247 641 v. 1976 641 247 641 Stee v. Monte Industries, Inc v.

• Decision Date: 19 November 1976
• Docket Number: No. 9220,9220
• Citation: 247 N.W.2d 641
• Parties: Page 641 247 N.W.2d 641 E. C. STEE, Plaintiff and Appellee, v. 'L' MONTE INDUSTRIES, INC., and Leo J. Boehm, Defendants and Appellants. Civ. Supreme Court of North Dakota
• Court: North Dakota Supreme Court

Page 641

247 N.W.2d 641

E. C. STEE, Plaintiff and Appellee v 'L' MONTE INDUSTRIES, INC., and Leo J. Boehm, Defendants and Appellants.

Civ. No. 9220.

Supreme Court of North Dakota.

Nov. 19, 1976.

Syllabus by the Court

1. A finding by the trial court is not to be disturbed unless it is clearly erroneous, either upon a clear demonstration that

it is without substantial evidentiary support or that it was induced by an erroneous view of the law.

2. Where the trial court denied a new trial, we do not overturn on appeal unless the denial is clearly a manifest abuse of discretion.

3. Every person who is entitled to recover damages certain or capable of being made certain by calculation, the right to recover which is vested in him upon a particular day, also is entitled to recover interest thereon from that day, except for such time as the debtor is prevented by law or by the act of the creditor from paying the debt. Section 32--03--04, North Dakota Century Code.

4. A 'certain' or 'liquidated' claim does not become 'uncertain' or 'unliquidated' by reason of action by a defendant to either dispute it or to put forth an unliquidated setoff or counterclaim.

5. For reasons stated herein, the award of prejudgment interest in this case was not error.

William R. Mills, Bismarck, for defendants and appellants.

Morris A. Tschider and Dennis A. Schneider, Bismarck, for plaintiff and appellee; argued by Dennis A. Schneider, Bismarck.

PEDERSON, Justice.

This is an appeal from a judgment and from an order denying a motion for new trial. We find no clearly erroneous findings of fact and no errors in the conclusions of law. The trial court did not abuse its discretion in denying the motion for a new trial.

Stee, a professional engineer, was engaged by Boehm to provide consulting engineering services for a housing development project in rural Morton County being constructed by 'L' Monte Industries, Inc. Boehm was president, manager, and, for all practical purposes, the sole owner of the corporation. For his capital contribution to the corporation Boehm had the corporation execute a note to himself in the amount of $98,000.00.

After nine homes had been constructed, 'L' Monte found it necessary to obtain additional financing, which it was not able to accomplish, and, because the subdivision was not acceptable to FHA, the nine completed homes could not be sold. In December 1972 the entire project was taken over by Berger and Sonduck. Included in the arrangements for the take-over were provisions for 'L' Monte to become the owner of an apartment house in Bismarck, formerly owned by Berger and Sonduck, and Berger and Sonduck became the owners of the Morton County housing project and the lands involved. Some of the 'L' Monte debts on the project were apparently assumed by Berger and Sonduck, and others, such as the claim of Stee, were continued as debts of 'L' Monte. On January 3, 1973, 'L' Monte conveyed the apartment house to Boehm and Boehm satisfied the $98,000.00 note. It appears that as far as Boehm was concerned, by these actions, the corporation went out of existence.

Through the efforts of a Mandan accounting firm that handled 'L' Monte record keeping, and a Bismarck CPA firm that handled 'L' Monte tax matters, a fiscal year, ending January 31, 1973, tax return and financial statement were prepared. These documents did not recognize the $98,000.00 note from 'L' Monte to Boehm as a debt of the corporation, but only as evidence of Boehm's capital investment. The financial statement (after the transfer of the apartment to Boehm) indicated that the only assets of the corporation were a claim against Boehm in the amount of $62,117.00, some fixed assets valued at $8,941.00 after depreciation, and miscellaneous accounts receivable of $579.00. Included along with other liabilities were Boehm's capital stock of $98,000.00 and an account payable to Stee in the amount of $8,503.98.

When Stee brought this action against 'L' Monte and Boehm to recover the $8,503.98 as an agreed engineering fee, he asked for a judgment declaring the transfer of the apartment by 'L' Monte to Boehm After a two-day trial to the court without a jury, the following findings and conclusions were entered:

to be fraudulent, and that he be awarded a lien against the apartment. Boehm and 'L' Monte answered separately, denying that the fee was an agreed or promised sum and denying the reasonableness of Stee's claim, denying that fraud was involved in the apartment transfer, and counterclaiming for $15,000.00 for damage suffered because of faulty engineering performed by Stee.

'FINDINGS OF FACT

'1. The plaintiff was engaged as an engineer to perform engineering services for the defendant corporation.

'2. The plaintiff performed these engineering services in an acceptable manner for the defendant corporation and the reasonable sum remaining due and owing for such services is $8,503.98.

'3. The defendant corporation failed to prove by a preponderance of the evidence its Counterclaims as to damages as a result of misplacement of manholes and the design of the water tank and further failed to prove that the lagoon was built in the place claimed by the defendant and that if the lagoon were misplaced by the plaintiff, the defendant failed to prove damages therefrom.

'4. The transfer by the corporation, accomplished by its sole stockholder and president, Leo J. Boehm, of property including an apartment house at the following described location: * * * was a transfer which rendered the corporation insolvent and constituted a fraud as to the creditors of the corporation.

'5. The transfer of the above described property was to the defendant, Leo J. Boehm, personally.'

'CONCLUSIONS OF LAW

'1. The defendants are indebted, jointly and severally, to the plaintiff, in the amount of $8,503.98.

'2. The defendants' counterclaims are dismissed for failure to prove damages and failure of proof by a preponderance of the evidence.

'3. The plaintiff is entitled to follow the proceeds of the fraudulent transfers and hence is entitled to have a lien against the real property and buildings thereon described above.'

'L' Monte and Boehm did not submit proposed amended findings under Rule 52(b), N.D.R.Civ.P., but jointly moved for a new trial on the following grounds:

'1. The court abused its discretion in permitting the plaintiff to prove a case not raised by the pleadings and upon which discovery by the defendant had justifiably not been done.

'2. The evidence was insufficient to justify the decision and the decision was contrary to the evidence and the decision was contrary to law.

'3. The court erred in ruling that the daily records of Stee could have been discovered and the court would refuse them if produced.

'4. The court erred in sustaining the objection to the following question directed by defendants to the witness Orser: 'Now, can you tell from your records, after all these bills were paid off, what bills 'L' Monte owed and what property they owned?'

'5. The court erred in dismissing entirely the counterclaim, for the evidence clearly showed incompetent performance by the plaintiff and financial loss therefrom to the defendants.'

On this appeal, 'L' Monte and Boehm state that the 'grounds set out there (in the motion for new trial) are the issues for review.' None of the five stated grounds for new trial make a direct attack against any of the specific findings of fact. We said in Sorenson v. Olson, 235 N.W.2d 892, 895 (N.D.1975):

'When no specific finding is challenged on appeal but all are attacked generally by a claim that the evidence does not support the findings, we determine only whether any finding on a controlling question is not supported by substantial evidence.'

Although the supporting testimony may be disputed by contradictory testimony, and we could readily conclude that the evidence could support other findings, we are governed by Rule 52(a), N.D.R.Civ.P., in reviewing the findings that were made. That Rule provides, in part:

'Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.'

It might be more convenient if such a rule were located in our appellate rules rather than in the Rules of Civil Procedure; however, since it was incorporated into the civil rules on August 1, 1971, it has been applied as an appellate rule by this court, starting with a series of opinions in 1972 and 1973 to the present. In a most clearly articulated opinion, which was co-authored by former Chief Justice Strutz and Justice Vogel, In re Estate of Elmer, 21,0 N.W.2d 815 (N.D.1973), we said, inter alia:

'* * * we are bound by Rule 52(a). We are bound by it, whether we consider the decision of the lower court as conclusive upon us as to issues of fact as a jury verdict is, or whether we are bound by a slightly less severe standard, as the dissent urged * * * (in Kleinjan). ¹

'A finding is 'clearly erroneous' only when, although there is some evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made.'

All of the opinions Shepardized under Rule 52(a) have made the same general interpretation of the Rule, not always in the same language but obviously giving the trial judge's finding a presumption of correctness which an appellant must overcome. In this case there is substantial evidence to support each of the findings and we are not left with a definite and firm conviction that a mistake has been made.

A finding by the trial court is not to be disturbed unless it is clearly erroneous, either upon a clear demonstration that it is without substantial evidentiary support or that it was induced by an erroneous view of the law.

ISSUES RAISED ON MOTION FOR NEW TRIAL

1. Appellants argue that the court abused its discretion in permitting Stee to prove a case not raised by the...