SUPREME COURT OF WISCONSIN

2010 WI 134

CASE NO.:

2008AP1845

COMPLETE TITLE:

Town Bank, a Wisconsin Banking Corporation,

Plaintiff-Appellant,

v.

City Real Estate Development, LLC,

Defendant-Respondent-Petitioner.

REVIEW OF A DECISION OF THE COURT OF APPEALS

2009 WI App 160

Reported at: 322 Wis. 2d 206, 777 N.W.2d 98

(Ct. App. 2009-Published)

OPINION FILED:

December 14, 2010

SUBMITTED ON BRIEFS:

ORAL ARGUMENT:

September 7, 2010

SOURCE OF APPEAL:

COURT:

Circuit

COUNTY:

Waukesha

JUDGE:

Paul F. Reilly

JUSTICES:

CONCURRED:

DISSENTED:

BRADLEY, J. and ABRAHAMSON, C.J. dissent

(opinion filed).

NOT PARTICIPATING:

ATTORNEYS:

For the defendant-respondent-petitioner there were briefs

by Thad W. Jelinske, Michael J. Anderson and Mawicke & Goisman,

S.C., Milwaukee, and oral argument by Thad W. Jelinske.

For the plaintiff-appellant there was a brief by Paul R.

Erickson, Kari H. Race and Gutglass, Erickson, Bonville &

Larson, S.C., Milwaukee, and oral argument by Paul R. Erickson.

An amicus curiae brief was filed by John E. Knight, James

E. Bartzen, Kirsten E. Spira and Boardman, Suhr, Curry & Field

LLP for the Wisconsin Bankers Association.

2010 WI 134

NOTICE

This opinion is subject to further

editing and modification. The final

version will appear in the bound

volume of the official reports.

No. 2008AP1845

(L.C. No. 2006CV61)

STATE OF WISCONSIN : IN SUPREME COURT

Town Bank, a Wisconsin Banking Corporation,

Plaintiff-Appellant,

v.

City Real Estate Development, LLC,

Defendant-Respondent-Petitioner.

FILED

DEC 14, 2010

A. John Voelker

Acting Clerk of Supreme

Court

REVIEW of a decision of the Court of Appeals. Affirmed.

¶1 ANNETTE KINGSLAND ZIEGLER, J. This is a review of a

published decision of the court of appeals, Town Bank v. City

Real Estate Development, LLC, 2009 WI App 160, 322 Wis. 2d 206,

777 N.W.2d 98, which reversed the orders of the Waukesha County

Circuit Court, Judge Paul F. Reilly presiding, denying Town

Bank's two motions for summary judgment.

¶2 Town Bank and City Real Estate Development, LLC (City

Real Estate) entered into a Term Credit Agreement (the TCA),

through which Town Bank loaned $2,500,000 to City Real Estate

for the purpose of acquiring an office building in downtown

Milwaukee. Town Bank seeks a declaratory judgment that it fully

No. 2008AP1845

2

complied with the TCA and is not obligated to provide additional

financing to City Real Estate under the terms of a previously-

issued commitment letter (the commitment letter).

¶3 Town Bank twice moved for summary judgment, which the

circuit court denied. Because those motions were denied, the

case proceeded to a jury trial. The jury returned a verdict in

favor of City Real Estate. Town Bank appealed, and the court of

appeals reversed.

¶4 On appeal to this court, City Real Estate argues that

the TCA is ambiguous, and as such, the circuit court properly

denied summary judgment and directed the case to trial.

According to City Real Estate, it is not clear whether the

parties intended the TCA to be the final expression of only the

first of two financing phases, or whether the parties intended

the TCA to be the final expression of the parties' financing

agreement altogether. As evidence of the former, City Real

Estate points to the commitment letter and various credit

memoranda prepared by Town Bank, all of which reference a two-

phase financing arrangement.

¶5 We conclude that the TCA is an unambiguous, fully

integrated agreement with which Town Bank fully complied.

Accordingly, Town Bank should have been granted summary

judgment, and the case should not have proceeded to a jury

trial. We agree with Town Bank that the TCA contains an

unambiguous merger clause which precluded City Real Estate from

introducing any evidence of prior understandings or agreements

that may have existed between the parties, including the

No. 2008AP1845

3

commitment letter. Even assuming, without deciding, that the

commitment letter constitutes a separate and enforceable

contract for financing, we conclude that Town Bank was within

its rights to terminate the agreement. It is undisputed that

City Real Estate did not fulfill at least two of the conditions

set forth in the commitment letter. We therefore affirm the

decision of the court of appeals.

I. FACTUAL BACKGROUND

¶6 In March 2004 the managing member of City Real Estate,

David Leszczynski (Leszczynski), approached Town Bank to secure

financing for City Real Estate's proposed acquisition and

renovation of a 22-story office building in downtown Milwaukee

known as the Wisconsin Tower. City Real Estate's development

plan consisted of acquiring the building, demolishing and

refurbishing its interior, and converting the space into 65

residential condominium units.

¶7 On April 1, 2004, Town Bank's Vice President of

Business Banking, Christopher Zirbes (Zirbes), prepared a loan

write-up and recommended approval of a $9,000,000 loan to City

Real Estate for the purpose of "purchas[ing] and construct[ing]

retail space and condominiums in the Wisconsin Tower in downtown

Milwaukee." The write-up indicated an initial draw of

$2,500,000 to be put towards the building's purchase price. In

addition, the write-up contemplated that the "[p]rimary source

of repayment will come from [the] sale of condominium units."

¶8 On May 27, 2004, Town Bank sent Leszczynski a letter

(the commitment letter), which stated that Town Bank "is pleased

No. 2008AP1845

4

to provide [City Real Estate] with a financing commitment for a

$9,000,000 Construction Line."

1

Relevant for our purposes, the

commitment letter outlined several terms and conditions,

including a credit facility that divided the $9,000,000

construction line into two phases: "A) $2,500,000 initial

funding for acquisition of building and completion of

demolition, engineering, asbestos removal and marketing," and

"B) $6,500,000 additional funding for the construction of

condominium units as pre-sales dictate." The latter provision

further noted that "[b]ank financing will be based on 75% of the

pre-sold units." As collateral for Town Bank's commitment to

City Real Estate, Town Bank was to receive, inter alia, a "1

st

R/E mortgage on [the] Subject Property."

¶9 In addition, the commitment letter provided that the

"[c]losing of [the] loan is contingent upon but not limited to"

four conditions:

A. Subject to satisfactory review of appraisal, title

commitment, Environmental report, construction

plans, and final review of loan documents by the

Bank's legal counsel.

B. Borrower agrees to contribute $900,000 in up front

equity capital prior to closing.

C. Borrower agrees to pay closing costs, including

title, filing and documentation.

D. Borrower and guarantors agree to provide annual

personal financial statements and tax returns.

1

The May 27, 2004, commitment letter expressly superseded

an earlier letter dated April 13, 2004.

No. 2008AP1845

5

¶10 Finally, the commitment letter contained the following

clause: "In order to be effective in any regard, this letter

must be properly executed and returned to the Bank by June 11,

2004. This commitment may be terminated at the sole option of

Town Bank if the credit agreement is not executed by June 25,

2004."

¶11 While City Real Estate timely executed and returned

the commitment letter, it is undisputed that a credit agreement

between Town Bank and City Real Estate was not executed by June

25, 2004. However, on July 15, 2004, the parties entered into

the TCA, and Town Bank loaned $2,500,000 to City Real Estate.

The TCA incorporated by reference a Business Note (the Business

Note), also dated July 15, 2004, in which City Real Estate

promised to pay to Town Bank the sum of $2,500,000 plus interest

by August 15, 2004.

¶12 According to Zirbes and Jay Mack (Mack), Town Bank's

President and Chief Executive Officer, the TCA was intended to

fund City Real Estate's purchase of the Wisconsin Tower.

Earlier that month, Leszczynski had represented to Town Bank

that City Real Estate's option to buy the building was about to

expire and that Ruth's Chris Steak House, a major commercial

tenant with whom City Real Estate had been negotiating, refused

to sign a letter of intent until City Real Estate owned the

building.

2

On July 14, 2004, Zirbes prepared an internal memorandum

for Town Bank's credit file. The memorandum stated, in relevant

part:

No. 2008AP1845

6

¶13 The TCA is a standard form lending document sold to

lenders by the Wisconsin Bankers Association. The first section

of the TCA is entitled "Term Loan" and provides that the parties

must "[c]heck" the box of one of two options: "(a) Single Note;

Multiple Advances," or "(b) Multiple Notes; Multiple Advances."

In this case, the second box was checked. By checking the

second box, the parties gave effect to the following provision:

If checked here, and in consideration of extensions of

credit from Lender to Customer from time to time,

Lender and Customer agree that sections 4 through 19

of this Agreement shall apply to each such extension

of credit unless evidenced by a document which states

it is not subject to this Agreement. The term "Loan"

includes all such extensions of credit. The term

"Note" includes each promissory note evidencing

Customer's obligation to repay an extension of Credit.

This Agreement does not constitute a commitment by

Lender to make such extensions of credit to Customer.

¶14 Relevant to this case, section 14 of the TCA bears the

heading "Entire Agreement" and provides:

This Agreement, including the Exhibits attached or

referring to it, the Note and the Security Documents,

are intended by Customer and Lender as a final

expression of their agreement and as a complete and

exclusive statement of its terms, there being no

conditions to the full effectiveness of their

agreement except as set forth in this Agreement, the

Note and the Security Documents.

Because of timing issues with Ruth's Chris and

the fact that they will not sign a letter of intent to

take the space until [Leszczynski] owns the

building[,] Town Bank will be closing the loan to the

[City Real Estate] LLC in two phases. The first phase

is closing on July 15th for $2,500,000 for the

purchase of the building. The loan will be a 60 day

note funding into the $9,000,000 construction loan

that was approved in April of this year.

No. 2008AP1845

7

Three exhibits were attached to the TCA. Exhibit A is

substantively blank and states that it is "Not Applicable."

Exhibit B provides a list of "Security Documents," including a

Chattel Security Agreement, a Mortgage on the building, and an

Assignment of Leases and Rents on the building. Exhibit C lists

several "Additional Covenants," none of which are material to

this case.

¶15 It is undisputed that the TCA does not expressly

mention the commitment letter.

¶16 On July 16, 2004, City Real Estate closed on the

purchase of the Wisconsin Tower for $2,500,000. Thereafter,

Town Bank continued to monitor City Real Estate's progress on

the building. On August 26, 2004, Zirbes prepared an internal

memorandum for Town Bank's credit file, in which he recognized

that "[t]he marketing of the building has started off slower

than originally anticipated." Zirbes further noted:

Last month we decided to close this loan in two

phases allowing [City Real Estate] to purchase the

building and begin negotiations with Ruth's Chris,

with the understanding that phase II (the construction

loan) would begin when they sta[r]ted to get some pre-

sold condo units. Because of the fact that they are

behind schedule with their marketing, we are looking

to extend the interest only period on the building for

an additional 3 month period to allow for some pre-

solds.

In a loan write-up dated October 14, 2004, Zirbes recommended a

three-month extension on the interest period of the $2,500,000

loan "before starting the construction phase of the loan."

No. 2008AP1845

8

¶17 On October 19, 2004, a meeting was held between

Leszczynski, Zirbes, Mack, and loan officer Terry O'Connor to

discuss the progress of the Wisconsin Tower. At that time,

according to Zirbes, Town Bank learned that Ruth's Chris Steak

House was no longer a prospective tenant and that City Real

Estate had no condominium pre-sales. Furthermore, City Real

Estate had not infused its $900,000 in equity into the project,

as required by the commitment letter. According to Zirbes, Town

Bank then informed Leszczynski that any construction financing

would have to be reapproved.

¶18 On November 19, 2004, Zirbes memorialized the meeting

in a letter to Leszczynski:

As we discussed at our meeting on Tuesday,

October 19, 2004, Town Bank's April 13 commitment to

provide construction financing to City Real Estate

Development LLC is no longer effective and in order

for the Bank to finance the construction of your

condominium project, the loan must be re-approved by

the Bank's loan committee.

As Zirbes noted, by that time, the loan committee had changed as

a result of WinTrust Financial's October 2004 purchase of Town

Bank.

¶19 On December 28, 2004, Zirbes sent another letter to

Leszczynski, reiterating that "the loan commitment dated April

13 is no longer effective" and that a construction loan would

require the loan committee's approval. Zirbes explained,

however, that the loan committee had reservations about City

Real Estate's project:

No. 2008AP1845

9

Since the Bank originally approved the loan to

City Real Estate Development LLC, you requested the

Bank to change the loan structure in order to

accommodate your need to close on the purchase of the

property. The Bank agreed to make the acquisition

loan with the understanding that a lease from Ruth's

Chris would be signed and condominium units would be

sold prior to entering into a construction loan.

Instead, your prospects for obtaining Ruth's Chris as

a tenant have faded and you have not obtained enough

unit presales to fund construction without additional

equity.

While Town Bank agreed to extend City Real Estate's $2,500,000

loan to February 15, 2005, Zirbes advised Leszczynski that a

construction loan would not be approved based upon the current

circumstances and that Leszczynski "should seek construction

lending from other lenders."

¶20 In September 2005, City Real Estate secured

alternative construction financing through M&I Bank and Horicon

State Bank, and upon closing those loan transactions, repaid

Town Bank in full for the $2,500,000 loan.

II. PROCEDURAL POSTURE

¶21 On January 6, 2006, Town Bank filed a complaint

against City Real Estate, seeking a declaratory judgment that

City Real Estate failed to satisfy its obligations under the

commitment letter and that Town Bank was not obligated to

provide additional financing.

¶22 In its answer, City Real Estate affirmatively alleged

that it satisfied all contingencies set forth in the commitment

letter and requested that the court dismiss Town Bank's

complaint. In addition, City Real Estate counterclaimed for

damages arising out of Town Bank's alleged breach of the

No. 2008AP1845

10

commitment letter for failing to advance to City Real Estate the

$6,500,000 of additional financing.

¶23 On October 16, 2006, Town Bank filed its first of two

motions for summary judgment. Town Bank argued that its

obligations to City Real Estate were governed entirely by the

TCA and that Town Bank fulfilled those obligations when it

funded $2,500,000 to City Real Estate on July 15, 2004. Town

Bank contended that the TCA contained an unambiguous merger

clause which prevented City Real Estate from introducing any

evidence of prior understandings or agreements that may have

existed between the parties, including the commitment letter.

¶24 The circuit court denied Town Bank's first motion for

summary judgment in an order dated January 24, 2007. The

circuit court determined that the case was not ripe for summary

judgment, namely on the grounds that the TCA was ambiguous.

¶25 On October 19, 2007, Town Bank filed its second motion

for summary judgment, again arguing that the TCA was an

unambiguous stand-alone agreement with which Town Bank fully

complied. In the alternative, assuming that the commitment

letter was enforceable, Town Bank argued that City Real Estate

failed to satisfy several of its underlying conditions,

including the requirement that a credit agreement be executed by

June 25, 2004, and the obligation to contribute $900,000 in up-

front equity.

¶26 On January 3, 2008, the circuit court denied Town

Bank's second motion for summary judgment and set the case for a

jury trial. The circuit court determined that genuine issues of

No. 2008AP1845

11

material fact precluded summary judgment, including whether the

TCA was a stand-alone agreement and if not, whether City Real

Estate breached the commitment letter.

¶27 Because the circuit court denied Town Bank's motions

for summary judgment, the case proceeded to a six-day jury

trial. On May 6, 2008, the jury returned a verdict in favor of

City Real Estate. The special verdict form consisted of three

questions. First, the jury was asked if Town Bank and City Real

Estate entered into a contract as set forth in the commitment

letter. The jury answered, "Yes." Second, the jury was asked

if Town Bank breached that contract. The jury answered, "Yes."

Third, the jury was asked to determine the sum of money that

would fairly and reasonably compensate City Real Estate for its

damages. The jury awarded $600,000 to City Real Estate.

¶28 On June 26, 2008, the circuit court entered judgment

on the jury verdict and ordered Town Bank to pay $600,000, plus

fees and costs, to City Real Estate.

¶29 Town Bank appealed. The court of appeals reversed and

remanded, instructing the circuit court to enter judgment for

Town Bank. Town Bank, 322 Wis. 2d 206. The court of appeals

held that the TCA was unambiguous and constituted the only

agreement under which Town Bank had loan obligations to City

Real Estate. Id., ¶2. First, the court of appeals concluded

that the TCA's integration clause, which neither party

challenged as ambiguous, barred the introduction into evidence

of any prior agreement to vary the terms of the TCA. Id., ¶¶11-

12. Next, the court of appeals turned to the commitment letter

No. 2008AP1845

12

and concluded that Town Bank had no additional loan obligations

thereunder because City Real Estate failed to meet its terms and

conditions. Id., ¶¶14-17. In particular, the court of appeals

found no evidence that Town Bank received a mortgage on the

Wisconsin Tower as collateral, no evidence that a credit

agreement was executed by June 25, 2004, id., ¶15, and finally,

no evidence that City Real Estate contributed $900,000 in up-

front equity, id., ¶16. As such, the court of appeals deemed

the commitment letter repudiated and held that the circuit court

erred in denying Town Bank's motion for summary judgment. Id.,

¶18.

¶30 City Real Estate petitioned this court for review,

which we granted on March 9, 2010. We now affirm.

III. STANDARD OF REVIEW

¶31 Our review of this case implicates several standards

of review. As a general matter, we are reviewing the circuit

court's denial of Town Bank's two motions for summary judgment.

Whether the circuit court properly denied summary judgment is a

question of law that we review de novo, applying the well-

recognized standards used by the circuit court and set forth in

Wis. Stat. § 802.08 (2007-08). Tatera v. FMC Corp., 2010 WI 90,

¶15, __ Wis. 2d __, 786 N.W.2d 810; Racine Cnty. v. Oracular

Milwaukee, Inc., 2010 WI 25, ¶24, 323 Wis. 2d 682, 781

N.W.2d 88. While summary judgment is considered a drastic

remedy which should not be granted when material facts are in

dispute, this court has recognized that "without doubt a trial

court can and should grant a motion for summary judgment in

No. 2008AP1845

13

those instances where the controlling material facts are not in

dispute and the application of the law to those facts is not

doubtful." Matthew v. Am. Family Mut. Ins. Co., 54 Wis. 2d 336,

339, 195 N.W.2d 611 (1972).

¶32 In this case, we are called upon to interpret the TCA.

The interpretation of an unambiguous contract presents a

question of law for this court's independent review. Admanco,

Inc. v. 700 Stanton Drive, LLC, 2010 WI 76, ¶15, 326

Wis. 2d 586, 786 N.W.2d 759. Conversely, when a contract is

ambiguous and consequently is properly construed by use of

extrinsic evidence, the contract's interpretation presents a

question of fact for the jury. Mgmt. Computer Servs., Inc. v.

Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 177, 557 N.W.2d 67

(1996).

IV. ANALYSIS

¶33 This court has long recognized the importance of

protecting parties' freedom to contract. See, e.g., Solowicz v.

Forward Geneva Nat'l, LLC, 2010 WI 20, ¶¶34, 41, 323

Wis. 2d 556, 780 N.W.2d 111; Whirlpool Corp. v. Ziebert, 197

Wis. 2d 144, 148, 539 N.W.2d 883 (1995); Watts v. Watts, 137

Wis. 2d 506, 521, 405 N.W.2d 303 (1987); Kuhl Motor Co. v. Ford

Motor Co., 270 Wis. 488, 493, 71 N.W.2d 420 (1955). When

construing contracts that were freely entered into, our goal is

"is to ascertain the true intentions of the parties as expressed

by the contractual language." State ex rel. Journal/Sentinel,

Inc. v. Pleva, 155 Wis. 2d 704, 711, 456 N.W.2d 359 (1990); see

also Solowicz, 323 Wis. 2d 556, ¶34. Stated another way, the

No. 2008AP1845

14

best indication of the parties' intent is the language of the

contract itself, Levy v. Levy, 130 Wis. 2d 523, 535, 388

N.W.2d 170 (1986), for that is the language the parties "saw fit

to use," Journal/Sentinel, 155 Wis. 2d at 711. We construe the

contract language according to its plain or ordinary meaning.

Huml v. Vlazny, 2006 WI 87, ¶52, 293 Wis. 2d 169, 716

N.W.2d 807. "If the contract is unambiguous, our attempt to

determine the parties' intent ends with the four corners of the

contract, without consideration of extrinsic evidence." Id.

Only when the contract is ambiguous, meaning it is susceptible

to more than one reasonable interpretation, may the court look

beyond the face of the contract and consider extrinsic evidence

to resolve the parties' intent. Capital Invs., Inc. v.

Whitehall Packing Co., 91 Wis. 2d 178, 190, 280 N.W.2d 254

(1979).

¶34 In this case, City Real Estate argues that the TCA is

ambiguous, and as such, the circuit court properly denied

summary judgment and directed the case to trial. In particular,

according to City Real Estate, it is not clear whether the

parties intended the TCA to be the final expression of only the

$2,500,000 acquisition financing with which the TCA dealt (and

the first of two financing phases), or whether the parties

intended the TCA to be the final expression of the parties'

financing agreement altogether. As evidence of the former, City

Real Estate points to the commitment letter and various credit

memoranda prepared by Town Bank, all of which reference a two-

phase financing arrangement.

No. 2008AP1845

15

¶35 In response, Town Bank argues that the TCA is an

unambiguous stand-alone agreement with which it fully complied

when it funded $2,500,000 to City Real Estate. Town Bank relies

on section 14 of the TCA, contending that it constitutes an

unambiguous merger clause which should have precluded City Real

Estate from introducing evidence of any prior understandings or

agreements that may have existed between the parties, including

the commitment letter.

¶36 The parties' arguments implicate the parol evidence

rule. Despite its name, the parol evidence rule is not a rule

of evidence; it is a rule of substantive contract law.

Dairyland Equip. Leasing, Inc. v. Bohen, 94 Wis. 2d 600, 607,

288 N.W.2d 852 (1980); Fed. Deposit Ins. Corp. v. First Mortg.

Investors, 76 Wis. 2d 151, 156, 250 N.W.2d 362 (1977); Conrad

Milwaukee Corp. v. Wasilewski, 30 Wis. 2d 481, 488, 141

N.W.2d 240 (1966); 6 Arthur Linton Corbin, Corbin on Contracts

§ 573, at 72-73 (interim ed. 2002). This court has stated the

parol evidence rule as follows:

When the parties to a contract embody their

agreement in writing and intend the writing to be the

final expression of their agreement, the terms of the

writing may not be varied or contradicted by evidence

of any prior written or oral agreement in the absence

of fraud, duress, or mutual mistake.

Dairyland Equip. Leasing, 94 Wis. 2d at 607 (quoting Fed.

Deposit Ins. Corp., 76 Wis. 2d at 156). Despite the rule's

complexity and criticisms, see, e.g., Fed. Deposit Ins. Corp.,

76 Wis. 2d at 156, its purpose remains sound: to promote the

integrity, reliability, and predictability of written contracts

No. 2008AP1845

16

and to reduce the threat of juries being misled or confused by

statements or negotiations that may have taken place before a

contract was entered into.

¶37 As our definition makes apparent, "[t]he real question

when a party invokes the parol evidence rule" is whether the

parties intended the written contract to be the final and

complete expression of their agreement. Id. at 157. A contract

that represents the final and complete expression of the

parties' agreement is considered fully "integrated." If the

contract is integrated, absent the existence of fraud, duress,

or mutual mistake, the court construing the contract may not

consider evidence of any prior or contemporaneous oral or

written agreement between the parties.

3

If the contract is not

integrated, then the parol evidence rule is inapplicable.

¶38 Relevant to this case, the parol evidence rule does

not preclude the court from considering evidence of any prior or

contemporaneous understandings or agreements between the parties

for the purpose of determining whether the parties intended the

contract to be integrated. Our courts often refer to this rule

3

We recognize a limited exception to the parol evidence

rule for contemporaneous or prior agreements that supplement,

but do not conflict with, the contract. See Dairyland Equip.

Leasing, Inc. v. Bohen, 94 Wis. 2d 600, 607-08, 288 N.W.2d 852

(1980). In such cases, the contract is considered "partially

integrated." Id. at 607. If the contract is shown to be only a

partial integration of the parties' overall agreement, the court

may properly consider parol evidence to establish the parties'

full agreement, so long as the parol evidence does not conflict

with the part of the contract that has been integrated. Id. at

607-08.

No. 2008AP1845

17

by stating that "'[p]arol evidence is always admissible with

respect to the issue of integration.'" See, e.g., Dairyland

Equip. Leasing, 94 Wis. 2d at 608 (quoting Fed. Deposit Ins.

Corp., 76 Wis. 2d at 158). However, to be precise, such

evidence is not "parol evidence" at all.

4

Rather, we are merely

invoking an already recognized and well-defined rule of contract

law: when a contract is ambiguous, a court may consider

extrinsic evidence to resolve the parties' intent. See Stevens

Constr. Corp. v. Carolina Corp., 63 Wis. 2d 342, 354, 217

N.W.2d 291 (1974) ("While 'parol evidence'——the circumstances

surrounding the execution of the contract and the practical

construction of the parties——may not be introduced to vary the

terms of a written contract, it may be introduced to explain

ambiguous terms of the written instrument."); Chmill v. Friendly

Ford-Mercury of Janesville, Inc., 154 Wis. 2d 407, 416, 453

4

See 6 Arthur Linton Corbin, Corbin on Contracts § 573, at

73-75 (interim ed. 2002):

The use of such a name for this [parol evidence] rule

has had unfortunate consequences, principally by

distracting the attention from the real issues that

are involved. These issues may be any one or more of

the following: (1) Have the parties made a contract?

(2) Is that contract void or voidable because of

illegality, fraud, mistake, or any other reason? (3)

Did the parties assent to a particular writing as the

complete and accurate 'integration' of that contract?

In determining these issues, or any one of them,

there is no 'parol evidence rule' to be applied. On

these issues, no relevant evidence, whether parol or

otherwise, is excluded.

(Footnotes omitted.)

No. 2008AP1845

18

N.W.2d 197 (Ct. App. 1990) ("A court may look to extrinsic

evidence to determine whether a document was intended to

incorporate the entire understanding between the parties to

it . . . ."). If and once it is determined that the parties

intended the contract to be integrated, only then does the parol

evidence rule go into effect. See Dairyland Equip. Leasing, 94

Wis. 2d at 607 ("'[E]ven if, without objection, parol evidence

of the intention of the parties to a written contract, which

conflicts with the express provisions of such contract, gets

into the record, the court must disregard it." (quoting Morn v.

Schalk, 14 Wis. 2d 307, 315, 111 N.W.2d 80 (1961))).

¶39 However, as Town Bank accurately points out, when the

contract contains an unambiguous merger or integration clause,

the court is barred from considering evidence of any prior or

contemporaneous understandings or agreements between the

parties, even as to the issue of integration. See Dairyland

Equip. Leasing, 94 Wis. 2d at 608; Matthew, 54 Wis. 2d at 341-

42. Again, this principle stems from basic contract law: if the

contract is unambiguous, the court's attempt to determine the

parties' intent ends with the language of the contract, without

resort to extrinsic evidence. See Huml, 293 Wis. 2d 169, ¶52.

In Dairyland Equipment Leasing, this court defined a merger

clause as a "written provision which expressly negatives

collateral or antecedent understandings." 94 Wis. 2d at 608.

Thus, by definition, an unambiguous merger or integration clause

demonstrates that the parties intended the contract to be a

final and complete expression of their agreement. See id.;

No. 2008AP1845

19

Matthew, 54 Wis. 2d at 341-42. The contract is therefore fully

integrated, and the parol evidence rule goes into effect.

¶40 We now turn to the facts of this case. We conclude

that the TCA is an unambiguous, fully integrated agreement with

which Town Bank fully complied. Accordingly, Town Bank should

have been granted summary judgment, and the case should not have

proceeded to a jury trial.

¶41 We agree with Town Bank that section 14 of the TCA

constitutes an unambiguous merger clause which should have

precluded City Real Estate from introducing any evidence of

prior understandings or agreements that may have existed between

the parties, including the commitment letter.

¶42 Section 14 provides:

This Agreement, including the Exhibits attached or

referring to it, the Note and the Security Documents,

are intended by Customer and Lender as a final

expression of their agreement and as a complete and

exclusive statement of its terms, there being no

conditions to the full effectiveness of their

agreement except as set forth in this Agreement, the

Note and the Security Documents.

¶43 We conclude that section 14 unambiguously demonstrates

the parties' intent to exclude additional understandings or

agreements not contained in the TCA. See Dairyland Equip.

Leasing, 94 Wis. 2d at 608. Section 14 "expressly negatives

collateral or antecedent understandings," see id., by

delineating an exhaustive list of the documents that are

included in the parties' agreement: "This Agreement" (meaning

the TCA), "the Exhibits" to the TCA, "the Note," and "the

No. 2008AP1845

20

Security Documents." Pursuant to the plain language of section

14, Town Bank and City Real Estate intended that list of

documents to comprise the "final expression of their agreement"

and the "complete and exclusive statement of its terms." Hence,

the parties intended to exclude from their final agreement any

understanding or agreement not contained within the TCA, the

exhibits, the Business Note, and the security documents.

¶44 Significantly, the language of section 14 exhibits

different capitalization to denote "this Agreement," meaning the

TCA itself, and "their agreement," meaning the parties'

agreement altogether. (Emphasis added.) When referring to the

parties' "final expression of their agreement and [] a complete

and exclusive statement of its terms," the parties carefully

utilized a lowercase "a" so as not to confuse their overall

agreement with the TCA itself. (Emphasis added.) We therefore

disagree with City Real Estate that it is not clear whether the

parties intended the TCA to be the final expression of only the

TCA itself, or whether the parties intended the TCA to be the

final expression of the parties' financing agreement altogether.

¶45 Neither the TCA, nor the exhibits to the TCA, nor the

Business Note, nor the security documents mention the commitment

letter or reference financing in two phases. To the contrary,

the Business Note provides for a single sum of $2,500,000, the

very amount that Town Bank loaned to City Real Estate on July

15, 2004. If City Real Estate wanted the terms of the

commitment letter, or a second phase of financing, to be

included in the TCA, City Real Estate was free to so negotiate.

No. 2008AP1845

21

¶46 Citing our decision in Dairyland Equipment Leasing,

City Real Estate argues that in order for the TCA to have

unambiguously excluded the terms of the commitment letter, the

TCA had to "expressly negative[]" the commitment letter or the

two-phase nature of the financing. See 94 Wis. 2d at 608. City

Real Estate's interpretation of our case law necessarily implies

that hereinafter, lenders——or all contract drafters, for that

matter——would be obligated to expressly identify and exclude in

their contracts any prior oral or written communication between

the parties that may rise to the level of an agreement, lest

risk its inclusion within the contract. We refuse to impose

such an unnecessary and cumbersome burden on contract drafters.

¶47 We further reject City Real Estate's arguments that

the TCA is otherwise ambiguous. First, City Real Estate argues

that an ambiguity arises out of the fact that the parties

checked the box for "Multiple Notes; Multiple Advances." The

argument is difficult to follow. According to City Real Estate,

the checking of that box created an obligation for multiple

notes. Because the section on "Multiple Notes; Multiple

Advances" also states that the TCA "does not constitute a

commitment by Lender to make such extensions of credit," City

Real Estate contends that the TCA implies that some other

document created the obligation for multiple notes. Therefore,

City Real Estate argues, a genuine issue of material fact

existed as to whether the commitment letter created the

obligation for multiple notes.

No. 2008AP1845

22

¶48 We disagree. The section on "Multiple Notes; Multiple

Advances" is clear. It plainly recognizes that Town Bank may

make additional extensions of credit to City Real Estate "from

time to time," and if such loans occur, the parties "agree that

sections 4 through 19 of [the TCA] shall apply to each such

extension of credit." Significantly, the provision then

expressly states that the TCA "does not constitute a commitment

by [Town Bank] to make such extensions of credit to [City Real

Estate]." Hence, while Town Bank has the option, the TCA does

not obligate Town Bank to make any additional extensions of

credit to City Real Estate.

¶49 Second, relying on Stevens Construction Corp., City

Real Estate argues that the TCA is latently ambiguous, and

therefore, the circuit court properly considered parol evidence

to clarify the ambiguity. See 63 Wis. 2d at 354-55. A

contract, though clear on its face, may be considered latently

ambiguous if its application produces absurd or unreasonable

results that the parties could not have intended. See id. at

354. City Real Estate contends that the TCA is latently

ambiguous when applied to the context of the Wisconsin Tower

project. According to City Real Estate, while an "uninformed

observer" could view the TCA as a final expression of the

parties' universal agreement, a latent ambiguity arises "as soon

as the observer learns that the parties had in place a

[c]ommitment [letter] providing for two phases of financing

necessary for the project, and that the TCA only provides for

one of those phases . . . ."

No. 2008AP1845

23

¶50 City Real Estate's argument ignores the presence of

the TCA's unambiguous merger clause. As previously explained,

because section 14 of the TCA constitutes an unambiguous merger

clause, the court is precluded from considering any prior

understanding or agreement that may have existed between Town

Bank and City Real Estate, including the commitment letter.

Thus, by its very nature, the unambiguous merger clause bars the

court from considering the TCA within the context of the

commitment letter.

¶51 Because we conclude that the TCA constitutes an

unambiguous, fully integrated agreement, our attempt to

determine the parties' intent ends with the four corners of the

TCA, without resort to extrinsic evidence. See Huml, 293

Wis. 2d 169, ¶52. Such extrinsic evidence includes, but is not

limited to, the commitment letter and various credit memoranda

prepared by Town Bank that referenced a two-phase financing

arrangement. Pursuant to the TCA, Town Bank was obligated to

loan $2,500,000 to City Real Estate. Town Bank fully complied.

Therefore, Town Bank should have been granted summary judgment,

and the case should not have proceeded to a jury trial.

¶52 Even assuming, without deciding, that the commitment

letter constitutes a separate and enforceable contract for

No. 2008AP1845

24

financing,

5

Town Bank was within its rights to terminate the

agreement and therefore was still entitled to summary judgment.

It is undisputed that City Real Estate did not fulfill at least

two of the conditions set forth in the commitment letter: the

requirement that a credit agreement be executed by June 25,

2004, and the obligation to contribute $900,000 in up-front

equity.

¶53 First, it is undisputed that a credit agreement

between Town Bank and City Real Estate was not executed by June

25, 2004, as required by the commitment letter. The commitment

letter expressly provides that "[t]his commitment may be

terminated at the sole option of Town Bank if the credit

agreement is not executed by June 25, 2004." There is no

question that the TCA, the only credit agreement between Town

Bank and City Real Estate, was not executed until July 15, 2004.

Because the credit agreement was not timely executed, Town Bank

was well within its rights to terminate the commitment letter.

¶54 Second, it is undisputed that City Real Estate did not

fulfill its obligation to contribute $900,000 in up-front

5

Deciding that the commitment letter constitutes an

enforceable contract could result in unforeseen consequences.

Assuming that the commitment letter constitutes an enforceable

contract, the contract binds and is enforceable against both

parties: the lender and the borrower. See Levin v. Perkins, 12

Wis. 2d 398, 403, 107 N.W.2d 492 (1961). Suppose that after a

commitment letter has been executed, the borrower secures a

better financing arrangement with a different lender. If the

commitment letter constitutes an enforceable contract, the

original lender could enforce the commitment letter against the

borrower and seek damages for, inter alia, lost interest.

No. 2008AP1845

25

equity. The commitment letter provides that the "[c]losing of

[the] loan is contingent upon but not limited to the following:

. . . B. Borrower agrees to contribute $900,000 in up front

equity capital prior to closing." City Real Estate does not

dispute that it never infused $900,000 of equity into the

Wisconsin Tower project. Instead, City Real Estate complains

that Town Bank never demanded the money: "[City Real Estate]

w[as] ready, willing, and able to [satisfy the up-front equity

condition] upon demand once the project progressed to the point

of requiring draws upon the Phase II construction financing to

build pre-sold condominiums." City Real Estate's defense falls

short in two respects. First, Town Bank did not have to demand

the $900,000 from City Real Estate; the contingency outlined in

the commitment letter functioned as the demand. Second, the

commitment letter required City Real Estate to contribute

$900,000 in equity "prior to closing," well before the project

progressed to the construction phase.

¶55 Because it is undisputed that City Real Estate failed

to comply with at least two of the conditions set forth in the

commitment letter, Town Bank was under no obligation to provide

financing thereunder.

V. CONCLUSION

¶56 We conclude that the TCA is an unambiguous, fully

integrated agreement with which Town Bank fully complied.

Accordingly, Town Bank should have been granted summary

judgment, and the case should not have proceeded to a jury

trial. We agree with Town Bank that the TCA contains an

No. 2008AP1845

26

unambiguous merger clause which precluded City Real Estate from

introducing any evidence of prior understandings or agreements

that may have existed between the parties, including the

commitment letter. Even assuming, without deciding, that the

commitment letter constitutes a separate and enforceable

contract for financing, we conclude that Town Bank was within

its rights to terminate the agreement. It is undisputed that

City Real Estate did not fulfill at least two of the conditions

set forth in the commitment letter.

By the Court.—The decision of the court of appeals is

affirmed.

No. 2008AP1845.awb

1

¶57 ANN WALSH BRADLEY, J. (dissenting). I agree with

the Wisconsin Bankers Association and the court of appeals that

"this case does not involve one agreement superseding another.

It involves two separate, independent agreements that do not in

any way involve each other."

¶58 I also agree with the Wisconsin Bankers Association

and the court of appeals that "the TCA is a stand-alone

agreement . . . [that] must be interpreted on its terms with

respect to the [$2.5 million loan], and the Commitment must be

interpreted separately on its terms with respect to the proposed

financing addressed in the Commitment."

¶59 The majority, however, disagrees. Rather than

treating the TCA and the Commitment as two separate contracts

which must be interpreted independently, it interprets the TCA

as the final agreement with an integration clause that replaces

the separate Commitment agreement. In fact, the majority warns

that treating the two agreements as separate could have

"unforeseen consequences." Majority op., ¶52 n.5.

¶60 In this regard, I conclude that the analysis of the

Wisconsin Bankers Association and the court of appeals is more

persuasive and should be controlling. It is, I fear, the

approach of the majority that has the potential to yield

"unforeseen consequences" for the day-to-day practices of the

banking industry. Because the majority's analysis introduces

uncertainty in the lending process and creates uncertainty in

well-established law, I respectfully dissent.

I

No. 2008AP1845.awb

2

¶61 The majority accurately sets forth the question before

the court: whether Town Bank has a obligation to lend $6.5

million in Phase II financing under the terms of the Commitment.

See majority op., ¶¶21-22.

1

In answering this question, however,

the majority does not focus on the terms of the Commitment.

Rather, its focus shifts to the terms of the Term Credit

Agreement (TCA), and specifically, to the TCA's "Entire

Agreement" clause. See id., ¶40 ("[T]he TCA is an unambiguous,

fully integrated agreement with which Town Bank fully

complied.").

¶62 The majority concludes that the TCA's "Entire

Agreement" clause evinces the parties' intent to "exclude from

their final agreement any understanding or agreement not

contained within the TCA, the exhibits, the Business Note, and

the security documents." Id., ¶43. It determines that whenever

a contract "contains an unambiguous merger or integration

clause, the court is barred from considering evidence of any

prior or contemporaneous understandings or agreements between

the parties, even as to the issue of integration." Id., ¶39.

¶63 Thus, although City Real Estate seeks to enforce the

Commitment, the majority determines that the Commitment may not

be considered by a court due to the terms of the TCA. The

implication of this analysis is that any written contract with

1

The majority explains that Town Bank sought "a declaratory

judgment that City Real Estate failed to satisfy its obligations

under the commitment letter" and that "City Real Estate

counterclaimed for damages arising out of Town Bank's alleged

breach of the commitment letter." Majority op., ¶¶21-22.

No. 2008AP1845.awb

3

an unambiguous integration clause necessarily supersedes all

existing agreements between the parties, unless the integration

clause specifically references an existing agreement. Under the

majority's analysis, the TCA and the Commitment are intertwined—

—the parties do not have any obligations under the Commitment

because the Commitment was superseded by the TCA, as evinced by

the TCA's integration clause.

II

¶64 The majority's conclusion that an unambiguous

integration clause replaces any existing agreement not

specifically referenced is directly contrary to the position

advocated by the Wisconsin Bankers Association.

2

The Wisconsin

Bankers Association contends that "this case does not involve

one agreement superseding another," and that the TCA and the

Commitment are "separate, independent agreements that do not in

any way involve each other."

3

¶65 The Wisconsin Bankers Association repeatedly argues

that the TCA and the Commitment are independent agreements that

2

When we accepted review of this case, the Wisconsin

Bankers Association requested permission to file an amicus

brief. It explained that the appeal presented issues "of

particular interest to the" Wisconsin Bankers Association

because "[t]he Term Credit Agreement utilized by the parties is

a form sold by a [Wisconsin Bankers Association] subsidiary to

lenders in the state" and "[h]undreds of lenders and thousands

of term credit lending arrangements are entered into using this

form." Motion of Wisconsin Bankers Association for Leave to

File Brief as Amicus Curiae ¶¶2-3.

3

Brief of the Wisconsin Bankers Association as Amicus

Curiae at 8.

No. 2008AP1845.awb

4

must be interpreted separately.

4

Its concern is that City Real

Estate attempts to read the terms of the Commitment into the

TCA: "[Our] only concern is that the borrower should not be able

to find support for its argument that Town Bank breached its

obligations under the Commitment by somehow reading the terms of

the Commitment into the completely independent Term Credit

Agreement."

5

It argues that the effect of the TCA's unambiguous

integration clause is to put both parties on notice "that any

other agreement that might be out there, whatever it may be, is

not part of" the TCA.

6

¶66 To this end, the Wisconsin Bankers Association

contends: "The Term Credit Agreement stands on its own. The

Commitment stands on its own."

7

It asserts that "[t]he TCA must

be interpreted on its terms with respect to the [$2.5 million

loan], and the Commitment must be interpreted separately on its

terms with respect to the proposed financing addressed in the

4

The Wisconsin Bankers Association explains that Town Bank

entered into a separate TCA with City Real Estate to make the

$2.5 million loan. "Whether or not City fulfilled [the

conditions set forth in the Commitment] and is entitled to

damages for Bank's failure to lend is a question of

interpretation of the Commitment." Id. at 4.

5

Motion of Wisconsin Bankers Association for Leave to File

Brief as Amicus Curiae ¶5. At various times throughout this

litigation, City Real Estate appeared to argue that the TCA's

"multiple notes" clause supported its contention that the

Commitment was a binding contract. The Bankers Association

objected to City Real Estate's attempt to bootstrap its claim

for damages under the Commitment to the "multiple notes" clause

in the TCA.

6

Id., ¶6.

7

Id., ¶5.

No. 2008AP1845.awb

5

Commitment."

8

According to the Wisconsin Bankers Association,

the terms of the TCA are not relevant when interpreting the

Commitment: "Whether or not City fulfilled [the Commitment's]

conditions and is entitled to damages for the Bank's failure to

lend is a question of interpretation of the Commitment."

9

¶67 The majority's conclusion that the court is barred

from considering the Commitment due to the TCA's integration

clause is incompatible with the Wisconsin Bankers Association's

assertion that the TCA and the Commitment are "separate,

independent agreements that do not in any way involve each

other." This conclusion introduces uncertainty in contractual

relationships far beyond the contours of this case.

¶68 As explained by the Wisconsin Bankers Association, the

situation presented in this case is "quite common throughout the

state."

10

At any given time, there may exist a number of

separate, independent agreements between a borrower and a bank:

Banks often have a variety of outstanding loans to

individuals and their related interests, as well as

agreements for other banking services with those

parties. A bank could have several loans to a

borrower, could be negotiating the refinancing of some

8

Brief of the Wisconsin Bankers Association as Amicus

Curiae at 8.

9

Id. at 4. When it filed its motion for leave to file an

amicus brief, the Wisconsin Bankers Association asserted that it

had "no opinion on whether or not the Commitment was repudiated

by the borrower's failure to fulfill conditions precedent to the

construction loan." Motion of Wisconsin Bankers Association for

Leave to File Brief as Amicus Curiae ¶5.

10

Motion of Wisconsin Bankers Association for Leave to File

Brief as Amicus Curiae ¶3; see also Brief of the Wisconsin

Bankers Association as Amicus Curiae at 1.

No. 2008AP1845.awb

6

of those loans, and at the same time could be

negotiating different commitments for upcoming

projects.

11

¶69 The majority's determination that a written contract

containing an unambiguous integration clause replaces all

existing agreements between the parties may yield undesirable

and unforeseen consequences. Parties may find that by signing a

form agreement, they have put into question the enforceability

of any other outstanding agreements between them——without having

intended to do so.

12

Before drafting a new contract, must a loan

11

Brief of the Wisconsin Bankers Association as Amicus

Curiae at 9.

12

Imagine the following hypothetical, based on the facts of

this case. Town Bank and City Real Estate execute a term credit

agreement ("TCA I") for $2.5 million in Phase I financing.

Several months later, Town Bank agrees to go ahead with Phase II

financing. Town Bank and City Real Estate execute a second term

credit agreement ("TCA II") for a $6.5 million loan.

TCA II contains an "Entire Agreement" clause which provides

as follows:

This Agreement, including the Exhibits attached or

referring to it, the Note [for $6.5 million] and the

Security Documents, are intended by Customer and

Lender as a final expression of their agreement and as

a complete and exclusive statement of its terms, there

being no conditions to the full effectiveness of their

agreement except as set forth in this Agreement, the

Note and the Security Documents.

TCA II, the Note, and the Security Documents make no reference

to TCA I or the terms of the $2.5 million Phase I loan.

No. 2008AP1845.awb

7

officer now review all other existing agreements and enumerate

them in the new contract to ensure that the new contract does

not inadvertently supersede those existing agreements?

¶70 The Wisconsin Bankers Association called City Real

Estate's interpretation of the integration clause "radical,"

"absurd," and "impractical" because it would require the parties

to "expressly negative" any other existing agreements: "City is

requesting a radical new interpretation of integration clauses.

It wants this Court to require the integration clause to

'expressly negative' the Commitment in order to have the terms

of the Commitment excluded from the terms of the

[TCA]. . . . This is an absurd and very impractical request."

13

¶71 Yet, the majority's conclusion is the mirror image of

City Real Estate's request, and it leads to the same absurd and

impractical result. Rather than requiring drafters to

"expressly negative" any existing agreements, the majority

requires drafters to "expressly affirm" their existing

agreements if they wish to prevent those agreements from being

superseded.

Imagine that City Real Estate defaults on its obligations

under TCA I, and Town Bank files suit to enforce its terms.

Could City Real Estate argue that that TCA I was no longer

enforceable because it had been superseded by TCA II? According

to the majority's analysis in this case, such an argument may be

viable——TCA II "contains an unambiguous [] integration clause,

[therefore] the court is barred from considering evidence of

[TCA I, which is a] prior [] agreement[] between the parties."

See majority op., ¶39.

13

Brief of the Wisconsin Bankers Association as Amicus

Curiae at 7.

No. 2008AP1845.awb

8

¶72 Such a requirement may create traps for the unwary.

Signing a contract with an unambiguous integration clause does

not necessarily evince an intent to supersede all existing

agreements. Parties sign contracts all the time without

thinking it necessary to enumerate (and thereby preserve) any

existing agreements between them.

¶73 Nevertheless, this requirement is driven by the

majority's analysis. Its decision may "result in completely

unnecessary effort on the part of parties when drafting a

contract, and build into contracts the very ambiguity and

uncertainty the parol evidence rule is intended to remove."

14

III

¶74 The majority's analysis is flawed not only because it

introduces uncertainty into the lending process, but also

because it creates uncertainty in what has been the well-

established law. We have repeatedly explained that "[p]arol

evidence is always admissible with respect to the issue of

integration[.]"

15

The reason underlying this rule is that a

court cannot determine from the four corners of a contract

whether the parties intended it to be a complete integration, a

partial integration, or no integration whatsoever. "[A] writing

14

Id. at 2.

15

Dairyland Equip. Leasing v. Bohen, 94 Wis. 2d 600, 608,

288 N.W.2d 852 (1980); Fed. Deposit Ins. Corp. v. First Mortg.

Investors, 76 Wis. 2d 151, 158, 250 N.W.2d 362 (1977); Johnson

Hill's Press v. Nasco Indus., 33 Wis. 2d 545, 550, 148 N.W.2d 9

(1967); Brevig v. Webster, 88 Wis. 2d 165, 173, 277 N.W.2d 321

(Ct. App. 1979); see also Scarne's Challenge, Inc. v. M.D. Orum

Co., 267 Wis. 134, 64 N.W.2d 836 (1954).

No. 2008AP1845.awb

9

cannot of itself prove its own completeness[.]" Restatement

(Second) of Contracts § 210 cmt. b (1981); see also id. § 214

cmt. a.

¶75 On one hand, the majority embraces this time-honored

rule, while on the other hand it embraces an opposite or a

different rule. Unfortunately, the majority's inconsistency is

demonstrated not only from paragraph to paragraph, but also the

inconsistency exists within the very same paragraph.

¶76 Citing several cases, the majority sets forth the

time-honored rule: "the parol evidence rule does not preclude

the court from considering evidence of any prior or

contemporaneous understandings or agreements between the parties

for the purpose of determining whether the parties intended the

contract to be integrated. Our courts often refer to this rule

by stating that 'parol evidence is always admissible with

respect to the issue of integration.'" Majority op., ¶38

(emphasis added).

¶77 In the very same paragraph the majority appears to

embrace the exact opposite of the rule, i.e., that parol

evidence is never admissible with respect to the issue of

integration. It appears to assert that the rule comes into play

only after the issue of integration has already been determined:

"If and once it is determined that the parties intended the

contract to be integrated, only then does the parol evidence

rule go into effect." Id.

¶78 The first sentence of the following paragraph sets

forth yet a different rule. Rather than being always admissible

No. 2008AP1845.awb

10

on the issue of integration, it is only sometimes admissible,

i.e. admissible when there is an integration clause that is

ambiguous. The majority states: "[W]hen the contract contains

an unambiguous merger or integration clause, the court is barred

from considering evidence of any prior or contemporaneous

understandings or agreements between the parties, even as to the

issue of integration." Id., ¶39.

¶79 So what is the rule? Is it the time-honored rule that

the majority purports to embrace——that parol evidence is always

admissible with respect to the issue of integration? Is it

never admissible on the issue of integration? Or is it only

sometimes admissible on the issue of integration when an

integration clause is ambiguous? The majority gets tangled up

in its analysis because it conflates the general rules of

contract interpretation with the specific rule of parol evidence

associated with the interpretation of an integration clause.

16

IV

¶80 When I examine this case, I apply the time-honored

rule that parol evidence is always admissible with respect to

the issue of integration. Like the Wisconsin Bankers

Association and the court of appeals, I conclude that the

Commitment is a separate agreement from the TCA and it must be

interpreted according to its terms.

16

For a discussion of the dangers of conflating principles

of contract interpretation with the parol evidence rule, see

Margaret N. Kniffin, Conflating and Confusing Contract

Interpretation and the Parol Evidence Rule: Is the Emperor

Wearing Someone Else's Clothes?, 62 Rutgers L. Rev 75 (2009-

2010).

No. 2008AP1845.awb

11

¶81 The question of whether City Real Estate repudiated

the Commitment by failing to satisfy its conditions precedent

presented questions of fact which were decided by the jury.

After hearing some evidence that City Real Estate failed to

fulfill the Commitment's conditions, the jury nevertheless

determined that under these circumstances, it was Town Bank that

breached the Commitment. An appellate court will sustain a jury

verdict if there is any credible evidence to support it.

Hoffman v. Wisconsin Elec. Power Co., 2003 WI 64, ¶9, 262

Wis. 2d 264, 664 N.W.2d 55. Here, there is credible evidence in

the record to support the jury's verdict.

¶82 Because the majority's analysis is incompatible with

and less persuasive than the analysis advanced by the Wisconsin

Bankers Association, because it may introduce uncertainty in

contractual relationships far beyond the contours of this case,

and because it creates uncertainty in what has been the well-

established law, I respectfully dissent.

¶83 I am authorized to state that Chief Justice SHIRLEY S.

ABRAHAMSON joins this dissent.

No. 2008AP1845.awb

1