— A City of Pewaukee builder has been awarded a $1.23
million verdict against a bank after it sold the loan
the builder needed to complete a New Berlin condo
project, causing the builder to spend his own funds to
finish the job.
a three-day trial last week, a Waukesha County jury in
Judge Kathryn W. Foster’s court awarded Benjamin Mohns
of Mohns, Inc. some $239,249 dollars in compensatory
damages as well as $1 million in punitive damages,
finding the bank unjustly enriched itself at Mohns’
Nardella, a spokeswoman for BMO Financial Group, said in
an email to The Freeman, “The Bank is aware of the
jury’s verdict, but is confident that it did not
engage in any wrongful conduct that would warrant the
damages awarded. The Bank is evaluating its options for
the judicial review of the verdict, and the pre-trial
orders of the court in this case, including appeal.”
case stems from Mohns being hired by developer Paul
Bouraxis in 2005 to build the Hickory Hills Condominiums
on Beloit Road in New Berlin, a project with 104 units
in 26 buildings for a total of $16.4 million, plus $1.95
million in infrastructure, with financing approved by
M& I Bank, according to the complaint in the case.
M& I Bank paid out almost all of the payments from
construction loans on the project until about 2010, when
Mohns was concerned about whether he’d be paid for the
work he was doing. After threatening to discontinue the
work, Bouraxis — who was ultimately dismissed as a
party to the action — told Mohns to contact M& I
Bank, which assured Mohns he would be paid, with over
$200 available to draw from.
M& I Bank was merged into BMO Harris National Bank
Association in 2011, which then sold its loans to
another company without informing Mohns, his suit said.
Ultimately, that company, MIL, denied responsibility and
asserted it was not responsible for representation
M& I, BMO or the loan officer who worked for both
firms after the merger, made, the suit said.
sued for breach of contract, misrepresentation, and
unjust enrichment, alleging that BMO profited on the
loan sale after Mohns expended his own funds to improve
jury agreed, and awarded Mohns $39,835 for his own funds
expended, 44,312 on interest on it, $22,434 on lost
profits, as well as $132,668 to compensate Mohns after
BMO Harris was unjustly enriched.
addition, the jury awarded Mohns $1 million after
finding that BMO Harris acted maliciously toward Mohns
or in disregard of its rights.
Machulak, attorney for Mohns, said Mohns was assured
he’d be paid in 2011, and went a long way to
completing three four-family buildings after BMO sold
the loan without Mohns’ knowledge.
judge determined there was misrepresentation here
because they really didn’t plan to pay him, they
wanted to make this look better, the loan was upside
down,” he said. “They were using him to show what
was happening on the project and they got a much better
price on the loan and then they wouldn’t pay him.
line is I think that the jury ... saw it for what it
was, it was a big bank taking advantage of the guy. Why
not just pay the guy? You’re BMO. Why go through years
and years of litigation ... Just pay the contract like
you promised him.”