Court Opinion

ID: 9714585
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:40:45.837795+00
Date Added: 2024-06-11T18:23:26.735145
License: Public Domain

JUSTICE WOLFSON, concurring in part and dissenting in part: I agree that the trial court correctly dismissed the counts for intentional interference with contractual relations and common law fraud. I also believe the trial court erred when it refused to admit three letters NCC officials wrote to Focus after the notice of default. That error cannot be easily dismissed. I respectfully dissent from that part of the majority opinion that affirms the trial court’s judgment on the breach of contract claim. It was Israel’s theory at trial that Focus intentionally sabotaged the project for reasons having nothing to do with his financial position. Israel contended at trial and in this appeal that the delays in funding draw requests four and five and the refusal to fund draw request six were wilful breaches of the contract by Focus and NCC. In the three letters that were excluded, NCC, after the first notice of default, told Focus it was unable to determine whether a material adverse change of position in Israel’s financial position had occurred. Further, NCC said that even if a material adverse change had occurred, it could not agree to Focus’ declaration of default. NCC described the declaration of default as a "precipitous action.” In one of the letters, NCC said it should resume funding the loan. These letters, then, went directly to the issue of whether the claim of adverse material change in position was a subterfuge, a phony excuse to stop the funding. Without the letters, the plaintiff’s theory collapsed for lack of a foundation. I do not say we should second-guess the trial judge’s factual determination of the issue of adverse material change in position. I do say we should protect a litigant’s right to have relevant and important evidence considered by the trier of fact. I do not see how we can say "the record is devoid of any evidence that the exclusion of letters was prejudicial to Israel.” NCC was a post-litigation convert to Focus’ stated reason for refusing to fund the project. The letters indicate NCC did not seriously believe there was an adverse material change in Israel’s position. NCC should be bound by Focus’ conduct, as well as its own. This was a joint enterprise between NCC and Focus. Their participation agreement expressly said that Focus was to act as "servicing agent” for the loan. At trial, the judge said: "Well he [counsel for NCC] concedes that for the purpose of disbursing the loan, he agrees that Focus represented, in fact, NCC.” That was an accurate statement by the trial court. In its brief in this court, NCC refers to the agency question as a "non-issue.” The majority finds the record does not support Israel’s argument that the trial court’s determination of nonagency prejudiced or unduly affected the outcome of the trial. The agency issue ought to be taken more seriously. If NCC is bound by Focus’ conduct, it is part of any wilful breach by Focus that may be proved by the evidence. I believe Israel should have a fair chance to prove his theory. For that reason, I would reverse the trial court’s judgment and remand the breach of contract case for a new trial.