AnchorBank, FSB v. Resolute/Step LLC et al

Filing 31

ORDER granting 19 Motion for Summary Judgment against defts. jointly and severally in the amount of $1,423,227.68 plus interest at a rate of $149.81 per day. Signed by Chief Judge Barbara B Crabb on 2/27/2009. (llj)

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IN THE UNITED STATES DISTRICT COURT FO R THE WESTERN DISTRICT OF WISCONSIN --------------------------------------------A N C H O R BANK, FSB, O P IN IO N and ORDER P l a i n t i ff , 0 8 - cv -4 2 0 - b b c v. R ESO LU TE /ST EP LLC, and RESOLUTE SOLUTIONS CORPORATION, Defendants. --------------------------------------------In this civil case brought pursuant to state law, plaintiff Anchor Bank, FSB alleges that defendants Resolute/Step LLC and Resolute Solutions Corporation defaulted under a busin ess note. Now before the court is plaintiff's motion for summary judgment on liability an d damages. Plaintiff has adduced facts that it is a citizen of Wisconsin, that defendants R e so lu te/S tep LLC and Resolute Solutions Corporation are citizens of Delaware and W ash in gto n and that the amount in controversy exceeds $75,000. Therefore, jurisdiction is present pursuant to 28 U.S.C. 1332. Defendants concede liability and agree that they owe the principal, interest, late charges and fees and costs related to collection efforts. The parties' only dispute is what 1 interest rate should be used. As defendants have pointed out and plaintiff has ackn ow ledged, the note does not support the 14% interest rate plaintiff initially used to calculate its damages. Section 2 of the note sets forth how interest is to be calculated. It con tains three options, (a), (b) or (c) and states that "only one [of the options] shall apply." T he parties checked box (a), which sets interest at a fixed rate of 10%. Under section 2, a different interest rate applies to "unpaid principal and interest." That rate is "the rate which w o u ld otherwise be applicable under 2(b) above plus 4 percentage points." There is no box checked in 2(b) and no stated rates set forth in 2(b). A plain reading of this language would require that the interest rate be calculated at 4 % . Plaintiff acknowledges this, but asks the court to set the rate at 10%, the rate defendant w as paying before default, because it would not be reasonable to allow defendant a reduction in interest upon default. Unreasonable or not, it was the agreement made by the parties. Plaintiff states that "it appears that [plaintiff] may have committed a scrivener's error with r e s p ect to the applicable default interest rate." However, the fact that plaintiff made a m istake when drafting the contract is not enough to warrant reforming the language of a contract. Reformation in this setting is warranted only if there has been "mutual mistake of the parties" in that both parties "intended to make a different instrument" and "agreed on facts different than those set forth in the instrument." Newmister v. Carmichael, 29 Wis. 2d 573, 577, 139 N.W.2d 572, 574 (1966). One party's mistake is not enough. 2 Plaintiff's motion for summary judgment will be granted, but using the 4% interest r a te to calculate plaintiff's damages because the note sets the default interest rate at 4%. A cco rd in g to plaintiff's calculations, which defendants do not dispute, the total due using th e 4% interest rate is $1,423,227.68, with interest continuing to accrue at a rate of $149.81 a day. ORDER IT IS ORDERED that plaintiff Anchorbank, FSB's motion for summary judgment, d kt. #19, is GRANTED. Defendants Resolute/Step LLC and Resolute Solutions C o rp o ratio n , jointly and severally, are to pay plaintiff Anchorbank, FSB the amount of $1 ,42 3,2 27 .68 , plus interest accruing at a rate of $149.81 a day. The clerk is directed to enter judgment in conformance with this order and close this case. Entered this 27t h day of February, 2009. B Y THE COURT: /s/ _ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ B AR B AR A B. CRABB D istrict Judge 3