First National Bank of Logansport v. Logan Manufacturing Co.

Garrett and Moore (plaintiffs) sought to buy and relocate a failing business, Winamac Plastics Drinkwear, from Michigan to Indiana, and obtained a $100,000 loan from First National Bank of Logansport (defendant) through bank representative Max Brandt, with $80,000 earmarked for the acquisition. When a separate business-loan application for the relocated company was denied, Brandt repeatedly assured Garrett and Moore the Bank would still help finance the equipment purchase and encouraged them to keep moving the business to Indiana. Brandt then processed a new loan application, obtained approved letters of commitment (which for the first time required a state guarantee, which Brandt assured them wouldn't be a problem), but the Bank ultimately refused to close on either loan. Unable to secure alternate financing until 1987, Garrett and Moore sued for damages including lost profits, lost equipment, and out-of-pocket relocation expenses of $73,080; the trial court awarded all three categories, and the court of appeals affirmed lost profits, reversed lost equipment as unforeseeable, and reversed out-of-pocket expenses as duplicative of lost profits.