Lincoln National Life Insurance Co. v. NCR Corp.

NCR Corp. (defendant) planned to build a new headquarters and sought a loan from Lincoln National Life Insurance Co. (Lincoln) (plaintiff) to finance the construction. Lincoln issued a mortgage loan commitment to NCR that set the loan at $14,000,000 at an interest rate of nearly 10 percent. The commitment letter did not require a nonrefundable fee to protect Lincoln if NCR did not borrow Lincoln’s money, although Lincoln received a $50,000 good-faith deposit that was returned to NCR after the parties signed the commitment letter. After the commitment letter was signed, and before the loan was consummated, NCR reconsidered taking Lincoln’s loan because NCR discovered a cash surplus of $200,000,000 and interest rates had declined. NCR notified Lincoln that it wanted to cancel the loan or renegotiate the interest rate. Lincoln responded that NCR had entered into an enforceable contract to take the loan. However, Lincoln used the money it planned to loan to NCR and made other investments. Lincoln then sued NCR for breach of contract and claimed damages of $1,200,000 for lost profits and interest. The District Court for the Northern District of Indiana held that the loan commitment was a contract that NCR breached, but that Lincoln failed to prove damages. NCR appealed the finding that the loan commitment was a contract, and Lincoln appealed the finding that it suffered no damages.