American Linen Supply Co. v. Nursing Home Bldg. Corp.
| Decision Date | 06 July 1976 |
| Docket Number | No. 3514--I,3514--I |
| Citation | 15 Wn.App. 757,551 P.2d 1038 |
| Parties | AMERICAN LINEN SUPPLY COMPANY, d/b/a Maryatt Industries, Respondent, v. NURSING HOME BUILDING CORPORATION, d/b/a Arden Nursing Home, Appellant, H. P. Clausing et al., Defendants. |
| Court | Washington Court of Appeals |
Casey, Pruzan, Kovarik & Shulkin, Martin Godsil, Seattle, for appellant.
Williams, Lanza, Kastner & Gibbs, William J. Leedom, Seattle, for respondent American Linen Supply Co.
Davis, Wright, Todd, Riese & Jones, Richard A. Derham, Seattle, for respondents DeHart.
American Linen Supply Company, d/b/a Maryatt Industries (American), sued Nursing Home Building Corporation (Building Corporation), d/b/a Arden Nursing Home, and others for moneys claimed to be owing to American for commercial laundry services and supplies furnished to the Arden Nursing Home.
In the trial court, American was granted a summary judgment against the Building Corporation in the sum of $11,423.28 plus interest. The Building Corporation appeals.
The facts out of which this case arose are established by affidavits filed herein as follows.
H. P. Clausing (Clausing) and Glenn E. Deer (Deer) The contract by which the DeHarts purchased the stock specifically contemplated that they could dissolve the Building Corporation and personally take over its assets. Pursuant to this, the DeHarts filed a statement of intent to dissolve the corporation, as required by RCW 23A.28.050. A certificate of assumed business name was then filed declaring Mr. DeHart to be a sole trader doing business under the firm name and style of Arden Nursing Home. This occurred in April of 1970. Thereupon the assets of the Building Corporation were transferred from the corporation to the DeHarts subject to all of the corporation's liabilities. As was to develop, dissolution proceedings were never completed and a certificate of dissolution required by RCW 23A.28.120 to terminate the existence of the corporation was never issued by the Secretary of State.
were the sole shareholders of the Building Corporation which owned and operated the Arden Nursing Home in Seattle. In January of 1970, Richard L. DeHart and Phoebe DeHart, husband and wife, (DeHarts) purchased all of the stock in the Building Corporation on an installment contract calling for a total payment of $700,000.
Then in July of 1970, the DeHarts entered into a contract with American. It is conceded by all parties to this appeal that the contract with American was entered into by the DeHarts acting as sole proprietors of the nursing home. Under this contract, American was to supply various linen and laundry services to the nursing home for an agreed consideration. American commenced furnishing linens and services to the nursing home that same month.
In November of 1970, the DeHarts concluded that they would not go through with the dissolution of the corporation. This decision was duly recorded in the minutes of a meeting of the shareholders of the Building Corporation along with approval of the following resolution:
A motion was made that the Nursing Home Building Corporation will Hold harmless and indemnify Richard L. DeHart and Phoebe D. DeHart as individuals for signing personally for any mortgages, notes, loans, Contracts or (Italics ours.) This resolution was acted on by the DeHarts who transferred business assets back to the Building Corporation.
leases for equipment or automobiles for and on the behalf of the Nursing Home Building Corporation or Doing Business As Arden Nursing Home. The motion was duly seconded and unanimously approved.
The following month, a statement revoking the voluntary dissolution proceedings by consent of the shareholders was filed pursuant to RCW 23A.28.070.
After the Building Corporation began operation the Arden Nursing Home, American continued to supply the nursing home with linens as before and the nursing home continued to accept them as before. Invoices were rendered to the nursing home by American as before and were accepted as before and payments on account continued to be made to American.
Some months later, Clausing and Deer commenced an action to forfeit their sales contract with the DeHarts alleging delinquencies in the performance thereof by the DeHarts. 1 At the request of Clausing and Deer, the superior court in that case appointed an operating receiver in May of 1971. The receiver took over the assets of the Building Corporation as well as the operation of the nursing home.
American continued furnishing its laundry service to the Arden Nursing Home for approximately a month following appointment of the receiver. Between July 15, 1970, when American first commenced doing business with the nursing home, and June 16, 1971, when it ceased doing so, linen and supplies totaling $21,634.95 were furnished and payments totaling $10,211.67 were received, leaving an unpaid balance of $11,423.28 owing to American. The written contract between American and the DeHarts provided for payment A few creditors' claims were paid during the pendency of the receivership. Most claims, however, including American's, were not paid.
of interest of 1 percent per month on all past due accounts. American filed a claim in the receivership proceeding for such sums.
A final hearing was held in the receivership on November 22, 1972, at which various creditors and their representatives were present. American's counsel and Clausing, Deer, and their counsel were all present. Certain representations were made to the assembled creditors and attorneys by Clausing. The fact of the representations made at that time by Clausing is not disputed but the nature of the representations is. Neither is it disputed that American as well as the other creditors withdrew their objections to the discharge of the receiver on the basis of such representations.
Thereupon a final order in the receivership was entered on November 22, 1972. It approved the receiver's final report and ordered all of the shares of stock in the Building Corporation to be returned to Clausing and Deer. The order also provided that it was
FURTHER ORDERED that ROBERT H. THOMPSON as receiver of NURSING HOME BUILDING CORPORATION shall turn over, assign, deed or transfer all right, title and interest in all property in his possession or under his control as said receiver, to NURSING HOME BUILDING CORPORATION including, but not limited to, personal and real property, chose(s) in action, defense or prosecution of all lawsuits, and Subject to the debts or claims of creditors set forth in the Final Report, including attachments, herein.
(Italics ours.)
The Building Corporation, now returned to the full control of Clausing and Deer, refused to pay American. American then commenced the present lawsuit.
After American commenced its action in the present case, it brought a motion for summary judgment pursuant to CR 56. On December 17, 1974, the trial court granted American In the order granting summary judgment, the trial court listed the documents it had considered. The trial court in its written order also specifically ruled that there was no genuine issue of material fact as to any of the following:
a summary judgment against the DeHarts and the Building Corporation in the sum of $11,423.28 plus interest at the rate of 1 percent per month from June 16, 1971. The DeHarts have not appealed.
American Linen Supply Company furnished services pursuant to a written contract with the DeHarts. Such services were received by the DeHarts during a period of time when they were acting as sole proprietors d/b/a Arden Nursing Home and, after revocation of the intent to dissolve the corporation, that these services were received by Nursing Home Building Corporation d/b/a Arden Nursing Home. There is no satisfactory evidence disputing the amount unpaid for said services or the reasonableness thereof, together with interest accruing thereon. The amount of charges incurred for services rendered to Arden Nursing Home at the time the DeHarts were operating said Nursing Home as a sole proprietorship have been paid in full. The balance presently remaining and the subject of this suit is a balance for services rendered to, and received by, Nursing Home Building Corporation.
Five issues are dispositive of this appeal.
ISSUE ONE. Did the trial court err in considering an affidavit of the DeHarts' attorney in ruling on the motion for summary judgment?
ISSUE TWO. Did the trial court err in considering American's answers to interrogatories, which had been verified by its attorney, in ruling on the motion for summary judgment?
ISSUE THREE. Was the Building Corporation liable to American for linen supplied to the nursing home by American during the period of time during which the Building Corporation operated the nursing home, when the written contract American had was with the sole proprietorship which previously operated the nursing home?
ISSUE FOUR. Did any genuine issue of material fact exist to bar the granting of American's motion for summary judgment against the Building Corporation?
ISSUE FIVE. Can interest in excess of 10 percent per annum accrue on a judgment if the contract on which the judgment is based provides for a higher rate of interest?
ISSUE ONE.
CONCLUSION. An attorney's affidavit may be considered in ruling on a motion for summary judgment to the extent that it is based on testimonial knowledge.
The attorney's affidavit to which error is assigned was used primarily as a means of getting the contents of certain pleadings from other lawsuits into the record. The documents referred to and summarized in the affidavit were attached to the affidavit as required. CR 56(e). The attached copies of documents establish that the portion of the affidavit referring to such documents was based on testimonial knowledge.
Unwise or impractical though it might otherwise be for an attorney of record in a case to make...
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