Opinion ID: 987954
Heading Depth: 2
Heading Rank: 4

Heading: The Westburgs' Direct Counterclaim

Text: ¶92 Park Bank asserts it had the right to freeze the Westburgs' money-market account under the continuing guaranty; the Westburgs allege Park Bank did not have that right. Both the claim and the defense are founded on the guaranty contract signed by the Westburgs on January 28, 2005. ¶93 Park Bank's rights under the guaranty contract are very broad. First, the guaranty gives particularized notice to the Westburgs that it is a continuing guaranty that includes debt in existence on January 28, 2005, when the guaranty was signed, as well as debt that accrues subsequently. The guaranty provides: You are being asked to guarantee the past, present and future Obligations of Debtor. If Debtor does not pay, you will have to. You may also have to pay collection costs. Lender can collect the Obligations from you without first trying to collect from Debtor or another guarantor. 14 Majority op., ¶3. 11 No. 2010AP3158.pdr Second, the guaranty specifically granted Park Bank rights in regard to the personal money-market account that was frozen from August 30, 2006 to September 7, 2006. In this regard, the guaranty provides: Guarantor grants to Lender a security interest and lien in any deposit account Guarantor may at any time have with Lender. Lender may, at any time after the occurrence of an event of default and notice and opportunity to cure, if required by § 425.105, Wis. Stats.,15 set-off any amount unpaid on the Obligations against any deposit balances Guarantor may at any time have with Lender, or other money now or hereafter owed Guarantor by Lender. . . . This Guaranty is valid and enforceable against Guarantor even though any Obligation is invalid or unenforceable against any Debtor. ¶94 Third, it appears that Park Bank could have taken the entire money-market account if Zaddo, Inc. or Zaddo Holdings were in default of their obligations under the loan documents, rather than simply preventing access to the account as was done from August 30, 2006 until September 7, 2006. However, on the 15 Wisconsin Stat. § 425.105 addresses a merchant's obligation to give notice of default and a right to cure to consumers in consumer credit transactions. The Westburgs do not argue to us that Park Bank is a merchant in regard to the continuing guaranty, that the guaranty involved a consumer credit transaction, or that notice of default is required under law. Accordingly, I do not address § 425.105 further. 12 No. 2010AP3158.pdr documents presented in this review, it is not possible for me to determine whether a default existed on August 30, 2006.16 ¶95 It also is not possible to determine what damages the Westburgs sustained during the period of time when they did not have access to their personal account, as they do not particularize the damages that they allege arose from Park Bank's freezing their account for this period of time. Rather, all of the damages they list on the document entitled Defendant's Counterclaimed Damages rest upon an underlying injury to the corporation. See Appendix of AppellantsPetitioners, pp. 101-02. Those damages are derivative of the corporations' injuries and may not be brought here, as I have explained above. ¶96 Because the Westburgs identify no damages that resulted from the temporary freeze of their personal account, I agree with the majority opinion that without a particularized statement of those damages, the Westburgs have not made a 16 The majority opinion is unclear when it says that Park Bank made the required showing for summary judgment, and then links that statement to: The Westburgs do not challenge that Zaddo became the subject of an insolvency proceeding when it petitioned for a receivership. Majority op., ¶65. First, the receivership is the insolvency proceeding. Second, the Westburgs do point out that the receivership was filed on September 7, 2006, but their personal account was frozen no later than August 30, 2006. Therefore, in regard to the freezing of their money-market account based on the allegation that Zaddo, Inc. was in default, the Westburgs do allege Zaddo was not in an insolvency proceeding when Park Bank froze their personal account. Accordingly, payment of the obligations that the Westburgs guaranteed could not be based on Zaddo's filing an insolvency proceeding, which filing would have been a default causing the guaranty to be available to Park Bank. 13 No. 2010AP3158.pdr showing sufficient to overturn summary judgment dismissing the Westburgs' direct counterclaim.17