 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Mrozek v. Intra Financial Corp.6/9/2005
REVIEW of a decision of the Court of Appeals. Affirmed in part; reversed in part and cause remanded.
Patricia Mrozek and Plover Motel, Inc. (PMI) seek review of a court of appeals decision affirming the circuit court's grant of summary judgment to Mallery & Zimmerman, S.C. (Mallery) dismissing Mrozek's and PMI's claims for the negligent provision of legal services. We conclude that the circuit court correctly granted summary judgment dismissing the claim of PMI for lost profits, as well as Mrozek's claim for lost management fees that was dependent on PMI's claim for lost profits. However, we conclude that it was error to dismiss Mrozek's and PMI's other claims. Accordingly, we affirm in part, reverse in part and remand to the circuit court for further proceedings on Mrozek's and PMI's remaining claims based on the allegedly negligent provision of legal services.
I. BACKGROUND
Mrozek wanted to build a motel in Plover, Wisconsin and obtain an AmericInn franchise for it. She retained Mallery in June of 1992 to provide legal advice in forming a corporation that would construct and operate the motel, in financing the hotel construction and in negotiating with AmericInn Motel for a franchise.
Mallery drafted the articles of incorporation for PMI, which was incorporated August 25, 1992. Mrozek estimated the cost of constructing the motel at approximately $2.8 million. She hoped to finance the project in part through a private stock offering, the offering memorandum for which she asked Mallery to draft, and in part through an institutional loan.
Between August 1992 and February 1993, Mrozek obtained investment loans totaling more than $500,000 from approximately 20 individuals. Mrozek represented to these investors that the loans would be used for the construction of the motel, which would ultimately generate a 10% return on their investments. When each loan was made, the investor received a note promising PMI would repay the principal of the loan, plus interest, within a specified time.
Mrozek alleges that Mallery knew of these initial notes, but that Mallery did not inform her that her solicitation of these private investment loans violated Wisconsin laws. Instead, Mrozek says that Mallery agreed to draft replacement notes for the private investors, which notes were to be secured by mortgages on the motel property that Mallery would record with the Portage County Register of Deeds. Apparently, Mallery did draft replacement notes and mortgages, but Mrozek alleges that Mallery did not timely record the mortgages, causing the mortgages to become worthless as security for the investors' loans.
On September 25, 1992, PMI purchased approximately three acres of property on which the motel was to be constructed. Mallery negotiated with Intra Financial Corporation (IFC) to construct the motel for PMI, and assisted at the execution of the construction contract on October 10, 1992.
Also as part of the services Mallery provided to Mrozek and to PMI, Mallery drafted a private placement memorandum to sell securities in PMI. This private placement memorandum was filed with the Wisconsin Commissioner of Securities on February 5, 1993. According to Mrozek, the memorandum was not accurately drafted, causing the Commissioner of Securities to initially reject it. Additionally, after the memorandum was amended, she was unable to locate any purchasers who could meet the Commissioner's "investor suitability standards" that restricted who could invest in PMI based on the potential investor's net worth and income. In late 1993, the Commissioner revoked all sales of PMI stock.
On February 19, 1993 when PMI
Page 1 2 3 4 5 6 7 8 9 10 11 12 Wisconsin Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|