First Nat. Bank and Trust Co. of Vinita v. Kissee
| Decision Date | 06 July 1993 |
| Docket Number | 69403,Nos. 69399,s. 69399 |
| Court | Oklahoma Supreme Court |
| Parties | FIRST NATIONAL BANK AND TRUST COMPANY OF VINITA, Oklahoma, a national banking association, Appellee, v. Jack KISSEE, Appellant, and Howard & Widdows, P.C., Gene C. Howard and P. Gae Widdows, individually, Additional Appellants. |
Appeal from the District Court of Craig County; Joseph G. Breaune, District Judge.
Action by banking association against guarantor to recover money judgment based on written guaranty agreement. District court rendered summary judgment in favor of banking association. The court assessed attorneys' fees and costs against guarantor's trial attorneys for filing 'Sham and False Pleadings,' and for obstruction and delay of banking association's action. Guarantor and his attorneys appeal.
JUDGMENT AFFIRMED IN PART AND REVERSED IN PART.
Thomas J. McGeaby, Logan, Lowry, Johnston, Switzer, West & McGeaby, Vinita, for appellee.
H. Gregory Maddux, Howard & Widdows, P.C., Tulsa, for appellant, Jack Kissee.
Lance Stockwell, Boesche, McDermott & Eskridge, Tulsa, for appellants, Howard & Widdows, P.C., Gene C. Howard & P. Gae Widdows.
Two questions are presented for our determination. 1 The first is whether the district court erred in granting summary judgment for the bank and dismissing the counterclaim. And two, whether the district court should have imposed in personam sanctions against the individual attorneys and their law firm. We answer both questions negatively.
Appellee, First National Bank and Trust Company of Vinita, Oklahoma (Bank), filed suit against Appellant, Jack Kissee (Guarantor) on an absolute and unconditional guaranty given by guarantor to the bank in the sum of $125,000.00. Guarantor retained the law firm of Howard and Widdows, P.C., (H & W), to represent him. H & W filed an answer asserting the affirmative defense of economic duress exercised by the bank in obtaining the guaranty. H & W filed a counterclaim (called a cross-petition below) requesting $250,000.00 in actual damages and $1 million in punitive damages. 2
After deposing guarantor, bank filed motions for summary judgment on the guaranty, and for sanctions against H & W for filing sham and false pleadings. Bank alleged H & W made numerous factual misrepresentations of a serious nature that both attorneys either knew or should have known were untrue. In their objection to the motions made by bank, H & W placed heavy reliance upon the affidavit of guarantor's oldest brother, Darrell Kissee, to further elaborate on their claim of economic duress. 3 Counsel for guarantor further alleged that bank breached both its covenant of good faith and fair dealings with guarantor and its oral agreement to release guarantor.
After completing its deposition of guarantor's brother, Darrell Kissee, bank renewed its motions for summary judgment on its case in chief, and sought dismissal of guarantor's counterclaims with prejudice. At a hearing on bank's renewed motions for summary judgment and for sanctions, H & W requested additional time to consider whether further discovery was necessary. The continuance was granted. Thereafter, attorneys for guarantor filed an amendment to their answer and counterclaim. Following arguments from both parties concerning bank's motions, the district court took the motions under advisement.
The district court entered summary judgment for bank on its case in chief, and dismissed the counterclaims. Ten days after the district court entered its judgment for bank, H & W filed a request for written findings of fact and conclusions of law, a motion to transfer the cause to another judge, and an application for a continuance. During a hearing to determine bank's attorneys' fees, the district judge held H & W's motion was filed out of time.
Relying upon its traditional equitable powers, and 12 O.S.Supp.1984 § 2011, the district judge taxed an in personam judgment as sanctions, (attorneys' fees and costs), in favor of bank and against H & W and each attorney individually in the total amount of $7,698.49. This was the amount the trial court found the bank spent to defend against the counterclaim and the affidavit filed by H & W. For the reasons below, we affirm in part and reverse in part the judgments of the district court.
Summary judgment is appropriate and should be granted only where it is clear there is no substantial controversy as to any material fact. 4 All inferences and conclusions to be drawn from facts contained in the pleadings, admissions, exhibits, depositions, affidavits, interrogatories and the like, must be viewed in the light most favorable to the party opposing the motion. 5 By eliminating any trial of factual issues, the district court determines what party is entitled to judgment as a matter of law. 6 However, a summary judgment should be denied if the facts concerning any issue raised in the case are conflicting, or if reasonable people, in the exercise of fair and impartial judgment, might reach different conclusions upon consideration of any issue set forth in the case. 7
When the movant has shown there is no genuine issue as to any material fact, the opposing party has the obligation of showing some probative evidence, formulated as specific facts, to justify a trial of the issues. 8 A party cannot merely rely upon conjecture or suppositions, and assert "that facts exist or might exist, [because such] is not sufficient to create a substantial controversy when the party moving for summary judgment has introduced evidence showing the existence of facts which would preclude recovery by the party against whom the motion was made." 9 Thus, in opposing a motion for summary judgment, no party can withhold evidence tending to support the allegations in the pleadings until time of trial. 10
Guarantor's youngest brother, Larry Kissee (Debtor), was indebted to bank for $125,000.00 on a promissory note. Debtor, a car salesman, bought stock in his place of employment, Kissee Motor Company, (Kissee Motors), a Miami, Oklahoma Ford dealership which was owned by Darrell Kissee (Darrell), Debtor's and guarantor's oldest brother. The note was guaranteed by guarantor's written promise to accept liability for payment of Debtor's obligation. 11 The guaranty was supposedly renewed one year later. When Debtor defaulted, bank invoked the guaranty, guarantor refused to pay, and bank brought this action. Debtor and Darrell are not parties in this action.
The guaranty given the bank by guarantor is plain and unambiguous, and there is no allegation of accident or mistake of fact. To induce bank to extend credit to debtor, guarantor executed an absolute guaranty by which he unconditionally promised payment of debtor's principal contract on default. 12 Other than default, the instrument embodies no prerequisite performance of an act by debtor or bank, nor any condition precedent before guarantor's liability is operative. Here, the undisputed evidence shows bank pleaded a legally cognizable claim against guarantor by establishing a valid and subsisting debt owed by guarantor on an absolute and unconditional guaranty. 13
However, guarantor alleges he was wrongfully induced to make the guaranty because bank falsely and intentionally misrepresented the extent of his liability. He says the bank did this by coercing Darrell to falsely represent to guarantor that the guaranty would be released when Darrell's unsecured indebtedness was sufficiently reduced.
Guarantor testified that bank's president was not the one who said guarantor would be released from the guaranty. Instead, guarantor admitted that Darrell made the statement, but in the presence of bank's president. These events, guarantor argues, are sufficiently blame worthy by the bank to negate the guaranty agreement. We disagree.
First, the independent nature of guarantor's obligation is wholly contractual. Thus, our inquiry must "focus on the precise terms of the guarantor's undertaking--the dimension or breadth of the promise." 14 In the absence of accident, fraud, or mistake of fact, when the language of a written contract is complete, unambiguous and free from uncertainty as to the parties' intentions, parole evidence of prior representations, contemporaneous agreements or understandings tending to change, contradict, or enlarge the plain terms of the written contract are inadmissible. 15 As a general rule of law, "[w]hether a contract is ambiguous to require extrinsic evidence to clarify the ambiguity is purely one of law for the court, and the construction of an unambiguous contract is a matter of law for the court." 16 Furthermore, with regard to guaranty agreements, the language used therein is construed most strongly against the guarantor. 17
Second, "fraud is never presumed and where a written agreement is attacked on the ground of fraud, that agreement will be upheld unless the allegations of fraud are established by clear and convincing evidence." 18 In the instant case, none of the elements of actual or constructive fraud, as set forth in 15 O.S.1991 §§ 58, 59 respectively, have been specifically pleaded and convincingly proved with clarity as required under 12 O.S.1991 § 2009. 19 Guarantor's arguments, based on Darrell's and not bank's alleged false representations prior to and contemporaneously with guarantor's execution of the guaranty agreement, even though made in the presence of the bank's official, are irrelevant, as are guarantor's allegations concerning Darrell's "burgeoning unsecured indebtedness to bank, and whether Darrell was on the verge of financial collapse." In MASTER V. BOYES, 20 this Court made it quite clear that:
[U]nder an absolute and unconditional guaranty, the duty is upon the guarantor to see that his contract of guaranty is fulfilled, and that the obligations of the principal are...
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