Safar v. Wells Fargo Bank, N.A.

This is a broken construction case. Yvan Safar as owner of Safar Construction, Inc. (Safar) contracted with developer Per Bjornn-Roli as owner of Norway Estates, LLC (Northway) to construct six units of a twelve unit condominium project in Girdwood for a “not to exceed” proce of $2,990,434. Wells Fargo Bank agreed to loan up to $3.3 million to Norway to finance the project. The loan funds were all disbursed, but the units were not complete. Safar contended that the Wells Fargo loan officer promised that he would be reimbursed if he continued construction using his personal funds. The loan officer denied making any such promise. Safar alleged damages of at least $500,000 for personal funds advanced to continue the project on a theory of promissory estoppel. After a bench trial, the superior court found that Wells Fargo made no enforceable promise to Safar to reimburse him, dismissed his claims with prejudice, and entered judgment for Wells Fargo.

The case turns on whether it meets the requirements for promissory estoppel. The Supreme Court points out that the first element of promissory estoppel is an “actual promise” that induced action or forbearance. Since the superior court found that this element was not met, the Supreme Court reviews the superior court’s findings of fact for clear error, giving particular deference to those based primarily on oral testimony. Of particular import was the finding that Safar could not articulate the details of the alleged commitment such as “the amount of the loan, the terms of repayment, the security, the interest rate, or even if the bank’s supposed commitment was a loan or a gift. Finding no clear error, the superior court is affirmed.

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