The opinion of the court was delivered by: LUONGO
In 1978, Ypsi-Ann undertook to develop a shopping center in Washtenaw County, Michigan. Following the usual practice among developers, Ypsi-Ann sought construction financing from commercial banks to erect the center, and long-term permanent financing from insurance companies and savings institutions after construction. In seeking financing for the project, Ypsi-Ann was assisted by Pennamco, Inc., a wholly-owned subsidiary of First Pennsylvania Corporation, a bank holding company whose principal subsidiary is defendant First Pennsylvania Bank. Part of Pennamco's business was to generate out-of-state loans for First Pennsylvania Bank, which, under the National Banking Act, 12 U.S.C. § 36, cannot have out-of-state branches.
Pennamco's work on the proposed shopping center was performed by Joseph Grosz, a Vice-President in Pennamco's Chicago office. In July, 1978, Grosz forwarded to John Hancock Mutual Life Insurance Company an application for permanent financing of the center. On July 26, 1978, Hancock issued a commitment for a permanent loan of $ 2,675,000 for the center, for which it charged Ypsi-Ann a loan commitment fee of 2% of the amount of the loan, or $ 53,500. Hancock's commitment was conditioned upon Ypsi-Ann obtaining construction financing from a lender satisfactory to Hancock. Grosz then sought construction financing from First Pennsylvania.
On October 31, 1978, First Pennsylvania offered construction financing in an amount equal to the permanent financing, in return for a loan commitment fee of 1%, or $ 26,750. Several terms in the proposed commitment were then negotiated by the parties, and the commitment was finalized on December 18, 1978. First Pennsylvania's commitment was conditioned, inter alia, upon "(evidence) of satisfactory compliance with all the terms and conditions of the Permanent Commitment ...." Letter of John Jemison, Vice-President, First Pennsylvania Bank, October 31, 1978, P (6)(h), Exhibit "C", plaintiffs' complaint. First Pennsylvania's commitment letter further provided that its 1% fee was "earned" as of the date the commitment was issued, in "consideration of Lender holding itself ready, willing, and able to make the Loan and in further consideration of the substantial services which Lender has rendered," and that the commitment fee was to be retained by First Pennsylvania as "liquidated damages" in the event that Ypsi-Ann failed to close the loan. Id. P 4.
On April 9, 1979, Hancock notified Ypsi-Ann that it was cancelling its permanent loan commitment because Ypsi-Ann was in default on several points, and because of changes in the economy which resulted in the proposed loan's failing to meet Hancock's underwriting criteria. Although Hancock, like First Pennsylvania, had a clause in its commitment letter permitting it to retain the commitment fee in the event that the loan did not close, it returned the full commitment fee to Ypsi-Ann upon cancellation. The project could not proceed without permanent financing, and as a result Ypsi-Ann fell into default on its construction loan agreement with First Pennsylvania. As noted above, Ypsi-Ann then requested that First Pennsylvania do as John Hancock had done, return the commitment fee, and when it refused, Ypsi-Ann instituted this action.
Ypsi-Ann has advanced a number of theories to support its contention that it is entitled to recover all or part of the loan commitment fee. These theories are set forth in seven counts, some of which I shall address jointly because they raise similar grounds for relief.
Ypsi-Ann's theory in this regard is a contractual one, which turns upon the terms of the commitment letters issued by First Pennsylvania and by Hancock, and the legal effect to be given to them. The construction to be given the purported contract is an issue for the court to decide as a matter of law. Haskins v. Point Towing Co., 421 F.2d 532 (3d Cir. 1970), cert. denied, 400 U.S. 834, 91 S. Ct. 68, 27 L. Ed. 2d 66 (1970); Associated Hardware Supply Co. v. Big Wheel Distributing Co., 355 F.2d 114 (3d Cir. 1965).
In support of its theory that First Pennsylvania and Hancock should be considered as co-venturers in financing the shopping center, Ypsi-Ann first relies upon the language of the respective loan commitments. Ypsi-Ann points out that each lender conditioned its loan commitment on Ypsi-Ann's obtaining a loan commitment from the other; First Pennsylvania's commitment letter conditioned the loan upon a buy-sell agreement between itself and Hancock, whereby Hancock would discharge Ypsi-Ann's debt to First Pennsylvania upon completion of construction; both commitment letters provided for a loan commitment fee which was non-refundable in the event that the loan did not close; and both commitment letters required Ypsi-Ann to pay all incidental expenses in connection with processing the loan application. I disagree with Ypsi-Ann that the similarities and cross-references in the letters have any legal significance.
As Ypsi-Ann concedes, the clauses which it cites in the respective commitment letters were standard in the banking industry. See First National State Bank v. Commonwealth Federal Savings and Loan Association, 610 F.2d 164 (3d Cir. 1979). Therefore it is hardly surprising that the commitment letters are similar, any more than it would be surprising to learn that many different landlords employ the same standard form lease. Likewise, the fact that First Pennsylvania named John Hancock as the permanent lender in its commitment letter is hardly unusual, because Hancock had already made its commitment as permanent lender before First Pennsylvania was approached as the construction lender, and Ypsi-Ann does not dispute that it is standard practice for both the construction and permanent lender to condition their respective commitments on the borrower's compliance with the terms of the other lender.
Ypsi-Ann attaches special significance to the buy-sell agreement in First Pennsylvania's letter whereby Hancock agreed to "purchase" the loan from First Pennsylvania upon completion of construction on the project. I accept First Pennsylvania's contention that rather than establish a joint venture between Hancock and First Pennsylvania, the buy-sell clause establishes that there were two independent lenders concerned with separate phases of the project. The purpose of the buy-sell clause was clearly to allow First Pennsylvania to terminate its involvement in the shopping center once construction was finished. Rather than involve First Pennsylvania and Hancock in the project jointly, the buy-sell arrangement was the means by which First Pennsylvania's role as mortgagee would be assumed by Hancock.
In short, the similarities between and cross-references in the commitment letters reflect nothing more than that First Pennsylvania and Hancock pursued similar, albeit different, investments in the same project, ...