Chrysler Credit Corp. v. Cathey, 91-3614
| Decision Date | 14 October 1992 |
| Docket Number | No. 91-3614,91-3614 |
| Citation | 977 F.2d 447 |
| Parties | CHRYSLER CREDIT CORPORATION, Plaintiff-Appellee, v. Jim CATHEY; Doris Cathey, Defendants, David Ross; Darlene Ross, Defendants-Appellants, Sammy Ross; Stephanie Ross, Defendants, James Hagans; Bonnie Hagans, Defendants-Appellees, Ross-Cathey Motors, Incorporated, Defendant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
James S. Dunham, Russellville, Ark., for defendants-appellants.
H. Clay Fulcher, Fayetteville, Ark., for defendants-appellees, James Hagans and Bonnie Hagans.
Greg Smith of Little Rock, Ark., and Charles A. Newman, James W. Erwin and Thena G. Poteat, St. Louis, Mo., for plaintiff-appellee, Chrysler Credit Corp.
Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit Judge, and FAGG, Circuit Judge.
This appeal arises from the sale of a Chrysler dealership owned by James and Bonnie Hagans to Ross-Cathey Motors, Incorporated, a corporation owned by David and Darlene Ross and Jim and Doris Cathey. To finance the dealership purchase, the Catheys signed a promissory note secured by a mortgage in favor of Chrysler Credit Corporation. Acting as the Rosses' agent under individual powers of attorney, Jim Cathey signed the promissory notes and other closing documents for David and Darlene Ross. The powers of attorney appointed Jim Cathey "to act for me in my place, as my attorney-in-fact for the purpose of closing the sale of Hagans Motors, Inc. to Ross Cathey Motors Inc." After a Chrysler Credit audit one year later revealed a significant deficiency in the assets of Ross-Cathey Motors, the dealership voluntarily surrendered its assets to Chrysler Credit.
Chrysler Credit filed this diversity action for breach of the promissory notes and security agreements and joined the Haganses as defendants because they held a second mortgage on the dealership. The Haganses cross-claimed against the Rosses and Catheys. Chrysler Credit moved for partial summary judgment and for a judicial sale of the real estate. Although the district court extended the time for response to the motion, neither the Rosses nor the Catheys responded. The district court granted the motion and the real estate was sold. The only remaining issues were the amount of the deficiency and a dispute between the mortgagors about the disposition of the sale's proceeds.
The Rosses then retained new counsel and asserted the powers of attorney did not authorize Cathey to incur personal liability on the Rosses' behalf. The district court allowed the Rosses to amend their answer to plead this theory. Nevertheless, the district court concluded the powers of attorney the Rosses signed bound them to all obligations contained in the documents signed in connection with the dealership's sale to Ross-Cathey Motors. Thus, the district court ordered Chrysler Credit and the Haganses to submit affidavits specifying the amount outstanding on the debt. The district court later entered judgment for Chrysler Credit and the Haganses for the amount due under the notes and agreements less any credit, and awarded the Haganses attorney fees. The Rosses appeal and we affirm.
First, the Rosses contend the district court erroneously concluded the powers of attorney the Rosses signed authorized Jim Cathey to incur personal liability on their behalf. The district court found the powers of attorney explicitly empowered Jim Cathey to act for the Rosses in closing the dealership sale and purchase and concluded as a matter of law that this encompassed incurring personal liability on the dealership notes. See Arkansas Med. & Hosp. Serv., Inc. v. Cragar, 220 Ark. 704, 249 S.W.2d 554, 557 (1952) (). Having reviewed this question of state law de novo, we agree with the district court.
Second, the Rosses contend the district court's refusal of a hearing on the merits denied them due process. Four days before trial, the district court removed the case from the trial docket and ordered the parties to submit the case on the record and briefs. The order erroneously stated the attorneys for all parties had agreed to this procedure. The district court overruled the Rosses' objection.
Although the district court decided the case without conducting a hearing on the merits, we conclude the district court did not violate the Due Process Clause. When a deprivation of property is based on undisputed facts or issues, the Due Process Clause does not require any procedure. 2 Ronald D. Rotunda & John E. Nowak, Treatise on Constitutional Law § 17.8, at 645 (2d ed. 1992). ...
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