Opinion ID: 2089115
Heading Depth: 1
Heading Rank: 5

Heading: Negligent Breach of Contract.

Text: In an attempt to shift the blame for the failure to complete the project and for breaches, Monona asserts Associates breached the commitment and building-loan agreement because it did not pay the interest, taxes, and loan fees on behalf of Monona. The trial court correctly answered this argument when it pointed out that the commitment and building-loan agreement specifically relieved Associates of any obligation to pay interest, insurance, taxes, and loan fees when it appeared that the undisbursed funds were not sufficient to complete the project. At the time the interest and taxes were due, Monona was hopelessly short of sufficient funds to complete the project either from the loan or any other source. The estimate at this time was it would take $750,000 more to complete the project. Whether this was because of incorrect estimates of Monona, the failure to secure construction bids, or increased prices and unseen costs is not apparent, but in any event it was Monona's responsibility to have sufficient funds by loan or otherwise to completely build the project. It is quite true that at the time AIC's renewal fee was due, Associates had sufficient funds to pay it; and there is some testimony that it goofed or was negligent in not paying it. But the fact remains that under the agreement Associates was not required to pay it as long as Monona had not made available sufficient funds over and above the borrowed funds to complete the project. Even the AIC funds would have been only of a temporary help and postponed the day of reckoning. The failure of this project was inherent in the building scheme and financing conceived by Monona. It is difficult enough to pull oneself up by his boot straps, but by hindsight this record does not disclose there was even a strap on the boot. Monona argues Associates failed to give it notice of defaults required by the mortgage and by Haase v. Blank (1922), 177 Wis. 17, 187 N. W. 669, on equitable grounds. The purpose of the notice of default is to give the mortgagor a reasonable chance to cure it and avoid a foreclosure. Here, Monona was fully aware of its defaults and the immediate need for money. It had knowledge as early as September, 1965, that its original financing was not sufficient. We consider the failure to give a formal notice of default before bringing this action six months later to be harmless and Monona's argument to be without merit.