Cranford v. Bartlett

• Decision Date: 05 June 2001
• Docket Number: No. 93,002.,93,002.
• Citation: 25 P.3d 918,2001 OK 47
• Parties: Sonya CRANFORD and Richard Cranford, Plaintiffs/Appellants/Counter-Appellees, v. Robert BARTLETT, Defendant/Appellee/Counter-Appellant.
• Court: Oklahoma Supreme Court

25 P.3d 918

2001 OK 47

Sonya CRANFORD and Richard Cranford, Plaintiffs/Appellants/Counter-Appellees, v. Robert BARTLETT, Defendant/Appellee/Counter-Appellant.

No. 93,002.

Supreme Court of Oklahoma.

June 5, 2001.

Donald R. Bradford, Tulsa, Oklahoma for Appellants/Counter-Appellees.

James R. Hicks of Morrel, West, Saffa, Craige & Hicks, Inc., Tulsa, Oklahoma for Appellee/Counter-Appellant.

LAVENDER, J.

¶ 1 The question we answer in this case is: did the trial judge err in granting summary judgment to appellee, Robert Bartlett (Robert) in a suit brought against him by appellants, Sonya and Richard Cranford? We hold the trial judge erred and the Court of Civil Appeals (COCA) mistakenly affirmed. Summary judgment is reversed and the matter is remanded to the trial court for further proceedings.¹

PART I. STANDARD OF REVIEW.

¶ 2 A grant of summary judgment is reviewed de novo because the ultimate decision turns on a purely legal determination, i.e. whether a party to the litigation is entitled to judgment as a matter of law. Fehring v. State Insurance Fund, 2001 OK 11, ¶3, 19 P.3d 276; Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051, 1053. De novo review is a plenary, independent and non-deferential re-examination of the trial court's ruling. Manley v. Brown, 1999 OK 79, ¶ 22 f.n. 30, 989 P.2d 448. Like a trial court, an appellate court examines the pleadings and evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact [Fehring v. State Insurance Fund, 2001 OK 11 at ¶ 3, 19 P.3d 276] and, as in the trial court, all inferences and conclusions arising from the evidentiary materials are viewed in a light most favorable to the non-moving party. Id.

¶ 3 If the summary judgment record discloses either controverted material facts, or, even if the material facts are undisputed reasonable minds might reach different conclusions from those facts, summary judgment should be denied [Prudential Ins. Co. v. Glass, 1998 OK 52, ¶ 3, 959 P.2d 586] because in neither situation can it rightfully be concluded one side or the other to the lawsuit is entitled to judgment as a matter of law. It must be remembered, neither a trial court nor this Court weighs the evidence on a motion for summary judgment. Id.; Stuckey v. Young Exploration Co., 1978 OK 128, 586 P.2d 726, 730. Evidence weighing is a function for the jury, and in a non-jury case for the trial judge, after an appropriate trial of the issues. Prudential Ins. Co. v. Glass, 1998 OK 52 at ¶ 3, 959 P.2d 586. As explained below, the summary judgment record, when subjected to de novo review, is unable to support the conclusion that appellee, Robert Bartlett was entitled to judgment as a matter of law.

PART II. FACTS.²

¶ 4 Appellants owned Grannie Lynette's of Tulsa, Inc. (company), a sitter/employment service.³ Each appellant owned 2,500 shares of the common stock of the company, the total number of shares of stock outstanding.⁴ Appellants sought to sell and Robert's wife, Colleen sought to purchase the company. Negotiations ensued between appellants and Colleen, each side having attorney consultation and representation. A written Stock Purchase Agreement (agreement) was drafted whereby appellants would sell and Colleen would purchase all of appellants' stock and a closing date was set for the sale. At some point before the closing date (March 13, 1996) Colleen and her attorney proposed that appellants accept a short-term note in lieu of the total purchase price being paid at closing.⁵ The reason for the proposal was that, although Colleen apparently had certain assets, the assets were not easily transformable into ready cash and, as we explain in more detail below, Robert was to receive imminently an inheritance from his father's estate, part of which he intended to give to Colleen to pay the note.

¶ 5 The total agreed purchase price was $25,000.⁶ Appellants were paid $2,000 at or prior to closing and, at closing, they did accept a note signed by Colleen for the remaining $23,000. The note was due on or before May 13, 1996, sixty (60) days from the closing. Only Colleen signed the note, and only she and appellants signed the agreement. Robert did not sign the agreement or note, and he is not named as a purchaser in the agreement.

¶ 6 One clause of the agreement allowed Colleen to rescind the entire transaction if she was unable to obtain any necessary license or permit to conduct the business of company.⁷ Apparently, Colleen applied for some type of license from the Oklahoma Department of Labor she and her counsel deemed necessary to conduct the business. The license was not granted. Accordingly, the note was not paid and Colleen made an effort to rescind the transaction under the necessary-license rescission clause. Although we have not been afforded all details concerning it, apparently some type of declaratory judgment lawsuit was filed by Colleen seeking resolution of her right to rescind. However, that lawsuit did not culminate in a final adjudication of the issue because Colleen filed for bankruptcy and any liability she had to appellants for the debt on the note was discharged in the bankruptcy proceeding.

¶ 7 Appellants, in this case, sued Robert to recover (among other relief) the remainder of the purchase price they asserted was due. In addition to raising claims based on fraud, estoppel by silence and guaranty, appellants' amended petition alleged that Robert, unbeknownst to them, was to receive a joint interest in the stock of company to be purchased and that he did receive an interest in the stock purchased from them.⁸ In other words, facts were pled in the amended petition to, in effect, allege that Robert was intended to be, and in fact was, a joint purchaser of the business with his wife, although appellants were led to believe only Colleen would be purchasing their stock, and, thus, the company. In essence, appellants alleged Robert and Colleen were codebtors/joint obligors for the remaining purchase price because they were truly joint purchasers.

¶ 8 After the filing of the amended petition Robert moved for summary judgment, appellants responded to the motion and Robert filed a reply to appellants' response. The record is undisputed that Robert was present at the closing. Although it is also undisputed he said nothing at the closing until the agreement and note were signed, evidentiary materials are in the record to raise, at a minimum, a reasonable inference that Robert, at the closing, heard statements made by Colleen and/or her attorney, to the effect that he would be providing his wife with the funds necessary to pay the note from an inheritance he was anticipating imminently receiving from his father's estate. There are also evidentiary materials to raise, at least, a reasonable inference that after the agreement was signed by appellants and Colleen and the note by Colleen, that Robert, immediately after the closing, in effect, verified to appellants the above mentioned statements made during the closing by Colleen and/or the attorney.

¶ 9 In fact, there is really no dispute in the record that both appellants and Robert understood that the funds to pay off the note, i.e. the remaining purchase price, were to come from the inheritance funds. Robert's own deposition testimony reveals he had an understanding with his wife that he would provide her with the funds to pay off the note, said funds to emanate from the inheritance. There is also little question that the summary judgment record contains evidentiary materials to support the reasonable inference that Robert understood that appellants agreed to accept the note for the remainder of the purchase price based on their understanding it would be paid by the inheritance funds. In substance, Robert freely admitted in his deposition testimony that he understood appellants agreed to accept the sixty (60) day note in reliance upon the availability of the inheritance money to pay it.⁹ Further, appellant, Sonya Cranford (in her deposition), in substance, testified that Colleen had told her at some point prior to the closing that she (i.e. Colleen) was going to run the company and that Robert was going to purchase it for her. The record also contains evidentiary material showing Robert did eventually receive certain inheritance funds from his father's estate and, at least, some of said funds, sufficient in amount to pay the remainder of the purchase price, were actually deposited into a joint account he had with Colleen — but the amount so deposited was later withdrawn from the joint account and placed in an account in Robert's name only.

¶ 10 Copies of the two stock certificates of 2,500 shares each (i.e. the stock of company being purchased) are also contained in the summary judgment record. The certificates were executed by appellants in blank as to the purchaser(s) and turned over to Colleen and her legal representative in such blank condition, but at a later time were filled in as having been sold, assigned and transferred to both Robert and Colleen in joint tenancy with right of survivorship. The Cranfords' endorsements on the two certificates are dated the day of closing (i.e. March 13th). The transferring language on the stock certificates, after having been filled in by someone after closing with the names of the transferees, reads as follows:

For Value Received, I, hereby sell, assign and transfer unto Robert E. Bartlett and Colleen A. Bartlett as joint tenants with Right of Survivorship and not as tenants in common [2500] Shares of the Capital Stock represented by the within Certificate. . . .¹⁰

¶ 11 Even though the summary judgment record supports, at least, the reasonable inference/conclusion that Robert was intended to be and was, in fact, a joint purchaser of the stock/company, along with Colleen, the trial judge granted Robert's motion for summary judgment and the COCA affirmed. We now reverse and vacate those rulings, respectively,...