Harman v. Diversified Medical Investments Corporation

• Decision Date: 27 November 1973
• Docket Number: No. 73-1299.,73-1299.
• Citation: 488 F.2d 111
• Parties: Ferrin C. HARMAN and Henry Clay, Plaintiffs-Appellants, v. DIVERSIFIED MEDICAL INVESTMENTS CORPORATION, a Colorado corporation, et al., Defendants-Appellees. DIVERSIFIED MEDICAL INVESTMENTS CORPORATION, a Colorado corporation, Third Party Plaintiff, v. David L. DOOLEY, Third Party Defendant.
• Court: U.S. Court of Appeals — Tenth Circuit

488 F.2d 111 (1973)

Ferrin C. HARMAN and Henry Clay, Plaintiffs-Appellants, v. DIVERSIFIED MEDICAL INVESTMENTS CORPORATION, a Colorado corporation, et al., Defendants-Appellees.

DIVERSIFIED MEDICAL INVESTMENTS CORPORATION, a Colorado corporation, Third Party Plaintiff, v. David L. DOOLEY, Third Party Defendant.

No. 73-1299.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted September 14, 1973.

Decided November 27, 1973.

John B. Ogden, Oklahoma City, Okl., for plaintiffs-appellants.

Robert S. Baker, Oklahoma City, Okl. (Dan A. Rogers, Tulsa, Okl., on brief for John E. Schroyer; Robert J. Emery, Oklahoma City, Okl., on brief for Chromalloy, Friedman, Zlotnick and Mullins), for defendants-appellees.

Before PHILLIPS, HILL and DOYLE, Circuit Judges.

HILL, Circuit Judge.

This appeal results from the dismissal of appellants' complaint and the granting of summary judgment for the defendants on their cross-claim in the United States District Court for the Western District of Oklahoma. After reviewing the submissions included in the record of this diversity case, we conclude that the many factual issues present in this case render the entry of summary judgment inappropriate here.

The record reveals some uncontroverted facts. Appellants Harman and Clay, as the controlling stockholders and managing officers of Perpetual Royalty Corporation, entered into an agreement with Diversified Medical Investments Corporation (DMIC) to transfer all of the outstanding stocks and assets of that company to DMIC in exchange for 240,000 shares of DMIC stock. After the completion of that exchange, DMIC halted trading in these shares by instructing its transfer agent to withhold action on any requests for changes of ownership involving the 240,000 shares in question. As a result, Harman and Clay filed the instant complaint alleging that DMIC and others had represented that the stock they were to receive under this agreement would be "free-trading" fully marketable stock, and that it would enjoy a specific range of market values. Defendants cross-claimed that as a result of various misrepresentations by the appellants, there had been no meeting of the minds in regard to this contract and requested rescission.

As we have stated as recently as in Ando v. Great Western Sugar Co., 475 F.2d 531 (10th Cir. 1973), no margin exists for the disposition of material issues by the use of summary judgment; that procedure cannot serve as a substitute for the trial of cases and does not require the parties to dispose of litigation by the use of affidavits. In reviewing such action by the district court, the pleadings and other documentary evidence are to be construed liberally and in favor of the party opposing such motions. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed. 2d 176 (1962). If any issue as to a material fact dispositive of right or duty remains, the case is not ripe for disposition by summary judgment and the parties are entitled to a trial. Fischer Constr. Co. v. Fireman's Fund Ins. Co., 420 F.2d 271 (10th Cir. 1969).

Though findings of fact would appear to be unnecessary in a case that contains no material questions of fact, the district court specifically found that DMIC made no representations of fact concerning the stock to appellants and that no meeting of the minds...