Buell Cabinet Co., Inc. v. Sudduth

• Decision Date: 29 October 1979
• Docket Number: No. 78-1788,78-1788
• Citation: 608 F.2d 431
• Parties: BUELL CABINET COMPANY, INC., Plaintiff-Appellant, v. Richard S. SUDDUTH and Steven H. Janco, Individually, and as general partners in World Products, a general partnership; Steven H. Janco and Richard S. Sudduth, d/b/a World Properties, a joint venture; and Old World Products Corporation, a corporation; McKee Income Realty Trust, a business trust organized under the laws of the Commonwealth of Massachusetts; and Sooner Federal Savings and Loan Association of Tulsa, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 431

608 F.2d 431

BUELL CABINET COMPANY, INC., Plaintiff-Appellant, v. Richard S. SUDDUTH and Steven H. Janco, Individually, and as

general partners in World Products, a general partnership;

Steven H. Janco and Richard S. Sudduth, d/b/a World

Properties, a joint venture; and Old World Products

Corporation, a corporation; McKee Income Realty Trust, a

business trust organized under the laws of the Commonwealth

of Massachusetts; and Sooner Federal Savings and Loan

Association of Tulsa, Defendants-Appellees.

No. 78-1788.

United States Court of Appeals,

Tenth Circuit.

Submitted March 26, 1979.

Decided Oct. 29, 1979.

Benjamin C. Faulkner of Eagleton, Eagleton & Owens, Inc., Tulsa, Okl., for plaintiff-appellant Buell Cabinet Company, Inc.

Steven M. Harris, Tulsa, Okl., for defendants-appellees Richard S. Sudduth, Steven H. Janco, World Products, World Properties and Old World Products Corporation.

Joe Francis, Tulsa, Okl., for defendant-appellee McKee Income Realty Trust.

Before BARRETT, DOYLE and McKAY, Circuit Judges.

McKAY, Circuit Judge.

In this diversity action, plaintiff Buell Cabinet Co. (Buell) appeals from a grant of summary judgment to defendants and from a denial of its own motion for summary judgment. Because we find that genuine issues of material fact remain to be resolved, we reverse the grant of summary judgment to defendants, affirm the denial of Buell's motion, and remand for trial.

I.

Buell seeks to impose a judgment lien against certain Oklahoma real property, the Commerce Center (Center), which Buell asserts is owned in part by defendant-appellee Sudduth, the judgment debtor. However, Sudduth claims never to have had an individual interest in the property, but rather to have been only a partner or stockholder in entities owning the Center. Since under Oklahoma law a judgment lien attaches only to real property owned by the judgment debtor, Okla.Stat.Ann. tit. 12, § 706 (West Supp.1978), and "(t)he property of a partnership belongs to the firm, and not to the partners," Krone v. Higgins, 195 Okl. 380, 381, 158 P.2d 471, 472 (1945), Quoting First National Bank v. Dunklin, 146 Okl. 81, 293 P. 541 (1930), the status of the Center's ownership is at issue.

The undisputed history of the transactions involving the Center is complex. At least as early as December 1974, defendants Janco and Sudduth were partners in a general partnership, World Properties. On March 26, 1975, an entity styled "Stephen H. Janco and Richard S. Sudduth, d/b/a World Properties" entered into and filed for record a Purchase Agreement and Contract for Deed covering the Center. On the same day, a Tulsa bank filed for record, as security for a promissory note executed by Janco and Sudduth, a collateral assignment of the purchase agreement. Several days later a second collateral assignment was executed. In May, Janco and Sudduth filed a Certificate of Fictitious Name designating their partnership "World Properties," ¹ and in June a Certificate of General Partnership for that entity was filed. In July, nearly four months after the actual conveyance, Janco and Sudduth recorded a General Warranty Deed for the Center, with the grantee designated as "Stephen H. Janco and Richard S. Sudduth, d/b/a World Properties." A "Corrected Warranty Deed" was filed by the original grantors in August, listing the grantee as "WORLD PROPERTIES, A General Partnership." This partnership gave two mortgages on the Center and, on February 24, 1976, three days before Buell's lien would have attached to Sudduth's real property, the partnership purported to convey the Center by warranty deed to defendant-appellee Old World Products Corporation, an entity wholly owned by Janco and Sudduth. In April, Stephen H. Janco and Richard S. Sudduth, d/b/a World Properties quitclaimed its interest in the Center to Old World Products Corporation, which in turn conveyed its interest in the Center to defendant-appellee McKee Income Realty Trust.

From these undisputed facts and additional material, Buell sought to convince the district court that Stephen H. Janco and Richard S. Sudduth, d/b/a World Properties was a joint venture by which Janco and Sudduth took the Center in their individual capacities, that the "corrected" deed had no legal effect and, because the acknowledged partnership World Properties did not acquire legal title to the Center, that the subsequent conveyances were legally void. Appellees countered that Stephen H. Janco and Richard S. Sudduth, d/b/a World Properties and the general partnership were one and the same the "d/b/a" designation used only until a Certificate of Fictitious Name could be filed. Under appellees' theory, Sudduth at no time had an interest reachable by his personal judgment creditor.

On a motion for summary judgment, we must construe the facts in a way most favorable to the nonmovant. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). Cross-motions for summary judgment are to be treated separately; the denial of one does not require the grant of another. See SEC v. American Commodity Exchange, Inc., 546 F.2d 1361, 1365 (10th Cir. 1976). See also C. Wright & A. Miller, Federal Practice and Procedure § 2720, at 464 (1973). The existence of any "genuine issue as to any material fact" precludes the grant of summary judgment. Fed.R.Civ.P. 56(c).

On the posture of the case before us, we find, at a minimum, several factual issues involving questions of intent, issues that in this case are inappropriate for resolution on a motion for summary judgment. Questions of intent involve many intangible factors, such as witness credibility, that are best left to the consideration of a factfinder after a full trial. See, e. g., Peoples Outfitting Co. v. General Electric Credit Corp., 549 F.2d 42, 45 (7th Cir. 1977); Exnicious v. United States, 563 F.2d 418, 424-25 (10th Cir. 1977); Jones v. General Tire & Rubber Co., 541 F.2d 660, 663 n.3 (7th Cir. 1976). We need not decide whether intent is ever a suitable subject for summary judgment resolution. We hold only that here it was not.

As appellees have reminded us, "Intent is the single most important factor in determining whether a partnership exists." Brief of Appellees at 12, Citing Utility Coal Co. v. Clark, 171 Okl. 79, 41 P.2d 840 (1935). The district court agreed, in its Conclusions of Law, that intent to form a partnership is an essential element of a partnership. Record, vol. 1, at 155, Citing Crest Construction Co. v. Insurance Co. of North America, 417 F.Supp. 564, 568 (W.D.Okl.1976). Nonetheless, the court found that the original deed and corrected deed "did convey the property . . . to the same entity, a partnership." Record, vol. 1, at 155. This summary conclusion without the benefit of a trial was error. Buell did present materials that could support an inference that Stephen H. Janco and Richard S. Sudduth, d/b/a World Properties was not intended to be a partnership and was, in fact, a separate entity. For example, in a deposition Sudduth himself had referred to this organization as "an heir (sic) entity (that) did not exist but just a matter of hours actually." Record, vol. 1, at 104. In Sudduth's words, the entity was created because "we had to buy the building that way." Id. at 103. These assertions, if true, would tend to contradict the district court's finding. ²

Appellees, citing Fourth National Bank v. Cochran, 298 P.2d 784 (Okl.1956), have suggested that the "d/b/a" designation creates a name "such as is commonly employed when a partnership exists," Id. at 788, and is therefore presumptive of a partnership's existence. In light of Thomas v. Colvin, 592 P.2d 982 (Okl.App.1979), in which a "d/b/a" name was held not to create an entity distinct from a sole proprietor for tort liability purposes, appellees' argument may not be supported by Oklahoma law. However, even if it did reflect Oklahoma law with respect to designations of partnerships, it connotes merely a presumption, which could be rebutted by, among other things, the intent evidence discussed above.

A genuine issue of material fact also exists with respect to the funds used to purchase the Center. As the district court noted, the applicable statute reads, "Unless the contrary intention appears, property acquired with partnership funds is partnership property." Record, vol. 1, at 856, Quoting Okla.Stat.Ann. tit. 54, § 208 (West 1969) (emphasis added). The court found the Center to be a partnership asset. Record,...