Zip Lube v. Coastal Savings
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME  81  
Docket:	Ken-97-390
Submitted
 on Briefs:	January 16, 1998
Decided:	April 23, 1998

Panel:  WATHEN, C.J., and ROBERTS, RUDMAN, DANA, LIPEZ and SAUFLEY, JJ.

ZIP LUBE, INC.

v.

COASTAL SAVINGS BANK

DANA, J.

	[¶1]  Zip Lube, Inc. appeals from a summary judgment entered in the
Superior Court (Kennebec County, Atwood, J.) in favor of Coastal Savings
Bank on Zip Lube's breach of contract claim contending that the court erred
when it determined that Zip Lube presented no admissible evidence of a
contract.  Finding no error, we affirm the judgment.
	[¶2]  In early 1995, Northern Pride Car Wash Systems, Inc. defaulted
on a mortgage note held by Coastal Savings Bank and, after a threat by
Coastal to foreclose on the mortgaged property, filed a petition for
protection pursuant to Chapter 11 of the Bankruptcy Code.  Coastal
anticipated taking over the car wash as either a mortgagee-in-possession or
purchaser and engaged the services of Joseph Malone, a commercial real
estate broker, who identified Philip Sewall, the president and principal
owner of Zip Lube, as a party interested in purchasing or operating the car
wash.  Throughout the spring of 1995, Sewall and Coastal engaged in
negotiations for the purchase of the car wash that resulted in several
successive written offers to purchase by Sewall, as each previous offer
expired without being accepted by the seller or approved by the Bankruptcy
Court.
	[¶3]  At some point during the negotiations with Coastal, Sewall was
contacted by Northern Pride's attorney, who suggested an arrangement
whereby Sewall would assist the debtor in taking the property out of
bankruptcy and eventually become sole owner of the car wash.  Sewall
rejected the proposal, telling Northern Pride's representative "immediately,
I don't do business that way."  Sewall then called Coastal to inform
representatives at the bank that he had been contacted by Northern Pride. 
The bank made it clear to Sewall that it would not finance any deal that
involved the debtor.  Sewall also spoke to the bank's attorney, who
purportedly told Sewall that the bank would make sure that he got the
property.  Sewall subsequently called Northern Pride's attorney and told
him yet again that he would not deal with the debtor.
	[¶4]  Sometime in June, Yvon Pellerin contacted Coastal through his
real estate broker, Karen Rich, to express his interest in purchasing the car
wash.  Coastal did not pursue Pellerin's interest because it already had a
buyer in Zip Lube.  On July 12, 1995, the Bankruptcy Court held a hearing
on a joint motion brought by Coastal and the debtor for an order authorizing
the sale of the debtor's assets.  Neither Sewall nor his lawyer were present
when the hearing began.  At some point during the hearing, the debtor's
attorney brought Pellerin's offer to the Bankruptcy Court's attention. 
Coastal's representative responded by requesting that the court approve the
sale to Zip Lube, asserting there was no financing for Pellerin's offer. 
Nevertheless, the court inquired of Pellerin as to whether he would make a
substantially higher offer in order to obtain a larger dividend for the debtor's
unsecured creditors, whereupon Pellerin raised his $340,000 offer by ten
percent to $374,000.  Rich, Pellerin's broker, informed the court, however,
that Pellerin could not purchase the property without receiving financing
from Coastal.  The court ordered a recess and instructed the parties to
discuss Pellerin's offer.  During the recess, Pellerin, Rich, the bank's
attorney, and Janet Ross, a commercial loan officer and vice-president at
Coastal, discussed the financing terms and contingencies Pellerin would
require to complete the sale.
	[¶5]  At the conclusion of this conference, the bank's attorney
presented the terms of Pellerin's offer to the Bankruptcy Court.  Compared
to Sewall's offer, the Pellerin offer yielded a greater net gain to the bankrupt
estate through a higher purchase price and lower commissions.  Sewall and
his attorney were present in court by this time, and Sewall informed the
court that he would not waive the remaining contingencies in his offer to
purchase if the Bankruptcy Court approved the parties going forward with
Pellerin's offer for the property.  Sewall also advised the court that
negotiations with Pellerin might lead him to drop out of contention for the
debtor's property.  The Bankruptcy Court agreed to provide Sewall an
opportunity to increase his bid, but he declined to do so by the deadline set
by the court.  Another hearing was held by the Bankruptcy Court two days
later, after which Coastal extended financing to Pellerin as, at that time,
Pellerin's offer was the only outstanding offer for the purchase of the
property.
	[¶6]  Zip Lube brought suit against Coastal claiming that the bank had
breached its promise to finance only Zip Lube and its "guarantee" that Zip
Lube would get the property by ultimately financing Pellerin's acquisition of
the property.  After discovery was completed, the Superior Court granted
Coastal's motion for a summary judgment, concluding that even if the bank
made the assurances to Zip Lube that Sewall contended, no evidence was
presented to establish consideration for an exclusive financing agreement.
	[¶7]  An entry of a summary judgment is appropriate when there is no
issue of material fact to be determined at trial and any party is entitled to
judgment as a matter of law.  M.R. Civ. P. 56(c).  "We review the Superior
Court's entry of a summary judgment for errors of law, viewing the evidence
in the light most favorable to the party against whom the summary judgment
was entered."  Harkness v. Fitzgerald, 1997 ME 207, ¶ 5, 701 A.2d 370,
372 (quotation omitted).
	[¶8]  Zip Lube's contractual theory maintains that Coastal offered to
finance Zip Lube exclusively if Zip Lube would agree to decline the debtor's
invitation to participate in taking the property out of bankruptcy.  According
to Zip Lube, its promise to refuse to deal with the debtor constituted
acceptance of Coastal's offer, and its actual forbearance in not dealing with
the debtor constituted adequate consideration for the contract.  In order to
establish forbearance Zip Lube had to show "a request from the promisor for
the promisee's forbearance [and] the promisee's promise to forbear followed
by forbearance."  Zamore v. Whitten, 395 A.2d 435, 444 (Me. 1978). 
"Forbearance or omission to act . . . in reliance upon a promise cannot
constitute a consideration therefor and transform the naked promise into a
contract, unless the forbearance . . . is, in the legal sense, at the request of
the promisor. "  Id.
	[¶9]  Sewall testified in his deposition that upon being contacted by
Northern Pride's representative he immediately stated that he would not
deal with the debtor because he was working with the bank.  Only then,
according to Sewall's deposition testimony, did he notify the bank of the
debtor's offer.  Because of this testimony, Sewall was unable to show that his
refusal to deal with the debtor was at the request of the bank, a necessary
requirement for proving that his forbearance constituted consideration for
the alleged promise.  In direct contradiction to this testimony, Sewall
testified in an affidavit submitted in opposition to the motion for a summary
judgment that he did not communicate his refusal to deal with the debtor
until after the bank representatives promised him that he would get the
property if he did not deal with the debtor.
	[¶10]  Zip Lube argued in opposition to the motion for a summary
judgment, and maintains on appeal, that Sewall's conflicting testimony is a
matter best left to the factfinder to determine his credibility at trial.  The
trial court disagreed and refused to consider Sewall's affidavit to the extent
it conflicted with his deposition testimony.  We believe the court acted
appropriately and adopt the rule that a party will not be permitted to create
an issue of material fact in order to defeat a summary judgment motion
simply by submitting an affidavit disputing his own prior sworn testimony. 
See Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st Cir.
1994).  "When an interested witness has given clear answers to
unambiguous questions, he cannot create a conflict and resist summary
judgment with an affidavit that is clearly contradictory, but does not give a
satisfactory explanation of why the testimony is changed."  Id.  Because
Sewall's deposition testimony clearly revealed that he was not going to deal
with the debtor even before speaking to the bank officials, he was unable to
demonstrate the forbearance necessary to establish consideration for any
alleged agreement between Zip Lube and the bank.  Accordingly, the court's
grant of a summary judgment to the bank was proper.
	The entry is:
					Judgment affirmed.
                                                                          
Attorney for plaintiff:

John D. Clifford, IV, Esq.
Clifford & Golden, P.A.
P O Box 368
Lisbon Falls, ME 04252

Attorney for defendant:

Deirdre M. Smith, Esq.
Drummond Woodsum & MacMahon
P O Box 9781
Portland, ME 04104-5081