Opinion ID: 384735
Heading Depth: 2
Heading Rank: 3

Heading: Count III of Amended and Supplemental Complaint

Text: 30 In Count III, the Bank, again in its own right and as assignee of the Trust, is seeking actual damages according to proof and punitive damages of $3,000,000 based on Steel's alleged breach of its obligations as a co-loan participant to the other participants. Steel's objection to this Count is that it had no legal relationship to the Bank or Trust and therefore no legal obligations to them. Judge Steckler refused to grant summary judgment for Steel on the ground that if plaintiffs can substantially substantiate their third-party claim, a contractual relationship giving rise to the duty to act in good faith toward each other would exist (Steel App. 11). Since Steel concedes the district court's point (Br. 59), its argument here must be taken as an extension of the argument we rejected with respect to Count I, namely, that the Bank and Trust are as a matter of law not third-party beneficiaries of the agreement between the Mortgage Company and Steel. 31 The bank further argues in support of the district court's ruling that the three participants became real estate developers when the Mortgage Company acquired title to the Cromwell project in settlement with the borrower. Steel's dilatoriness in 1976, 1977 and 1978 is relied upon to show that the Bank and Trust sustained damages equal to 60% of the difference between the project's April 1978 value and the value it would have had if the Mortgage Company had been able to implement its proposals to move forward with and/or dispose of the project (Steel App. 99). Indiana law has long recognized the duty of a party engaged in a common enterprise to act in the utmost good faith toward its co-venturers. Grover v. Marott, 192 Ind. 552, 136 N.E. 81, 85 (1922). For this reason and that stated by Judge Steckler, the district court properly denied Steel's motion for partial summary judgment with respect to Count III. 32 Accordingly, we affirm the district court's order of March 20 in its entirety. 7 Our ruling does not mean, of course, that Steel may not prevail on any or all of the three Counts after trial. 33