Case Title: First State Bank of Wheatland v. American Nat. Bank

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1991-04-11T00:00:00Z

Document:
First State Bank of Wheatland v. American Nat. Bank1991 WY 45808 P.2d 804Case Number: 90-160Decided: 04/11/1991Supreme Court of Wyoming
FIRST STATE BANK OF 
WHEATLAND (formerly American Bank of Wheatland), and American National Bank of 
Laramie, 
Appellants (Plaintiffs),

v.

AMERICAN NATIONAL BANK 
(Cheyenne), and 
Does 1 to 5, inclusive, Appellees (Defendants).

Appeal from the District 
Court, LaramieCounty, Edward L. Grant, 
J.

Affirmed. 

John E. 
Stanfield of Smith, Stanfield & Scott, Laramie, and John B. Speight, 
Hathaway, Speight, Kunz, Trautwein & Barrett, Cheyenne, for 
appellants.

David H. 
Carmichael, Burgess, Davis, Carmichael & 
Cannon, Cheyenne, and Anthony T. Wendtland, 
Burgess, Davis, Carmichael & Cannon, 
Sheridan, for 
appellees.

Before THOMAS, 
CARDINE and GOLDEN, JJ., and RAPER and BROWN, JJ., 
Retired.

RAPER, Justice, 
Retired.

[¶1.]     Appellants sued 
appellee claiming dishonesty, misrepresentation, fraud, abuse of good faith and 
fair dealing in loan participation arrangements. The trial judge granted summary 
judgment to appellee.

[¶2.]     The appellants have 
created what they consider the issues in what appears to be an attempt to obtain 
our attention in a melodramatic way:

     1. Is dishonesty 
within the banking industry acceptable?

     2. Do banks have a 
right to be dishonest - so long as they only cheat or defraud other 
banks?

     3. In view of the Rule 
56 evidence demonstrating its many misrepresentations as well as the facts which 
the Cheyenne Bank unquestionably concealed - was its summary judgment proper in 
this case?

     4. Should the Cheyenne 
Bank be allowed to evade all responsibility for its actions through the ruse of 
comparing its own fraudulent conduct with conduct on the part of the Plaintiffs 
which, at most, was merely inadvertent or negligent?

     5. Despite the 
unlimited powers it supposedly reserved under the participation contract - a 
document it alone created and filled out - was the Cheyenne Bank nevertheless 
obligated to exercise good faith and deal fairly with the participants when 
exercising those powers?

[¶3.]     Appellee rephrases the 
issues claimed by appellants in a more conservative, judicious 
fashion:

     1. Was Appellee 
entitled to Summary Judgment on Appellants' claims of fraud because no genuine 
issue of material fact existed concerning the element of justifiable 
reliance?

     2. Was Appellee 
entitled to Summary Judgment on Appellants' claims of negligence because the 
element of "duty" was lacking?

     3. Was Appellee 
entitled to Summary Judgment on Appellants' claims of breach of fiduciary duty 
because no fiduciary duty existed as a matter of law?

     4. Was Appellee entitled to 
Summary Judgment on Appellants' claims that Appellee did not act in good faith 
or that Appellee committed the tort of "outrage"?

[¶4.]     We will affirm the 
district court.

[¶5.]     The facts are somewhat 
simple and lack the sinister view taken by appellants. Appellee loaned $800,000 
to a Shirley L. Brown and then took from each of eight banks, including 
appellants, a certificate of participation in the sum of $100,000. Each 
participant, including appellants, signed and accepted a certificate of 
participation containing the following language:

Forwarding Bank [American 
National Bank, Cheyenne], by issuing this certificate, makes no representation 
of warranty as to the collectibility of the loan or the validity of any lien, 
collateral or instrument taken in connection therewith, nor with respect to any 
representations, warranties, or statements made by said borrower. (Bracketed 
material supplied.)

[¶6.]     Appellee loaned an 
additional $600,000 to Shirley Brown several months later. Interest was paid 
currently on both promissory notes and both were renewed with a due date in 
November 1985. In November, the $800,000 loan and the $600,000 were combined 
into one loan totaling $1.4 million. Additional security was taken. Appellants 
participated and the same form of certificate of participation was executed by 
each of appellants and each contained the same language quoted above. 

[¶7.]     Appellants' officers, 
signatory to the certificates, admitted that bankers of reasonable and ordinary 
care would read loan documents, such as the certificates they executed, before 
signing them. Appellants' expert witnesses testified in their depositions that 
bankers, being sophisticated business persons, are charged with a duty to 
carefully read loan documents and that participant banks have an affirmative and 
independent duty to conduct credit analysis of any loan they consider 
participating in. Appellee furnished all financial information provided by 
Shirley Brown to appellants and it is acknowledged by appellants that they 
received such information prior to their execution of the $1.4 million loan 
certificate of participation.

[¶8.]     Shirley L. Brown 
defaulted on the $1.4 million loan.

[¶9.]     Appellee calls our 
attention to TZ Land & Cattle Co. v. Condict, 795 P.2d 1204, 1208 (Wyo. 
1990) (quoting Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 
(Wyo. 1987)) wherein is set out our standard of review of a summary 
judgment:

     "A motion for summary 
judgment places an initial burden on the movant to make a prima facie showing 
that no genuine issue of material fact exists and that summary judgment should 
be granted as a matter of law. Rule 56(c), Wyoming Rules of Civil Procedure. Once a prima 
facie showing is made, the burden shifts to the party opposing the motion to 
present specific facts showing that a genuine issue of material fact does exist. 
England v. Simmons, Wyo., 728 P.2d 1137, 1140-1141 (1986). We 
analyze challenges to a grant of summary judgment by reviewing the record in a 
light most favorable to the party opposing the motion giving him all favorable 
inferences that can be drawn from the facts. Id. Conclusory statements or mere 
opinions are insufficient, however, to satisfy an opposing party's burden. Jones 
Land & Livestock Co. v. Federal Land Bank of Omaha, Wyo., 733 P.2d 258, 263 
(1987)."

     Evidence opposing a 
summary judgment that is conclusory or speculative is insufficient to 
demonstrate that a material fact exists, and the trial court has no duty to 
anticipate possible proof. Nelson v. Crimson Enterprises, Inc., 777 P.2d 73 
(Wyo. 
1989).

[¶10.]  Appellants attempt to parlay unfavorable 
facts into what facts they would like them to be. In this case, that would be a 
gigantic jump only possible through a purely speculative process which we do not 
accept.

[¶11.]  It is obvious that appellants did not 
read the unambiguous language of the participation certificate or, if they did, 
paid it no attention. This court does not reward such neglect. A person signing 
a contract cannot avoid it on the ground that he did not read it. Sturman v. 
First National Bank, 729 P.2d 667 (Wyo. 1986). One who signs a contract generally 
cannot avoid it on the ground that he did not attend to its terms, or did not 
read it, or that he took someone's word as to what it contained. Laird v. Laird, 
597 P.2d 463 (Wyo. 1979).

[¶12.]  But that is not all. Appellants are banks 
that now attempt to make something evil out of participation agreements. 
Appellants are national banks administered primarily by the Comptroller of 
Currency who publishes policy guidelines covering loan participation. A 
participation occurs when a bank makes a loan and then sells it entirely or in 
part to another bank. As revised in 1984, in Section 60,799 of the OCC 
Guidelines, it is set out that the purchase and sale of loans and participation 
in loans are established banking practices but the associated risk must be 
controlled. It is provided in such Guideline that to make a prudent credit 
decision, a purchaser must conduct an independent credit analysis to satisfy 
itself that a loan participation is a credit which it would make directly. The 
acceptance by a purchaser of a favorable analysis of loan issued by the seller 
does not satisfy the need to conduct an independent credit analysis. There is no 
evidence that such independent analysis was made by appellants. 

[¶13.]  The appellants can only blame themselves 
for any loss they may have incurred in failure to read the clear terms of the 
participation certificate and it appears they also failed to read the OCC 
Guidelines. They were plainly steered by imprudent bankers as herein 
defined.

[¶14.]  This was an ideal case for the district 
court to grant summary judgment to the appellee.

[¶15.]  Affirmed.