First Sec. Bank of Beaver, Okl. v. Taylor
Decision Date | 21 May 1992 |
Docket Number | Nos. 91-6154,91-6159,s. 91-6154 |
Citation | 964 F.2d 1053 |
Parties | FIRST SECURITY BANK OF BEAVER, OKLAHOMA, Plaintiff-Appellant/Cross-Appellee, v. Bobby C. TAYLOR, and Vonquitta Taylor, Defendants-Appellees/Cross-Appellants, Berton Starcher, agent for Eugene Starcher, Alice Rudy Duke, Berton Starcher, Suzanne Starcher and Sandra Starcher Rice; Berton Starcher, individually, if he be living or if deceased his heirs, unknown heirs, executors, administrators, devisees, trustees, assigns and unknown successors in interest of Berton Starcher; Eugene Starcher, individually; Alice Rudy Duke, individually; Suzanne Starcher, individually; Sandra Starcher Rice, individually; and United States of America, ex rel. Farmers Home Administration, Defendants. |
Court | U.S. Court of Appeals — Tenth Circuit |
Robert C. Smith, Jr. (John T. Edwards, with him on the briefs) of Monnet, Hayes, Bullis, Thompson & Edwards, Oklahoma City, Okl., for plaintiff-appellant/cross-appellee.
Wm. Brad Heckenkemper (Allen E. Barrow, Jr. of Barrow Gaddis Griffith & Grimm, and Paul D. Brunton, Tulsa, Okl., with him on the briefs) of Barrow Gaddis Griffith & Grimm, for defendants-appellees/cross-appellants.
Before ANDERSON, ALDISERT, * and BRORBY, Circuit Judges.
The First Security Bank (Bank) sued its Borrowers, Bobby C. and Vonquitta Taylor, to foreclose its security on a loan admittedly in default. Borrowers counterclaimed alleging a breach of the lending agreement and negligent servicing of the loan. The jury returned a verdict in favor of Borrowers. Both parties appeal. Bank contends the court should have directed a verdict in its favor. Borrowers contend the trial court erred by not submitting all their theories of liability to the jury and by excluding certain expert testimony. We affirm.
The facts before us reveal a story typically found in the late 1970's and 1980's. Borrowers, who raised wheat and cattle, began their relationship with Bank in the early 1970's when they commenced expanding their operations. During this relationship, Bank typically loaned Borrowers 100 per cent of the money Borrowers needed to buy cattle. By 1986, Borrowers' debt to the Bank had grown to $130,000. Borrowers were unable to satisfy this debt. Bank was unwilling and unable to extend further credit.
The parties arrived at a solution to their problems. Borrowers applied to the Farmers Home Administration (FHA) for a loan guarantee of $165,000, which was granted. The essence of this agreement was that Bank would make a new loan to Borrowers with the FHA guaranteeing repayment. Borrowers used approximately $130,000 of the guaranteed loan proceeds to repay the existing loan and the remaining $35,000 as farm operating capital. According to Borrowers, the purpose of the guaranteed loan was to shore up Bank's loan so Bank could continue to let Borrowers operate as they had in the past.
Borrowers' farm income began to decline shortly after the new loan was made. Bank would not loan Borrowers any further money to purchase cattle. Consequently, Borrowers went into default on the guaranteed loan in 1987.
Bank commenced this action seeking to collect its debt by foreclosing the real estate mortgage and several security agreements. Borrowers raised various defenses and many counterclaims; however, insofar as is relevant to this appeal, Borrowers asserted: (1) a breach of an oral contract by Bank to loan additional monies outside the guaranteed loan to finance Borrowers' cattle operations; and (2) Bank's negligent servicing of the loan.
During the course of the trial, Borrowers' evidence tended to establish an officer of the Bank promised to finance Borrowers' cattle operation outside the guaranteed loan. The jury returned its verdicts finding: (1) Bank breached its agreement to loan monies outside the guaranteed loan preventing Borrowers' performance and thus Bank could not recover its loan; and (2) Bank negligently serviced the guaranteed loan but Borrowers failed to prove any damages.
Both parties appeal.
Bank complains the trial court erred by not directing a verdict or granting judgment notwithstanding the verdict in its favor. We review de novo the trial court's decision not to grant these motions. Anderson v. Phillips Petroleum Co., 861 F.2d 631, 634 (10th Cir.1988). In so doing, we view the evidence in the light most favorable to the nonmoving party. Richards v. Attorneys' Title Guar. Fund, Inc., 866 F.2d 1570, 1574 (10th Cir.), cert. denied, 491 U.S. 906, 109 S.Ct. 3189, 105 L.Ed.2d 697 (1989). We will overturn the trial court's refusal to grant such motions only if it appears reasonable minds could not differ as to the outcome. Anderson, 861 F.2d at 635. With these standards in mind, we review Bank's various assertions regarding its motions for directed verdict and judgment notwithstanding the verdict.
Borrowers presented evidence Bank made an oral promise to loan additional money outside the loan to finance Borrowers' cattle operation. Borrowers raised, both as a defense and as a counterclaim, the fact that Bank breached its oral contract. The trial court instructed the jury that if a breach of the oral agreement occurred and if this breach prevented Borrowers' payment of the loan, Bank could not recover from Borrowers under the loan. The jury so found.
On appeal, Bank asserts that under Oklahoma law an oral agreement to loan an unknown amount for seven years is so uncertain it cannot constitute a contract. Accordingly Bank argues Borrowers cannot base a defense or counterclaim upon such an agreement. Therefore Bank contends the trial court should have granted a directed verdict or a motion for judgment notwithstanding the verdict in its favor. Borrowers contend Bank never made such an argument until it filed its motion for judgment notwithstanding the verdict and Bank therefore is precluded from now asserting this issue.
At the close of Borrowers' case, counsel for Bank moved for a directed verdict stating:
[T]he evidence, and any reasonable inference that may be drawn therefrom, wholly and totally fails to make out a case in favor of the defendants [Borrowers] on its counterclaim, and the plaintiff's case--the evidence in the plaintiff's case is conclusive as to the debt.
Fed.R.Civ.P. 50(a) expressly requires a motion for a directed verdict to "state the specific grounds therefor." 1 We have stated previously, concerning this rule, that "[t]echnical precision is not necessary in stating grounds for the motion so long as the trial court is aware of the movant's position." United States v. Fenix & Scisson, Inc., 360 F.2d 260, 266 (10th Cir.1966), cert. denied 386 U.S. 1036, 87 S.Ct. 1474, 18 L.Ed.2d 599 (1967).
Bank's motion apprised the trial court only that Bank believed the evidence was insufficient to establish Bank's breach of an oral agreement. Bank wholly failed to advise the trial court of the legal significance of the existing evidence. The record does not reflect Bank argued the oral agreement was too uncertain to be enforceable during its motion for directed verdict.
The Bank's sole "objection" regarding the oral agreement came in the form of an objection as to the sufficiency of the evidence. This court will not now speculate as to whether Borrowers could have offered evidence to comply facially with Oklahoma law concerning specificity. Bank had the obligation to apprise both the trial court and the opposing party of the basis of its motion for directed verdict, and this it failed to do.
When a movant fails to state the specific grounds for its directed verdict motion, our case law requires the moving party to demonstrate the trial court was aware of the moving party's position. Bank asserts the trial court was aware of Bank's position by directing our attention to its motion for directed verdict on Bank's claim against Borrowers and to a colloquy between court and counsel concerning Borrowers' negligent servicing claim. Neither reference supports Bank's argument the trial court understood the grounds for the motion for directed verdict. As we recognized earlier, Bank's motion for directed verdict only mentioned the sufficiency of the evidence. The record demonstrates no reference to the uncertainty or the enforceability of the oral agreement. Likewise, review of the discussion regarding Borrowers' negligent servicing claim reveals no evidence that the court was aware Bank was asserting the oral agreement was too uncertain to be enforced.
The record reveals the first instance Bank argues uncertainty of the oral agreement is in its motion for judgment notwithstanding the verdict. However, a party is precluded from relying upon grounds in a motion for judgment notwithstanding the verdict that were not previously raised in support of the motion for a directed verdict. Karns v. Emerson Electric Co., 817 F.2d 1452, 1455 n. 2 (10th Cir.1987). In the case before us, Bank failed to apprise the trial court of the issue it now desires to raise until it made its motion for judgment notwithstanding the verdict. We conclude Bank is simply too late, which now precludes our ruling upon this issue.
Bank argues we should nevertheless decide this issue as the trial court's failure to correct the verdicts amounts to plain error constituting a miscarriage of justice. The trial court's failure to sua sponte identify and rule upon an issue of state contract law should not ordinarily be regarded as plain error, and under the facts of this case, we are not inclined to label it as such. Consequently, we affirm the trial court's decision to deny Bank's motions for directed verdict and judgment notwithstanding the verdict.
Bank next argues Bank's oral agreement to finance Borrowers' cattle operations is unenforceable under the Oklahoma Statute of Frauds 2 as the agreement was to make cattle loans for seven years....
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