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COURT OF APPEALS
NOTICE
DECISION
DATED AND FILED                                              This opinion is subject to further editing.   If
published, the official version will appear in
the bound volume of the Official Reports.
February 20, 2013
A party may file with the Supreme Court a
Diane M. Fremgen                                                                                                petition to review an adverse decision by the
Clerk of Court of Appeals                                                                                       Court of Appeals.   See WIS. STAT. § 808.10
                                                                                                                and RULE 809.62.
                                                                                                                Cir. Ct. No.   2010CV709
Appeal No.                                                   2011AP2380
STATE OF WISCONSIN                                                                                              IN COURT OF APPEALS
DISTRICT II
MARINE BANK N/K/A CIBM BANK,
PLAINTIFF-RESPONDENT,
V.
SILVER OAK HOMES, LLC AND WHITETAIL WOODS, LLC,
DEFENDANTS-APPELLANTS,
DANIEL HALLORAN, KARI HALLORAN, LANNON STONE PRODUCTS,
INC., ADAIR SEWER AND WATER, INC., RENNHACK CONSTRUCTION
COMPANY, INC., PREMIER EXCAVATING & TRUCKING, LLC, PAYNE &
DOLAN, INC., HOMESTEAD INSULATION, INC., HOMESTEAD
DRYWALL, INC., HERR DIRECTIONAL DRILLING, LLC, CENTRAL
READY MIXED LIMITED PARTNERSHIP AND RIEDEL EXTERIORS,
DEFENDANTS.




No.   2011AP2380
APPEAL from a judgment of the circuit court for Ozaukee County:
THOMAS R. WOLFGRAM, Judge.   Affirmed.
Before Brown, C.J., Neubauer, P.J., and Reilly, J.
¶1                                                                                     PER CURIAM.    The trial court granted Marine Bank n/k/a CIBM
Bank a judgment of foreclosure against Silver Oak Homes, LLC, and Whitetail
Woods,   LLC,                                                                          (“Silver/Woods,”   where   used   collectively)   and   dismissed
Silver/Woods’ counterclaims.   We reject Silver/Woods’ arguments that the Bank
failed to establish a prima facie case for foreclosure, that the dismissal of their
counterclaims should be reversed and remanded for trial, and that the court erred
in denying their motion to compel discovery.   We affirm.
¶2                                                                                     Silver Oak executed and delivered to the Bank a promissory note
with an original balance of $726,160.00.   The note was secured by a duly recorded
construction mortgage on a partially constructed single-family home.   Title to the
subject real estate was vested in Whitetail Woods.   The note later was increased to
$754,160.00; the amended mortgage also was recorded.    Silver Oak agreed to
make monthly interest installments from February  23,  2008, until January  23,
2010, when all outstanding principal and accrued unpaid interest would be due.
¶3                                                                                     The City of  Mequon granted Silver Oak conditional approval to
develop a seven-lot subdivision.   Silver Oak entered into a contract with Daniel
and Kari Halloran for the construction of a house on one of the lots.   Due to
various cost overruns, Silver Oak was unable to complete the construction within
budget.   Silver Oak approached the Bank in late 2009 to seek a renewal of the note
and an increase of funds.   The Bank was interested and, per its usual procedure
before making a new loan, requested an updated title search.   That search revealed
three  clouds  on  title—two  construction  liens  and  an  Affidavit  of  Equitable
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No.   2011AP2380
Ownership filed by the Hallorans.   The title company informed the Bank that it
could not insure first-lien position on future advances under the loan if the two
liens and the Affidavit remained.    When the Hallorans declined  to execute a
subordination agreement, the note was not renewed and the Bank did not advance
additional funds.    Silver Oak defaulted and the Bank commenced foreclosure
proceedings.
¶4                                                                                          Silver Oak admitted conveying the mortgaged premises to Whitetail
Woods by quitclaim deed and that the note stated a maturity date of January 23,
2010, but denied that it was obligated in any amount above the original mortgage.
It also counterclaimed, alleging breach of contract, misrepresentation under WIS.
STAT. § 100.18 (2011-12),1 strict responsibility and negligent misrepresentation,
unjust enrichment, and breach of fiduciary duties.
¶5                                                                                          The  Bank  moved  for  summary judgment  seeking  a  judgment  of
foreclosure,  dismissal  of  the  counterclaims,  and a  declaration that the  Bank’s
interest  in  the  foreclosed  property  was  superior  to  any  interests  asserted  by
additional  defendants.     Silver  Oak  vigorously  opposed  the  Bank’s  motion,
asserting that a “vast number” of material facts remained at issue.   Calling it a
“garden variety foreclosure action,” the trial court granted the Bank’s motion.
Silver/Woods appeals.
¶6                                                                                          Summary judgment is proper when there are no issues of material
fact  and  one  party  is  entitled  to  judgment  as  a  matter  of  law.    WIS.  STAT.
§ 802.08(2).   We review the grant of summary judgment de novo, employing the
1  All references to the Wisconsin Statutes are to the 2011-12 version unless otherwise
noted.
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No.   2011AP2380
same  methodology  as  the  trial  court.    Green  Spring  Farms  v.  Kersten,  136
Wis. 2d 304, 314-15, 401 N.W.2d 816 (1987).   If the undisputed facts allow for
more than one reasonable inference, the competing inferences may constitute a
genuine issue of material fact.   See Hennekens v. Hoerl, 160 Wis. 2d 144, 162,
465 N.W.2d 812 (1991).   Whether an inference is reasonable and whether more
than one reasonable inference may be drawn are questions of law.   See id.   A
determination of whether a mortgage contract is ambiguous also is a question of
law that we consider de novo.   See Lamb v. Manning, 145 Wis. 2d 619, 627, 427
N.W.2d 437 (Ct. App. 1988).
¶7                                                                                       The Bank’s motion for summary judgment was supported by a Bank
officer’s affidavit establishing that Silver Oak executed the note and mortgage,
that the Bank is the current holder of both, and that Silver Oak defaulted by failing
to make scheduled installment payments and to make a final full payment on or
before the maturity date.   This constituted proof of the existence of the debt, note,
and mortgage for purposes of summary judgment, and of the Bank’s right to
foreclosure.
¶8                                                                                       Silver/Woods denies in its answer that it defaulted, but it did not file
evidentiary affidavits putting in dispute facts regarding the execution of the note
and  mortgage,  assignment  of  the  mortgage  and  note,  or  their  default.    The
opponent of a summary judgment motion may not rest on mere denials but must
affirmatively counter with evidentiary materials demonstrating a factual dispute.
Dawson  v.  Goldammer,  2006  WI  App  158,  ¶¶30-31,  295  Wis.  2d  728,  722
N.W.2d 106.   When the party opposing summary judgment fails to respond or
raise an issue of material fact, summary judgment can be rendered on that basis
alone.   See Bank of Two Rivers v. Zimmer, 112 Wis. 2d 624, 632, 334 N.W.2d
230 (1983).
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No.   2011AP2380
¶9                                                                                          The terms of the note and mortgage are unambiguous and must be
enforced as written.   See Borchardt v. Wilk, 156 Wis. 2d 420, 427, 456 N.W.2d
653  (Ct. App.  1990).    Silver/Woods contends that,  even if  unambiguous,  the
mortgage is not enforceable because it is with Silver Oak and title to the real estate
is  with  Whitetail  Woods.    As  this  is  the  first  time  Silver/Woods  raised  this
argument, we reject it as forfeited.   See Gruber v. Village of N. Fond du Lac,
2003 WI App 217, ¶27, 267 Wis. 2d 368, 671 N.W.2d 692 (“Although this court
engages in summary judgment review de novo, we nonetheless may apply waiver
to arguments presented for the first time on appeal.”).   Beyond that, the argument
fails on the merits.   We reject the unsupported notion that transferring title by a
quitclaim deed extinguishes a mortgage.    Indeed, Silver/Woods admitted in its
Requests for Admissions that, while Silver Oak conveyed the mortgaged property
to Whitetail Woods, Whitetail Woods’ ownership is subject to the mortgage.
¶10    Silver/Woods next contends that its bad-faith counterclaims create
issues of fact that preclude summary judgment.   We disagree.   When Silver Oak
defaulted, the Bank called the note due and commenced foreclosure proceedings
under the mortgage, just as those contracts allowed.   Where, as here, a contracting
party complains that the other party acts in a manner specifically authorized by
their agreement, a breach of the duty of good faith is not established.   See Super
Valu Stores, Inc. v. D-Mart Food Stores, Inc., 146 Wis. 2d 568, 577, 431 N.W.2d
721 (Ct. App. 1988).
¶11    Silver/Woods’ claims that the Bank failed to prove default on the
note or the amount of its judgment likewise fail.   The record contains sufficient
evidence of default to warrant the mortgage’s foreclosure.   The Bank officer’s
sworn statement, supported by a true and correct copy of the account statement,
set forth the amount due and owning.    Silver/Woods did not submit opposing
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No.   2011AP2380
proof.   Evidentiary facts, as set forth in the moving party’s affidavits or other
proof are taken as true if not contradicted by opposing affidavits or other proofs.
L.L.N. v. Clauder, 209 Wis. 2d 674, 684, 563 N.W.2d 434 (1997).
¶12    As to Silver/Woods’ counterclaims, we agree with the trial court and
the Bank that they have no arguable merit.   Silver/Woods asserts that the Bank
breached the contract by refusing to fund all draw requests, including one made by
e-mail to the Bank in October 2009.   Draw requests were processed through the
title company.   The affidavit of the title company’s vice president averred that
draw requests were to be made to the title company in affidavit form supported by
evidence of contractor needs, and that it received none after December  2008.
Silver/Woods did not counter with proof that its requests were properly made or
that they were for available funds, rather than additional funds above and beyond
the amount in the note.
¶13    Silver/Woods’ counterclaims alleging misrepresentation and unjust
enrichment also were properly dismissed.   This is a contract case.   The economic
loss doctrine bars negligence and strict responsibility misrepresentation claims.
See Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, ¶30, 283 Wis. 2d 555,
699 N.W.2d 205.   Contrary to their claim, the Bank is not unjustly enriched by
improvements Silver/Woods made to the mortgaged premises.   The sole damages
sought are those specified in the note and secured by the mortgage.   The Bank thus
is not inequitably accepting and retaining a benefit without payment.   See Staver v.
Milwaukee Cnty., 2006 WI App 33, ¶24, 289 Wis.2d 675, 712 N.W.2d 387.
¶14    We likewise reject Silver/Wood’s claim that a factual dispute exists
over whether the Bank breached its fiduciary duty.    The mere existence of a
borrower-lender  contract  and  borrower-lender  relationship  does  not  create  a
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No.   2011AP2380
fiduciary duty.   See Production Credit Ass’n of Lancaster v. Croft, 143 Wis. 2d
746,  752,  423 N.W.2d  544  (Ct. App.  1988).    While a fiduciary duty between
borrower and lender may be created by special contract terms, or by a special
relationship  between  the  borrower  and  lender,  see  id.  at                     752-53,              756-57,
Silver/Wood has not alleged that any exists here.
¶15    Finally, we affirm the denial of Silver/Woods’ motion to compel
discovery, a matter Silver/Woods concedes is within the trial court’s discretion.
See Franzen v. Children’s Hosp. of Wis., Inc., 169 Wis. 2d 366, 376, 485 N.W.2d
603 (Ct. App. 1992).   Silver/Woods made demands for internal documents of the
Bank that it believed would establish that it had made legitimate draw requests
that the Bank did not honor and that the Bank had agreed to extend the loan.   In
denying the motion, the trial court reasoned that the Bank did not go through with
the contemplated loan extension due to the cloud on title and the production of
further documents would not change that fact.   We see no erroneous exercise of
discretion.
By the Court.—Judgment affirmed.
This   opinion   will   not   be   published.                                        See   WIS.   STAT.
RULE 809.23(1)(b)5.
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