Advantor Capital Corp. v. Yeary, s. 96-6400

• Citation: 136 F.3d 1259
• Decision Date: 18 February 1998
• Docket Number: 96-6408 and 97-6106,Nos. 96-6400,s. 96-6400
• Parties: 98 CJ C.A.R. 1135 ADVANTOR CAPITAL CORPORATION, a Delaware corporation, formerly known as Sonitrol Financial Corporation, Plaintiff-Appellee and Cross-Appellant, v. James Harrison YEARY; Sonitrol of Oklahoma City Inc., an Oklahoma corporation, Defendants-Appellants and Cross-Appellees, and Linda Jensen Yeary, Defendant-Appellee. ADVANTOR CAPITAL CORPORATION, a Delaware corporation, formerly known as Sonitrol Financial Corporation, Plaintiff-Appellee, v. James Harrison YEARY; Sonitrol of Oklahoma City Inc., an Oklahoma corporation, Defendants-Appellants, and Linda Jensen Yeary, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1259

136 F.3d 1259

98 CJ C.A.R. 1135

ADVANTOR CAPITAL CORPORATION, a Delaware corporation, formerly known as Sonitrol Financial Corporation, Plaintiff-Appellee and Cross-Appellant, v. James Harrison YEARY; Sonitrol of Oklahoma City Inc., an

Oklahoma corporation, Defendants-Appellants and

Cross-Appellees,

and

Linda Jensen Yeary, Defendant-Appellee.

ADVANTOR CAPITAL CORPORATION, a Delaware corporation, formerly known as Sonitrol Financial Corporation, Plaintiff-Appellee, v. James Harrison YEARY; Sonitrol of Oklahoma City Inc., an

Oklahoma corporation, Defendants-Appellants,

and

Linda Jensen Yeary, Defendant.

Nos. 96-6400, 96-6408 and 97-6106.

United States Court of Appeals Tenth Circuit.

Feb. 18, 1998.

Kenneth I. Jones, Jr., Jones & Blaney, Oklahoma City, OK, for appellants.

Terry McCollough, Terry McCollough P.A., Orlando, FL (John B. Heatly, Fellers, Snider, Blankenship, Barley & Tippens, Oklahoma City, OK, with him on the brief), for appellees.

Before SEYMOUR, Chief Judge, EBEL, and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

Defendants James Yeary and Sonitrol of Oklahoma City, Inc., appeal the district court's denial of their motion for judgment as a matter of law on plaintiff Advantor Capital Corporation's fraud and abuse of process claims, and the court's entry of judgment on those claims. Advantor cross-appeals the court's denial of its motion for judgment as a matter of law on defendants' counterclaim. ¹ We affirm.

I.

In December 1986, Sonitrol Financial Corporation and its parent, Sonitrol Corporation commenced case No. 86-2703-A against Sonitrol of Oklahoma City, Inc., in federal district court. ² The parties and James and Linda Yeary, stockholders of Sonitrol of Oklahoma City, entered into a settlement agreement whereby Sonitrol of Oklahoma City executed two promissory notes to Sonitrol Financial for $337,169.39 and $94,096. The district court entered consent judgments for Sonitrol Corporation and against Sonitrol of Oklahoma City which totaled the sum of the two promissory notes. In January 1993, Sonitrol Corporation and Sonitrol Financial commenced various garnishment and execution proceedings to enforce the consent judgments. At a hearing concerning his assets, James Yeary testified that no one was holding any property in trust for Sonitrol of Oklahoma City. Kline & Kline, counsel for Sonitrol of Oklahoma City, also represented there were no records of property being held in trust for Sonitrol of Oklahoma City by any third party.

A garnishee summons was issued to Sonitrol of Oklahoma City and to Kline & Kline. Counsel did not answer the summons but moved for a temporary restraining order on behalf of the Yearys in case No. 93-1247-A, a bankruptcy adversary proceeding, to restrain further collection efforts against Sonitrol of Oklahoma City. Counsel asserted the validity of the judgments in 86-2703-A was subject to the bankruptcy proceeding and that it held $150,000 in trust for the Yearys individually, not for Sonitrol of Oklahoma City. The court issued the TRO, preventing Sonitrol Financial from reaching the funds in the trust account.

Sonitrol Financial moved to dissolve the TRO and the court granted its motion on March 2, 1994, finding there had been a "misrepresentation of material facts in obtaining the issuance of" the TRO, and further the TRO had expired on December 17, 1993. There was evidence the money Kline & Kline held in trust was for Sonitrol of Oklahoma City. Sonitrol Financial eventually recovered the money in the trust account. Sonitrol Financial entered into a stipulation with the Yearys in 93-1247-A. The Yearys agreed to dismiss with prejudice all of their claims against Sonitrol Financial, including the Yearys' counterclaim, and to "waive all rights, if any, to stay execution or otherwise impede [Sonitrol Financial] from obtaining satisfaction of the judgments." Appellants' Suppl. App. 369.

Advantor, formerly known as Sonitrol Financial, filed the instant action, alleging claims for the wrongfully-entered restraining order, fraud, malicious prosecution, and abuse of process against the Yearys and Sonitrol of Oklahoma City. In addition, it sought punitive damages from James Yeary and Sonitrol of Oklahoma City, and sought to collect on its $94,096 note from Sonitrol of Oklahoma City. The Yearys and Sonitrol of Oklahoma City answered and asserted several affirmative defenses as well as a counterclaim seeking declaratory judgment. Advantor moved for judgment as a matter of law on the counterclaim, contending the parties' stipulation in 93-1247-A precluded consideration of the counterclaim. The court denied the motion.

The trial of this case began on October 22, 1996. Defendants moved for judgment as a matter of law following the close of Advantor's case and the court granted the motion as to Advantor's wrongfully-entered restraining order claim. Following the close of all evidence at trial, defendants renewed their motion for judgment as a matter of law and the court granted the motion as to Linda Yeary, but denied the balance of defendants' motion seeking judgment on the abuse of process, fraud, and malicious prosecution claims. The court also denied Advantor's renewed motion for judgment as a matter of law. The jury returned a verdict for Advantor on its abuse of process and fraud claims, but found for defendants on the malicious prosecution claim. The jury awarded actual damages of $88,400 and punitive damages of $100,000, but found Sonitrol of Oklahoma City had paid in full its $94,096 note to Advantor.

II.

Defendants' Motions for Judgment as a Matter of law

We review de novo the district court's determination of a motion for judgment as a matter of law, applying the same standard as the district court. Mason v. Oklahoma Turnpike Auth., 115 F.3d 1442, 1450 (10th Cir.1997). The standard is essentially identical to the "genuine issue" requirement in the summary judgment context. Pendleton v. Conoco Inc., 23 F.3d 281, 286 (10th Cir.1994). Judgment as a matter of law is warranted "only if the evidence points but one way," Mason, 115 F.3d at 1450, and "[t]he evidence and inferences therefrom must be construed most favorably to the nonmoving party." Wolfgang v. Mid-America Motorsports, Inc., 111 F.3d 1515, 1522 (10th Cir.1997). Further, judgment as a matter of law is appropriate if there is no legally sufficient evidentiary basis with respect to a claim or defense under the controlling law. Mason, 115 F.3d at 1450.

Submission of fraud claim to jury

Defendants argue that, as a matter of law, no cause of action exists with regard to fraud, misrepresentation, or perjury in connection with underlying litigation. They cite W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 770 n. 14, 103 S.Ct. 2177, 2185 n. 14, 76 L.Ed.2d 298 (1983), for the proposition that a party injured by the issuance of an injunction later determined to be erroneous has no action for damages in the absence of a bond. The district court granted summary judgment to defendants on Advantor's wrongful restraining order claim, however, and Advantor does not appeal that ruling. Therefore, Grace is not relevant here.

Defendants also cite Morgan v. Graham, 228 F.2d 625, 627 (10th Cir.1956), where this court held that, in the absence of a statute to the contrary, an unsuccessful litigant who lost his case because of perjured testimony may not maintain a civil action against the person who committed the perjury. However, we went on to hold perjured testimony can support an action in fraud. On the other hand, Cooper v. Parker-Hughey, 894 P.2d 1096 (Okla.1995), casts some doubt on a plaintiff's ability, under Oklahoma law, to premise an action for fraud solely on perjured testimony. Cooper, who was convicted of rape, alleged the state's expert witness committed perjury. The district court dismissed Cooper's action for tortious perjury, and the Oklahoma Supreme Court affirmed. The court found Okla. Stat. tit. 76, § 2 described an action for deceit or fraud. ³ When a person testifies falsely, however, he deceives the fact finder and the judicial system, not the litigants. Id. at 1100.

Cooper is distinguishable from the instant case in two respects. First, Cooper did not seek damages for fraud so we cannot be certain the Oklahoma Supreme Court would have rejected such an action. In Morgan, this court applied Oklahoma law to find defendant, who had filed a false affidavit and testified falsely, was liable for fraud. 228 F.2d at 627-29. Cooper cites Morgan for the proposition that there is no civil cause of action for perjury, but does not disapprove of this court's interpretation of Oklahoma law that perjury can support an action for fraud. 894 P.2d at 1100 n. 3. Second, and more importantly, Advantor's case was premised on more than James Yeary's false testimony. Counsel for Sonitrol of Oklahoma City misrepresented facts to the court and in a letter to counsel for Advantor. While misrepresentation to the court could, like perjury, be considered deceit upon the judicial system rather than upon Advantor, the letter to counsel for Advantor surely manifests an intent to deceive Advantor.

Finally, defendants cite Security State Bank v. Reger, 51 Okla. 397, 151 P. 1170, 1171 (1915), where the court held no action lies for fraudulently aiding a debtor to dispose of his property to prevent a general creditor from attaching it. However, Advantor was a judgment creditor, not a general creditor. Therefore, Reger is inapposite. The district court did not err in denying defendants' motion for judgment as a matter of law on Advantor's fraud claim. Submission of abuse of process claim to jury

Defendants also contend the district court erred in submitting the issue of abuse of process to the jury. In essence, they argue there was insufficient evidence to satisfy the elements of such a cause of action. The elements of abuse of process under Oklahoma law are "(1) the improper use of the court's process (2)...