United States District Court, E.D. Wisconsin
DECISION AND ORDER
William C. Griesbach, Chief Judge United States
Fortune Avenue, LLC, sued Defendant Howard Bedford in state
court for the amount allegedly due on a promissory note in
the original amount of $350, 000 payable to Fortune that
Bedford executed on October 11, 2011. Bedford, a citizen of
the State of Illinois, removed the case to federal court
asserting jurisdiction under 28 U.S.C. § 1332. Fortune
is a citizen of Wisconsin and Georgia, and thus the complete
diversity necessary for federal jurisdiction under §
1332 exists. Before the court is Fortune's motion for
summary judgment. For the reasons below, the motion will be
October 21, 2011, Bedford signed an unsecured Promissory
Note, which was payable to Fortune in the amount of $350,
000. See Janssen Aff., Ex. A, Dkt. No. 12-1.
Bedford's decision to sign the Promissory Note was born
out of a business deal with Ron Van Den Heuvel that had gone
awry. In an effort to deal with troublesome creditors and to
distance himself from the business deal, Bedford agreed to
sign the Promissory Note, expecting it to be his final
obligation to the Van Den Heuvel's. The Note provides for
a variable interest rate, with a minimum interest rate of no
less than 5.5% until the Note's maturity date. In the
event of default, the Note calls for an accelerated interest
rate of 5%, and should any payments be delinquent, the Lender
may collect a delinquency charge of 5% of the monthly unpaid
amount. The Note explicitly states that the governing law of
the Note shall be the laws of Wisconsin, except to the extent
federal law may preempt Wisconsin law. Finally, the Note
states, “This Note may not be supplemented or modified
except in writing and signed by Maker and Lender.”
Id. at 3.
to the parties, Bedford made five payments in 2012, amounting
to $42, 365.74. It is at this point that the parties dispute
what happened next. Bedford alleges that, on December 5,
2012, he and David Van Den Heuvel, the Fortune representative
collecting payments on the Note and the brother of Ron Van
Den Heuvel, met at David Van Den Heuvel's office in De
Pere, Wisconsin. Bedford claims David Van Den Heuvel told him
not to worry about making any more payments pursuant to the
Note because the Note was originally related to debts
attributable to Ron, and that the debt was a family concern.
Bedford asserts that he believed David Van Den Heuvel was
speaking on behalf of Fortune, and that he no longer had any
obligations under the Note. As such, Bedford stopped making
payments on the Note.
on the other hand, asserts that David Van Den Heuvel never
told Bedford that the remaining debt on the Note was forgiven
or waived, and that Bedford, based on the default interest
rate and delinquency charges, now owes it $592, 316.76.
Between December 5, 2012, and January 18, 2017, there was no
communication between the parties, and Bedford had made no
payments on the Note. Fortune alleges that, on or about
January 18, 2017, Jim Kellam, a Fortune representative, sent
a letter with a renewal notice for the Note to Bedford.
Bedford, however, does not acknowledge receipt of this
notice, and instead asserts that the next communication he
received from Fortune was dated June 13, 2018, demanding that
he make payments pursuant to the Note. Shortly thereafter, on
July 17, 2018, Fortune filed this action.
judgment is appropriate when the movant shows that there is
no genuine issue of material fact and that the movant is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
In deciding a motion for summary judgment, the court must
view the evidence and make all reasonable inferences that
favor them in the light most favorable to the non-moving
party. Johnson v. Advocate Health & Hosps.
Corp., 892 F.3d 887, 893 (7th Cir. 2018) (citing
Parker v. Four Seasons Hotels, Ltd., 845 F.3d 807,
812 (7th Cir. 2017)). The party opposing the motion for
summary judgment must “submit evidentiary materials
that set forth specific facts showing that there is a genuine
issue for trial.” Siegel v. Shell Oil Co., 612
F.3d 932, 937 (7th Cir. 2010) (citations omitted). “The
nonmoving party must do more than simply show that there is
some metaphysical doubt as to the material facts.”
Id. Summary judgment is properly entered against a
party “who fails to make a showing to establish the
existence of an element essential to the party's case,
and on which that party will bear the burden of proof at
trial.” Austin v. Walgreen Co., 885 F.3d 1085,
1087-88 (7th Cir. 2018) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986)).
principal issue of this motion for summary judgment is
whether a written contract with a clause requiring amendments
to be made in writing can be altered through an oral
agreement. Bedford contends that David Van Den Heuvel, acting
on behalf of Fortune, orally released him from his obligation
to make further payments. Fortune, on the other hand, argues
that, even if there were evidence of an oral agreement, aside
from Bedford's self-serving statements, the oral
agreement would be invalid under Wis.Stat. § 403.604,
Wisconsin's version of the Uniform Commercial Code (UCC).
Section 403.604 provides:
A person entitled to enforce an instrument, with or without
consideration, may discharge the obligation of a party to pay
the instrument by doing any of the following:
(a) An intentional voluntary act, such as surrender of the
instrument to the party, destruction, mutilation or
cancellation of the instrument, cancellation or striking out
of the party's signature or the addition of words to the
instrument indicating discharge.
(b) Agreeing not to sue or otherwise renouncing the rights
against the party ...