American National Bank & Trust Co. v. Schigur

Opinion

CHRISTIAN, J.

American National Bank & Trust Company of Eau Claire, Wisconsin^ appeals from an order awarding to respondent James F. Schigur, indemnification of costs and counsel fees in the amount of $5,291.16.

Appellant brought an action against defendants, who are not parties to this appeal, to foreclose deeds of trust securing promissory notes and to obtain deficiency judgments against the makers and guarantors of the notes. Some of the defendants cross-complained against appellant, and brought respondent Schigur in as a cross-defendant, upon allegations that respondent, as an officer of appellant, had used fraudulent tactics to induce the cross-complainants to execute the notes which appellant was attempting to collect. It is properly conceded by appellant that if the allegations of fraud had been proven, appellant’s claims against the cross-complainants would have been defeated. It is also conceded that the allegations of fraud relate only to respondent’s actions as an employee of appellant.

The action has been settled and dismissed with prejudice as to all parties.

On August 9, 1977, pursuant to a request for dismissal of the cross-complaint as against Schigur only, filed by cross-complainants, the cross-complaint was dismissed. However, the answer to the complaint filed by the same parties raised affirmative defenses of fraud and negligence and these issues, which were substantially the same as those raised by the cross-complaint, were not affected by the dismissal of the

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cross-complaint. On August 17, Schigur moved for indemnity. No evidence was taken at the hearing; the motion was submitted on oral argument and granted on September 15. The record indicates that settlement negotiations between the bank and defendants were pending which if consummated would have resulted in a substantial reduction of the bank’s recovery on the principal amount of the notes. On November 9, by stipulation, the entire action was dismissed with prejudice as to all parties. Thus, the record indicates that there never was a determination of any of the issues raised by the allegations of the cross-complaint or of the affirmative defenses pleaded by defendants in the case in chief. The present appeal followed.