Durdahl v. Bank of Casper

• Decision Date: 24 April 1986
• Docket Number: No. 85-279,85-279
• Citation: 718 P.2d 23
• Parties: 1 UCC Rep.Serv.2d 1024 Lyle DURDAHL, Appellant (Defendant), v. BANK OF CASPER, a Wyoming banking corporation, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 23

718 P.2d 23

1 UCC Rep.Serv.2d 1024

Lyle DURDAHL, Appellant (Defendant), v. BANK OF CASPER, a Wyoming banking corporation, Appellee (Plaintiff).

No. 85-279.

Supreme Court of Wyoming.

April 24, 1986.

John I. Henley, of Vlastos, Brooks & Henley, P.C., Casper, for appellant (defendant).

Kenneth R. Marken, of Marken & Anest, Casper, for appellee (plaintiff).

Before THOMAS, C.J., BROWN, URBIGKIT and MACY, JJ., and GUTHRIE, J., Retired.

URBIGKIT, Justice.

The trial court granted summary judgment in favor of the Bank of Casper (Bank), the lender, in an amount of $54,535.29 for unpaid principal and accrued interest, plus accruing interest, $5,000.00 attorney's fees, and costs of $27.63, on a secured promissory note which was in default. Appellant, Lyle Durdahl, the borrower, claims that material factual issues exist which preclude summary judgment.

We reverse and remand.

Appellant Durdahl framed the issues:

1. "The question of how much, if any, money is owed to the appellee is a material question of fact and precludes summary judgment for the appellee."

2. "A material question of fact exists as to whether or not the appellee acted in a commercially reasonable manner subsequent to the repossession of certain collateral."

3. "The court erred in granting $5,000.00 in attorney's fees for the appellee's collection efforts."

Appellee Bank of Casper claims that:

1. "No genuine issue of material fact existed concerning appellee's prima facie case."

2. "Appellant's issues of fact in opposition are not material and/or admissible."

3. "The court did not err in making its award of attorney's fees to appellee."

An additional problem arises from the denial by the trial court of the Durdahl motion to file an amended answer and counterclaim, determined by the court to be "moot by virtue of this [summary judgment] ruling."

The facts in this case are of a nature best described as hard to believe. We state the facts that appear without conflict in the record on appeal, without any expectation of what a trial on the merits will adduce. Involved is a lending transaction to renovate a Greyhound bus for individual motor-home usage.

As we said in a recent case, Fiedler v. Steger, Wyo., 713 P.2d 773, 776 (1986):

"This court, as did the trial court, takes the record as presented for the summary-judgment hearing, and cannot recreate the facts which may have been or do not appear."

I Pleadings

First, we review the pleadings which come to us on appeal from summary judgment, wherein the Bank filed a complaint on a promissory note, alleging failure to pay, default and a principal balance due of $42,506, plus accrued and accruing interest. (It may be that the total was $40,000 principal, plus $2,506 added interest, plus accruing interest from an unstated date, if the affidavits of the defendant are accurate.)

By answer, Durdahl admitted the execution of the note, denied the default delinquency or amount due, and stated as affirmative defenses failure to state a claim, noncompliance with the Wyoming Uniform Commercial Code, breach of the loan agreement, and repossession of security which had not been resold.

The Bank moved for summary judgment, with attached affidavits, the first by an officer of the Bank, describing the note of $70,006 ($70,000 plus a title and filing fee of $6.00), due date of March 27, 1984, failure to repay, with an unpaid principal balance of $42,506, plus accrued and accruing interest based upon the current floating rate, two per cent above the prime rate of interest charged by the bank, which interest equaled $11,334.94, as of September 17, 1985, and an accrual rate thereafter. Also filed was an affidavit signed by a Casper attorney in regard to attorney's fees, which, without enumeration of the work involved or other facts, stated:

"5. A reasonable attorney's fee in this case is therefore Five Thousand Dollars ($5,000).

"6. This fee is consistent with and based upon the criteria set forth in the American Bar Association Standards relative to attorney's fees."

Durdahl filed a motion to file an amended answer and counterclaim, which amended answer more specifically contended for a set-off in a greater amount than was due on the note, and a counter-claim which alleged failure to advance funds as agreed, fraudulent charge to defendant's account, lender failure in a duty to insure the bus, repossession of security without disposition, conversion, loss of profit, destruction of collateral by act of the Bank, and fraudulent misrepresentation.

Two affidavits, one signed by Durdahl and the second by Donald L. Hedges, were attached as a resistance to the motion for summary judgment and in support of the motion for leave to amend which will be described more specifically in the statement of facts.

Based on this record, the district court granted summary judgment in the amount of $42,506 principal, accrued interest of $12,029.29 and accruing interest, and $5,000 attorney's fees. Further:

"That Defendant's 'Motion to File Amended Answer and Counterclaim' is moot by virtue of this ruling."

Durdahl then filed a motion to open judgment and for reconsideration and attached supplemental affidavits of Hedges and Durdahl. That motion was denied, and the Bank then proceeded in execution collection efforts, including garnishee notice and summons to attempt to garnishee Durdahl's wages. Each party filed a statement of proceedings which in significant detail are categorically in dispute, and the district court did not "review the respective 'Statement of Proceedings' filed by the parties herein and approve an appropriate and accurate Statement for the Clerk of the District Court to include in the Record on Appeal." Consequently, from the standpoint of facts, we will consider the filed affidavits in the record as the only facts now available for appellate review. ¹

II Facts Presented by Affidavits

Since the affidavits are not factually in specific conflict, and the Bank did not choose to file responsive affidavits to the extended affidavits filed by Durdahl and Hedges, we have a case for decision with the following rather interesting facts.

Durdahl approached the Bank of Casper with a proposal to borrow $70,000 to buy a Greyhound bus to convert through the services of Hedges into a motor home for resale. Signing a promissory note for $70,006, he gave an undetermined security interest (no one saw fit to attach a copy of any security documents to the affidavits or for filing in the record) in a Worthington engine, a gas compressor, and a Greyhound bus. We only know this by virtue of statements in the affidavits, and the fact that the promissory note and disclosure statement stated, "This note is further secured by Security Agreement dated 9/29/83, Worthington Engine, gas compressor, Greyhound Bus." The optional provision in the promissory note was not checked, which stated:

"________ I desire property damage insurance at a cost of $_______, for a period of __ months."

Likewise, a sentence was not checked which stated:

"________ I do not desire property damage insurance from lender and will provide proof of coverage or property damage insurance to lender as required."

Durdahl then entered into an agreement with Hedges to acquire and convert the bus into a motor home, and the Bank gave Hedges $30,000 to begin the project, as an advance on the Durdahl note. Hedges made a down payment of $10,000 on the bus from these funds, and moved the bus to his shop, where it was torn down and refurbishing commenced.

At this stage of renovation, the Bank refused to advance any more money to Durdahl on his $70,000 note, thus delaying the renovation project for at least two weeks.

For reasons then unexplained, the Bank approached Hedges and loaned him some money to finish the project, the amount thereof not being determinable from the present record. Thereafter, following exhaustion of the separate credit line of Hedges, the Bank then advanced Hedges another $10,000, and possibly, to make sense from the file, $12,500 which was charged to the Durdahl note and given directly to Hedges without either approval or knowledge of Durdahl.

Hedges stated in his affidavit that when the Bank loaned him the money to finish the work on the bus the Bank required Hedges to "put the title to the bus in their name," and, after the bus was completed, Donn Dorsett of the Bank gave him permission to take it anywhere and attempt to sell it.

With title (according to the record) in the Bank's name, and the bus then reconverted with a reasonable value of $125,000, and Hedges feeling that he had a buyer for the bus for $125,000 in the southern part of Wyoming, Hedges then stated that "the bus crashed when I stopped on Red Canyon to go to the bathroom, and it rolled down a hill and off the road."

Lo and behold, from the factual statements in the record, we do not know what happened thereafter to the residue of the bus. It seems to have evaporated. ² Prior to the accident in which the bus presumably was totaled, the Bank received a notice that the insurance had or would expire, but did not notify Hedges of the expiration of the insurance policy, and consequently there was no insurance at the time the unit was totaled. The Bank then repossessed a compressor from Durdahl, which they placed in Hedges' yard for safekeeping and where it apparently still is, or was at the time of oral argument.

A modest internal conflict in the Hedges affidavit does seem to exist:

" * * * [T]he Bank of Casper required that they be named as, and were in fact named as a loss payable insured on said bus,"

since as owner this would be unlikely.

The Durdahl affidavit is generally consistent with the Hedges affidavit in further describing the loan transaction and that a gas compressor was repossessed by the Bank and not thereafter liquidated as a chattel security and credited to the secured indebtedness, and in further saying:

" * * * [P]rior to the events which occurred above, I...