BELIN v. DUGDALE
| Decision Date | 23 June 2010 |
| Docket Number | Trial Court No. 50,560 |
| Parties | KEN BELIN AND BARBARA BELIN,Plaintiffs-Appellants v. J. CURTIS DUGDALE, FRANCES Defendants-Appellees PILGREEN DUGDALE, AND RUSTON FARM IMPLEMENTS, INC. |
| Court | Court of Appeal of Louisiana — District of US |
KEN BELIN AND BARBARA BELIN, Plaintiffs-Appellants
v.
J. CURTIS DUGDALE, FRANCES Defendants-Appellees PILGREEN DUGDALE, AND RUSTON FARM IMPLEMENTS, INC.
Court Of Appeal
Second Circuit
State Of Louisiana
June 23, 2010
T. J. ADKINS, Counsel for Appellants
CHRIS L. BOWMAN Counsel for Appellees
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Before GASKINS, PEATROSS and DREW, JJ.
GASKINS, J.
The plaintiffs, Ken and Barbara Belin, appeal from a trial court judgment denying their request for specific performance of what they purport to be either an agreement to buy and sell or a contract of sale regarding Ruston Farm Implements, Inc. (RFI). RFI is a business owned by the defendants, Curtis and Frances Dugdale. The plaintiffs were awarded damages in the amount of $7,500 for improvements made to the business. For the following reasons, we affirm the trial court judgment.
Curtis and Frances Dugdale are the owners of RFI. The business was run by Mrs. Dugdale. Barbara Belin worked at RFI for several years as an office assistant. In February 2005, Mrs. Dugdale began talking about selling the business and the Belins expressed interest in purchasing it. RFI sold Kubota and New Holland tractors and various other brands of tractor equipment. There was some controversy as to whether those companies would allow the Belins to take over the dealership of their products.
Various documents were drafted outlining the agreement between the parties. One draft, which was not introduced at trial, was about one and one-half pages in length. Mrs. Dugdale directed Mrs. Belin to pare down the document and "leave off all that gobbily-poop legal stuff" so that Mr. Dugdale could understand it. On March 8, 2005, the parties signed a condensed document which had been prepared by Mrs. Belin. The document, referred to by the Belins as "Exhibit A," stated:
The document was dated March 8, 2005, and all four parties signed it. The document was not notarized.
On April 1, 2005, Mrs. Dugdale announced to the employees of RFI that the Belins were buying the business and that they were going to run it. Beginning on that date, the Belins began operating the business. They made some renovations, cleaned up the premises, and reorganized the inventory. They also hired some new employees and fired one of the existing employees. Mrs. Dugdale maintained an office at the business.
During this time, Mrs. Dugdale contacted a lawyer to draft what was referred to as the "final final" buy and sell agreement. On April 29, 2005,
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Mrs. Dugdale informed Mrs. Belin that Mr. Dugdale no longer wished to sell the business and that they were not going to go through with the sale. Mrs. Belin took her personal items and left the business.
On June 8, 2005, the Belins filed suit against the Dugdales claiming that the parties executed a written contract to sell RFI to the Belins and that they relied upon the contract by cleaning up the building and grounds, renovating the buildings, rearranging and reconstructing the exterior and interior of the buildings, collecting past due accounts, and arranging financing for the purchase of the business. The plaintiffs claimed that on June 1, 2005, the Dugdales, through their attorney, notified the Belins that they would not honor the contract to sell. The Belins sought specific performance of the contract to sell, or in the alternative, damages for detrimental reliance.
Trial on the matter was held on March 9-10, 2009. Frances Dugdale testified that she and her husband had owned RFI since 1989. In February 2005, she began talking to the Belins about buying the business. Mrs. Dugdale stated that several drafts of the agreement between the parties were typed up. At one point, the Belins offered to pay $1.1 million to buy into the business at 49%. According to Mrs. Dugdale, the negotiations changed to the Belins buying 100% of the business for $1.1 million and they were to put down $10,000 in earnest money. According to Mrs. Dugdale, the Belins never paid any money. She said that the fact that the Belins never paid any money was a factor in deciding not to sell the business to them. She
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testified that if the Belins had come up with the $1.1 million by the end of April 2005, she would have gone through with the sale.
Mrs. Dugdale acknowledged that in April 2005, she informed the employees of RFI that the Belins were in the process of buying the business. The Belins then reorganized the business, made renovations and hired new employees. The Dugdales refused to allow the Belins to mortgage the real estate where the business was located in order to secure their loan with the bank.
During the month of April, when the Belins operated the business, they used only the money in the payroll account. Mrs. Dugdale stated that the banker informed her that the operating account was overdrawn and she transferred $50,000 from the payroll account to the operating account. At the end of April, Mrs. Dugdale told Mrs. Belin that the Dugdales had decided not to sell the business. According to Ms. Dugdale, the necessary documents to execute the sale had not been signed and the Belins had not paid any money. Mrs. Dugdale testified that the business was later sold to another party for $1.1 million.
Curtis Dugdale testified that his wife was the president and chief operating officer of RFI. Their son, Tommy, was the manager of the business. Mr. Dugdale was not involved in the daily operations of the business. He corroborated his wife's testimony that the original agreement was for the Belins to buy 49% of the business.
Barbara Belin testified that she worked at RFI for six years as the office manager. She stated that when she and her husband began
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negotiating with the Dugdales for the purchase of the business, Mrs. Belin drafted a document that was very specific about the terms of the agreement. Adjustments were made in the manner that the Dugdales were to be paid and the percentage of ownership of the business. According to Mrs. Belin, the final agreement was for a full purchase of the business and property for $1.1 million. However, the document reflecting that agreement was stored on the computer that Mrs. Belin used at RFI. This document was never signed by the parties. Mrs. Belin did not produce a copy of this document at trial.
In April 2005, the Belins began operating the business and considered all the money in the payroll account to be theirs. The Belins made improvements to the business. At the end of April, the Dugdales decided they did not want to sell RFI. Mrs. Belin said that the parties were to go to the lawyer's office on April 29, 2005 to sign what she termed the "final final" document and the bank would have released the funds to be paid to the Dugdales.
Mrs. Belin recognized that the document signed by the parties on March 8, 2005, did not contain information on many specifics about the agreement, including how payments where to be made to the Dugdales, how accounts receivable were to be handled, and how tractors and other equipment were to be dealt with. There was also no legal description of the real estate that was to be conveyed with the business, if any. Mrs. Belin acknowledged that the document stated that it was a draft of the operating agreement. She stated that this phrase was left in the document by mistake.
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However, Mrs. Belin believed that the March 8, 2005 document transferred ownership of the business to the plaintiffs. Mrs. Belin stated that there were issues regarding whether New Holland and Kubota would accept the transfer of ownership of the dealership to them, and they put in the agreement that they were purchasing only 49% of the business in order to make the deal more acceptable to New Holland and Kubota. Mrs. Belin believed that they had financing for the deal arranged at the bank.
Kenneth Belin testified and corroborated Mrs. Belin's testimony. He outlined the negotiations regarding the price to be paid for RFI. Mr. Belin said that they never paid any money to the Dugdales, but when they signed the document on March 8, 2005, he thought that ownership of the business was transferred to the Belins. According to Mr. Belin, his sister and brother-in-law were going to lend them the money through the bank to buy RFI. Mr. Belin stated that he understood that there were difficulties in getting New Holland and Kubota to accept the Belins and release the Dugdales from their wholesale floor plan loan used to finance the tractors and other equipment in inventory. Mr. Belin said that he thought he and Mrs. Belin owned the money in the payroll account. Mr. Belin outlined the renovations and improvements made to the store during April 2005. However, he stated that he did not have an estimate of the costs for renovation of the business.
On August 14, 2009, the trial court issued a written ruling. The trial court stated that, for there to be an action, there must be a contract. For there to be a contract giving rise to a debt, there must be a "meeting of the
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minds" or a "clear understanding" between the parties. Where there is no meeting of the minds or a clear understanding between the parties, there is no enforceable contract. The trial court pointed out that the party which asserts the existence of the contract has the burden of proving the contract.
The court noted that the document dated March 8, 2005, was the only document signed by all the parties. That document was then taken to a lawyer to draft the actual buy/sell agreement with legal descriptions of the property conveyed. The court noted that the document signed by the parties does not deal with how accounts receivable were to be handled or how the purchase price was to be paid. The trial court found that the parties eventually agreed upon a purchase price of $1.1 million, but no money was ever paid to the Dugdales.
According to the trial court, an examination of the document executed on March 8, 2005, leads to the conclusion that the parties contemplated a...
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