Uptown Heights Associates Limited Partnership v. Seafirst Corp.

Uptown Heights Associates Limited Partnership (Uptown) (plaintiff) borrowed $7.5 million from Seafirst Corp. (defendant) to build an apartment complex. Rental rates decreased in the area, and Uptown could not make its loan payments to Seafirst. Seafirst agreed to one payment extension. When another default occurred, Seafirst refused to provide another extension. Seafirst then initiated foreclosure proceedings against Uptown. Because Uptown secured a prospective buyer who was willing to pay up to $8.6 million for the property, Uptown asked Seafirst to postpone the foreclosure proceedings. Uptown told Seafirst that if buyers knew the property was subject to foreclosure, they would wait for the foreclosure to occur and buy the property for a lower price. Seafirst refused to postpone the foreclosure, and although the property was appraised for $8.85 million, Seafirst bought the property at the sale for $7.8 million, the amount Uptown still owed on the loan. Seafirst then sold the property to Uptown’s prospective buyer for $7.8 million, and Uptown missed out on the nearly $1 million profit. Uptown then sued Seafirst for breach of the contractual duty of good faith and fair dealing and tortious interference with economic relations. The circuit court dismissed both claims. The court of appeals affirmed the dismissal of the contract claim but reversed the dismissal of the tort claim.