The debtors are a husband and wife collectively. In 2015, the husband and two of his business partners began negotiating the purchase of a business. They sought a loan from the bank to finance the purchase. The debtors secured the loan by granting mortgages on their personal property. As the anticipated closing date neared in July 2016, the husband and his partners pressured the bank to expedite the process to avoid business disruptions and finalize the closing. A representative of the bank delivered the necessary documents requesting they be signed and returned; some of the necessary documents required the signatures to be made in the presence of a notary. Upon being returned, the bank representative discovered the documents had not included a notarized signature, so the representative notarized the loan documents despite not witnessing the signatures. In late 2017, the debtors began missing payments on the loan to the bank. The debtors then contacted the bank to dispute the validity of the loan documents, claiming that the signatures had been forged and that the notarization was improper. The debtors filed suit, asserting claims that included forgery, notarial misconduct, and misrepresentation. The bank counterclaimed, seeking enforcement of the loan. After a twelve-day bench trial, the court concluded the loan documents were valid and enforceable and dismissed all remaining claims. The debtors appealed, challenging the finding that the loan documents had in fact been signed by him.
In Carmody v. Byline Bank, No. 2022AP1305, 2024 WL 1639513, 2024 Wisc. App. LEXIS 315 (Wis. Ct. App. Apr. 16, 2024) (unpublished opinion), the court of appeals declined to disturb the trial court’s factual findings because it determined they were not clearly erroneous. In support of its conclusion, the court cited direct and circumstantial evidence showing the husband had intentionally signed the loan documents. This evidence included text messages in which the husband said he did not remember signing the documents in front of a notary. The court further noted that there was no dispute over the signature of the documentation until shortly after a missed payment. Additionally, the husband argued he was out of town at the time the documentation was signed, asserting his signature was forged. The court found the testimony persuasive that the wife never discussed the loan documents with the husband when he returned home, suggesting that he had indeed signed the loan documents himself. Additionally, the wife testified that the signature looked like that of her husband’s. Although the debtors presented an expert witness who testified that the signatures had been forged, the court noted that a trier of fact is not bound by the opinions of an expert and can accept or reject the expert’s testimony without the ruling being found clearly erroneous. Lastly, on appeal, the debtors challenged the trial court’s grant of partial summary judgment. The court also upheld the grant of partial summary judgment, finding the debtors had failed to present admissible evidence of damages or prove that any damages were proximately caused by the bank’s notarial misconduct. The proximate cause had been the husband signing the loan documentation initially. The debtors also alleged that the bank had misrepresented the business valuation; however, the court rejected this claim, noting that the debtors had participated in the negotiations and that the bank was not a party to the sale. The court explained the bank was simply the party who provided the loan and therefore was not in a position to mislead the debtors.
By Libby Gear, [email protected]
Edited By Callighan Ard, [email protected]
Edited By Hayden Mariott, [email protected]