2009AP2721 BVB1, LLC v. Investors Bank

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Contracts
Accord and satisfaction; waiver

Even though a lender accepted repayment, it is not barred from enforcing a prepayment penalty, where the borrower sent a letter reserving its right to contest the provision and then did contest it.
“InvestorsBank did not consent to defective performance. Instead, InvestorsBank offered to reduce the prepayment penalty in order to permit InvestorsBank to complete the sale to Graff/Goldman and to avoid litigation. In other words, InvestorsBank offered to change the terms of the parties’ previous agreement-namely, remove the ‘plus 2.5%’ variable-in exchange for BV/B1’s potential future business and agreement that it would not pursue litigation. BV/B1 rejected that offer when it informed InvestorsBank that it sought immediate return of the reduced prepayment penalty fee and then commenced litigation. BV/B1 cannot now seek to enforce an offer that it previously rejected.” “While InvestorsBank made BV/B1 an offer to avoid litigation, BV/B1 rejected that offer when it sent InvestorsBank a letter reserving its right to contest the enforceability of the prepayment penalty provision. It then followed through on that promise, that is, InvestorsBank never received any consideration in exchange for its offer, and therefore, there was no binding contract. Because BV/B1 never assented to InvestorsBank’s offer, neither party was prohibited from seeking redress under the terms of the contract, and having previously notified BV/B1 of the amount owed under the contract, there were no time restrictions on InvestorsBank’s ability to file a claim for the total amount owed.”
Affirmed.

Recommended for publication in the official reports.

2009AP2721 BVB1, LLC v. Investors Bank

Dist. I, Milwaukee County, Kahn, J., Brennan, J.

Attorneys: For Appellant: Nusslock, Kathy L., Milwaukee; Sell, Gregory J., Milwaukee; Hanan, Beth E., Milwaukee; For Respondent: Laing, Dean P., Milwaukee

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