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No. 134780
| Miljevich Corporation, |
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David M. Savu |
Plaintiff-Appellant, |
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(Appeal from Ct of Appeals) |
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(Ontonagon - Zeleznik, J.) |
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| North Country Bank & Trust, |
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Joseph C. Fisher |
| Defendant-Appellee. |
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| __________________________________________ |
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Background
Miljevich Corporation borrowed approximately $1.4 million from North Country Bank & Trust. The note provided that the interest rate on the loan was “[o]ne and one-half percent (1½%) per annum above the ‘prime’ as published from time to time by the Bank as its ‘prime rate’. . . .” The bank never published its prime interest rate. After the loan was refinanced and paid off, Miljevich’s attorney asked the bank what interest rate had been charged. The bank responded that its prime rate was the same as the Wall Street Journal’s prime rate. Miljevich examined the payments that had been made, and determined that the rate charged by the bank was actually in excess of the Wall Street Journal’s prime rate plus 1.5 percent. Miljevich sued the bank for the difference between what the bank had charged it for interest, and the interest payments that should have been charged pursuant to the Wall Street Journal’s prime rate plus 1.5 percent. After a one-day bench trial, the trial court ruled in Miljevich’s favor. The court reasoned that, because the bank had not published its prime rate, the note did not provide an interest rate. The court therefore supplied a “reasonable” interest rate based on evidence of the parties’ intent – the Wall Street Journal’s prime rate plus 1.5 percent – and issued a judgment of about $140,000 against the bank, representing the difference between what the bank had charged and what it should have charged using the Wall Street Journal prime rate. The Court of Appeals reversed the trial court in an unpublished per curiam opinion, ruling that the trial court should have enforced the contract as written, applying the bank’s prime interest rate plus 1.5 percent as the parties had intended. It reasoned that the bank’s failure to publish its prime rate was a breach of contract, but that Miljevich did not suffer any damages as a result. The Court of Appeals remanded the case to the trial court for entry of a judgment of no cause of action in favor of the bank. Miljevich appeals..
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