Opinion
No. 145.
Argued November 26, 1973. —
Decided December 21, 1973.
APPEAL from a judgment of the circuit court for Milwaukee county: ROBERT C. CANNON, Circuit Judge. Affirmed.
For the appellant there was a brief by Pfannerstill, Camp Tyson of Wauwatosa, and oral argument by Mark M. Camp.
For the respondent there was a brief and oral argument by Edward S. Grodin of Milwaukee.
A motion for summary judgment by the defendant was granted by the trial court and a judgment was entered dismissing the complaint.
This is an action by the plaintiff-appellant, Durand West, Inc., to recover damages from the defendant-respondent, Milwaukee Western Bank, for its failure or refusal to disburse progress payments under a written construction payment agreement between the parties.
The complaint, in substance, alleges the following: On December 1, 1965, the parties entered into a written construction payment agreement. The agreement provided that the defendant bank would loan the plaintiff Durand the sum of $800,000 at six percent per annum on Durand's note secured by a mortgage on the land Durand owned upon which the buildings were to be constructed. The progress payments were to be made periodically by the bank for labor and materials. In reliance on the agreement, the plaintiff arranged to have the construction of the building begin. Between January and May of the year 1966, the plaintiff incurred building construction obligations in the amount of $175,000. The plaintiff requested the bank make payments to cover these construction costs from the proceeds of the loan but the bank neglected and refused to do so. Because of nonpayment the contractors and materialmen ceased any further construction, filed mechanics' liens and commenced lien foreclosure actions. By reason of cessation of the work, the buildings under construction have fallen into disrepair and suffered deterioration from the elements. The plaintiff was compelled to sell its land and partially completed buildings to minimize damages and avoid the lien foreclosure actions and retain its advantage of an end loan commitment, all to its damage of $231,600.
The defendant, by answer, generally denied the allegations of the complaint and set forth an affirmative defense of a general release given by the plaintiff to the defendant.
The defendant bank moved for summary judgment and filed affidavits in support thereof. One was by an officer of the bank setting forth the general release and an agreement executed November 14, 1966, whereby the plaintiff Durand sold or exchanged its land to two third-party individuals, Sam Pump and Jack Goldman. The other affidavit in behalf of the bank was filed by its attorney. It consisted of excerpts from the adverse pretrial depositions of Lawrence Gardner and Peter M. Pumpian, who were the principal officers and directors of the plaintiff Durand West, Inc. Mr. Gardner and Mr. Pumpian were also experienced, competent practicing lawyers, with considerable experience in real estate and financing problems. Both Mr. Pumpian and Mr. Gardner signed the general release on behalf of Durand and individually. The affidavits described the conditions under which the general release was given.
The depositions were taken in a prior action raising the identical issues but dismissed for want of prosecution.
An affidavit by Mr. Pumpian was also filed by the plaintiff in opposition to the defendant's motion. It alleges there was no consideration for the release and that it was obtained by economic duress.
The trial court, from the affidavits, concluded there was adequate consideration and no duress and granted the motion for summary judgment. The plaintiff, Durand West, Inc., appeals.
Was it error to grant the defendant bank's motion for summary judgment?
We repeat our statement appearing in Marshall v. Miles (1972), 54 Wis.2d 155, 160, 161, 194 N.W.2d 630:
"The rules relating to the use of summary-judgment procedure are well established and they have been set forth and explained by this court many times.
"Summary judgment is a drastic remedy that should not be granted where material evidentiary facts are in dispute, or, where reasonable inferences can be drawn from undisputed facts that would lead to alternative and opposite results. Hardscrabble Ski Area v. First Nat. Bank (1969), 42 Wis.2d 334, 166 N.W.2d 191; Balcom v. Royal Ins. Co. (1968), 40 Wis.2d 351, 161 N.W.2d 918; Schandelmeier v. Brown (1968), 37 Wis.2d 656, 155 N.W.2d 659. The summary-judgment procedure initially requires an examination of the pleadings to determine whether a cause of action has been stated and whether material issues of fact are presented. Younger v. Rosenow Paper Supply Co. (1971), 51 Wis.2d 619, 188 N.W.2d 507. However, the allegations of the pleadings may not be considered as evidence or other proof on a disposition of the motion. Milwaukee County v. Schmidt (1968), 38 Wis.2d 131, 156 N.W.2d 493; McCluskey v. Thranow (1966), 31 Wis.2d 245, 142 N.W.2d 787. Assuming a cause of action and the existence of factual issues, an examination is then made of the moving party's (defendant's) affidavits and other proof to determine whether a prima facie defense has been established. Cirillo v. Milwaukee (1967), 34 Wis.2d 705, 150 N.W.2d 460. If the moving party has made a prima facie case for summary judgment, an examination is then made of the opposing party's (plaintiff's) affidavit and other proof to determine whether there exists disputed material facts, or undisputed material facts from which reasonable alternative inferences may be drawn, sufficient to entitle the opposing party to a trial. Skyline Construction, Inc. v. Sentry Realty, Inc. (1966), 31 Wis.2d 1, 141 N.W.2d 909. The summary-judgment procedure is not a trial on affidavits. Jahns v. Milwaukee Mut. Ins. Co. (1968), 37 Wis.2d 524, 530, 155 N.W.2d 674:
"`. . . A party opposing summary judgment defeats the motion if he shows by affidavits, or other proof, that there are substantial issues of fact or reasonable inferences which can be drawn from the evidence. The court does not try the issues but decides on summary judgment whether there is a substantial issue to be tried. . . .'"
In support of its argument that the motion for summary judgment should not have been granted, the plaintiff-appellant contends it appears from the face of the general release that it was given without consideration and that the uncontroverted affidavit of the plaintiff establishes there was no consideration for the general release and that it was given under economic duress.
The affidavits of the defendant set forth the agreement between Durand and Pump and Goldman. In general, the agreement provided that Durand was to convey all its interest in the land and partially constructed buildings to Pump and Goldman, subject to the obligations which consisted of an estimated $10,000 due on the bank mortgage, the mechanics' liens, and some commitment fees and charges on the end loan agreement. In turn, Pump and Goldman were to transfer title to some lands they owned, subject to mortgages, to Quality Realty Corporation on behalf of Durand. This agreement was conditioned upon Pump and Goldman obtaining interim financing.
The general release was executed November 14, 1966. It provided it was in consideration of one dollar and other good and valuable consideration and contained the following:
". . . release and discharge Milwaukee Western Bank, a Wisconsin Banking Corporation, of and from all manner of actions and causes of actions, judgments, executions, debts, dues, claims, (including but not limited to any transaction and/or thing in relation to a mortgage executed by Durand West, Inc., on December 1, 1965, in favor of Milwaukee Western Bank, said mortgage having been recorded in Racine County, Wisconsin, on December 30, 1965, as Document No. 800272), and demands of every kind and nature whatsoever, which against said Bank they ever had or now have or which they or its (as the case may be) heirs, executors, administrators and/or assigns have now or may hereafter have by reason of the aforedescribed paragraph."
The depositions of Pumpian and Gardner reveal they were both experienced attorneys, officers and directors of Durand, that they read and signed the release on their own behalf and for Durand, and that it was done at the request of Pump and Goldman. These affidavits of the defendant set forth a valid defense in the form of a general release and constitute a prima facie defense to the action.
We do not believe the affidavit of Pumpian sets forth any material facts sufficient to warrant a trial on disputed facts nor to overcome the prima facie legal defense.
It is apparent that Pump and Goldman, in order to get the bank to satisfy the Durand mortgage and obtain a like interim financing mortgage for themselves, had to prevail upon Durand and Pumpian and Gardner to give the bank the general release. The consideration that flows to Durand was a satisfaction of its obligations and a transfer of interests in lands from Pump and Goldman. In addition thereto, the release given by Durand to the bank was a benefit to Pump and Goldman in that they were able to obtain interim financing necessary to go ahead with the project.
There was, therefore, adequate consideration for the release. Not only did Durand, Pumpian and Gardner benefit from the entire transaction, but third persons, Pump and Goldman, were also benefited.
"Generally speaking, if consideration is sufficient for a contract in other respects, it does not matter from or to whom it moves. The consideration may move to the promisor or a third person, and may be given by the promissee or a third person. . . ." 17 Am. Jur. 2d, Contracts, p. 437, sec. 94.
The affidavit of Pumpian in opposition to defendant's motion states that because of the financial inferiority of Durand as compared to the defendant bank, the general release was given without consideration with the hope that the bank would release its mortgage so that Durand could salvage its investment and reduce its losses.
We have held above that there was adequate consideration to support the release. We further conclude that the affidavit of Pumpian for Durand does not set forth facts sufficient to constitute a defense of economic duress. The release is regular and unambiguous on its face; there is no allegation of fraud or misrepresentation nor physical duress. It was executed by competent attorneys who were also sophisticated in real estate transfers, development and financing. In the affidavit in support of the motion, Mr. Pumpian's testimony at an adverse deposition is quoted as follows:
See Minneapolis, St. P. S. S. M. R. Co. v. Railroad Comm. (1924), 183 Wis. 47, 197 N.W. 352.
"The fact as I know it is Mr. Pump and Mr. Goldman requested the release from us and we gave it to them and we requested that they secure for us a satisfaction of mortgage and a delivery of all of our, return of all of our documents that we executed with the bank."
These facts fall short of raising a substantial factual question of economic duress.
The trial court concluded that the affidavits establish there was adequate consideration for the release and that they were voluntarily and freely given without duress and that there were no substantial issues of fact to be tried. We agree.
By the Court. — Judgment affirmed.