Geiger v. Tokheim
| Decision Date | 01 February 1996 |
| Docket Number | No. C 93-4019.,C 93-4019. |
| Citation | 191 BR 781 |
| Parties | Earl GEIGER, Plaintiff, v. John T. TOKHEIM and Mary Tokheim, Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
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John D. Mayne of Mayne & Mayne, Sioux City, Iowa, for Plaintiff Earl Geiger.
Steven D. Wolf and Terry M. Anderson, Haupman, O'Brien, Wolf & Lathrop, Omaha, Nebraska, for Defendants John T. Tokheim and Mary Tokheim.
TABLE OF CONTENTS
I. INTRODUCTION AND PROCEDURAL BACKGROUND ...................................784
II. STANDARDS FOR SUMMARY JUDGMENT ...........................................785
III. FACTUAL BACKGROUND .......................................................787
A. Undisputed Facts ......................................................787
B. Disputed Facts ........................................................788
IV. LEGAL ANALYSIS ...........................................................788
A. Issue Preclusion—Commercial Reasonableness ............................789
1. Iowa law ...........................................................790
2. Federal law ........................................................790
3. Commercial reasonableness ..........................................790
4. The bankruptcy court's findings ....................................793
a. Iowa issue preclusion ...........................................794
b. Federal issue preclusion ........................................795
5. Material fact questions ............................................795
B. Issue Preclusion-Tortious Interference With Prospective Contract ......796
V. CONCLUSION ...............................................................798
This case involves the sale of bank stock in accordance with a reorganization plan approved by a bankruptcy court and warrants the court's review of the determinations made by the bankruptcy court, as well as an examination of the policies and application of Section 9-507(2) of the Uniform Commercial Code, in order to effectively analyze the applicability of the familiar doctrine of issue preclusion. Defendants moved for summary judgment on the issues of commercial reasonableness and tortious interference with a prospective contractual relationship, arguing that these issues had been previously raised and rejected by the bankruptcy court. Plaintiff resisted this motion, contending that the bankruptcy court failed to make determinations on these issues, finding only that the public sale of this stock complied with the reorganization plan approved by the bankruptcy court.
The circumstances of this case involve the actions of Defendant John T. Tokheim and Mary Tokheim ("the Tokheims") in the sale and subsequent acquisition of the majority of stock in the Farmers State Bank of Charter Oak, Iowa. Plaintiff Earl Geiger, one of the trustees of the John W. Van Dyke Trust, filed his original petition in this matter in the Iowa District Court for Woodbury County on January 22, 1993, alleging nine counts, including a federal deposit insurance act violation, a claim that the Tokheims wrongfully and unlawfully auctioned the Bank's stock in a "commercially unreasonable manner," a breach of fiduciary duty, breach of a duty to act in good faith, tortious interference, and injury to a depository institution.1 On February 11, 1993, the Tokheims removed the action to this court based on diversity of jurisdiction pursuant to 28 U.S.C. § 1441. On February 19, 1993, the Tokheims filed their answer.
On March 16, 1993, the Tokheims moved to dismiss all of Geiger's claims, except Count VIII, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief could be granted. On December 30, 1993, Judge Donald O'Brien granted the Tokheims' motion in part and dismissed all of Geiger's claims except those found in Count III and the related prayer for damages found in Count VIII. Geiger contends in Count III of his second amended complaint that the Tokheims wrongfully and unlawfully auctioned off stock in a bank in a commercially unreasonable manner in violation of Iowa Code §§ 554.9504(3) and 554.9507(2). On April 7, 1994, Chief Bankruptcy Judge Irvin N. Hoyt issued an Order Determining Claim in Part and Setting Deadline for Filing Administrative Expense Claim and Computations of Interest in In re John W. Van Dyke, Bkr.Case No. L-88-01173S (Bankr.S.D.Iowa). On June 10, 1994, Judge Hoyt issued in the same case a Memorandum of Decision Re: Determination of the Claim of John Tokheim and Mary Tokheim. In both his order of April 7, 1994 and his memorandum of June 10, 1994, Judge Hoyt found the sale of the stock was conducted in compliance with the reorganization plan, confirmed by the bankruptcy court.
The Tokheims filed a motion for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), asserting that as a result of the April 7, 1994 order and the June 10, 1994 memorandum, both by Judge Hoyt, Geiger's claim is barred by operation of the doctrine of res judicata. Geiger resisted this motion on March 16, 1995. On May 24, 1995, this court denied the Tokheims' motion to dismiss, concluding that the Tokheims failed to satisfy the requirements of the doctrine of issue preclusion under either Iowa or federal law. The court found that it could not determine from Judge Hoyt's Order and his subsequent Memorandum if the issue before the court — whether the sale of the Stock was commercially reasonable — was raised and addressed in the prior litigation in the bankruptcy court.
On August 16, 1995, Geiger moved to amend and substitute his complaint, and Judge Jarvey granted this motion on September 18, 1995. The Tokheims filed an answer to this amended complaint on September 29, 1995. Also, on September 29, 1995, the Tokheims filed a motion for summary judgment, along with a memorandum in support of their motion and a statement of undisputed facts. The Tokheims also filed an addendum to their memorandum in support of motion for summary judgment and an attachment to this addendum. On October 17, 1995, Earl Geiger filed a resistance to the Tokheims' motion. Lastly, upon receiving the court's permission, the Tokheims filed an amended statement of undisputed facts in support of their motion for summary judgment on November 17, 1995. Before turning to the factual background for the pending motion, the court must first consider the standards applicable to disposition of a motion for summary judgment.
The Eighth Circuit Court of Appeals recognizes "that summary judgment is a drastic remedy and must be exercised with extreme care to prevent taking genuine issues of fact away from juries." Wabun-Inini v. Sessions, 900 F.2d 1234, 1238 (8th Cir.1990). On the other hand, the Federal Rules of Civil Procedure have authorized for nearly 60 years "motions for summary judgment upon proper showings of the lack of a genuine, triable issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). Thus, "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Wabun-Inini, 900 F.2d at 1238 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986)); Hartnagel v. Norman, 953 F.2d 394, 396 (8th Cir.1992).
The standard for granting summary judgment is well established. Rule 56 of the Federal Rules of Civil Procedure states in pertinent part:
Fed.R.Civ.P. 56(b) & (c) (emphasis added); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Beyerbach v. Sears, 49 F.3d 1324, 1325 (8th Cir.1995); Munz v. Michael, 28 F.3d 795, 798 (8th Cir.1994); Roth v. U.S.S. Great Lakes Fleet, Inc., 25 F.3d 707, 708 (8th Cir.1994); Cole v. Bone, 993 F.2d 1328, 1331 (8th Cir.1993); Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir.1990); Wabun-Inini, 900 F.2d at 1238 (citing Fed.R.Civ.P. 56(c)).2 A court considering a motion for summary judgment must view all the facts in the light most favorable to the nonmoving party, here Geiger, and give Geiger the benefit of all reasonable inferences that can be drawn from the facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962)); Munz, 28 F.3d at 796; Allison v. Flexway Trucking, Inc., 28 F.3d 64, 66 (8th Cir.1994); Johnson v. Group Health Plan, Inc., 994 F.2d 543, 545 (8th Cir.1993); Burk v. Beene, 948 F.2d 489, 492 (8th Cir.1991); Coday v. City of Springfield, 939 F.2d 666, 667 (8th Cir.1991), cert. denied, 502 U.S. 1094, 112 S.Ct. 1170, 117 L.Ed.2d 416 (1992).
Procedurally, the moving parties, the Tokheims, bear "the initial responsibility of informing the district court of the basis for their motion and identifying those portions of the...
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