In direct contrast was Buelow's attitude and
efforts on behalf of his friends, the Barbians. Although the bank and Buelow offered evidence that their actions
were consistent with their good faith obligation, the credibility and weight
afforded to that evidence is an issue for the trier of fact. Fehring v. Republic Ins. Co.,
118 Wis.2d 299, 305-06, 347 N.W.2d 595, 598 (1984). If Musa's evidence is deemed more credible and given more weight,
it could reasonably allow an inference of bad faith on the defendants'
part.
For similar reasons,
Musa's claim of tortious interference with his contracts must also go to trial. Musa's evidence shows that the bank or
Buelow, by deliberate acts, may have played a substantial part in discouraging
three offers to purchase the property, and in cancelling the auction of
September 1986, in order to exploit Musa's financial problems for either the
bank's or the Barbians' benefit.
"One who intentionally and improperly interferes with the
performance of a contract ... between another and a third person by
inducing or otherwise causing the third person not to perform the contract, is
subject to liability" for the other's damages. Restatement (Second) of
Torts § 766 (1979). Musa's
evidence, if believed, allows the reasonable inference that the defendants
violated this standard.
By the Court.—Judgment
reversed and cause remanded.
This
opinion will not be published. See
Rule 809.23(1)(b)5, Stats.