Geiler v. Arizona Bank, s. 1
| Decision Date | 17 July 1975 |
| Docket Number | Nos. 1,CA-CIV,s. 1 |
| Parties | , Blue Sky L. Rep. P 71,225 Lenard F. GEILER, Appellant, v. The ARIZONA BANK, Appellee. Lenard F. GEILER, Appellant, v. Stan A. TANNER et ux., Compass Realty and Investment Corporation, Michael S. Tanner, et ux., Jennifer Day Enterprises, Inc., and United Ranches Corporation, Appellees. 2235, 1 2251. |
| Court | Arizona Court of Appeals |
This is an action for breach of the Arizona Securities Statutes, the Federal Securities Statutes and Regulations, and for common law fraud. The action arises out of the sale of a Nevada ranch which was to be accomplished by an exchange of stock and a cash payment. The appellant, Lenard F. Geiler (Geiler), initiated this action against S. A. Tanner (Tanner), and his wife; his son, Michael S. Tanner and wife, his brother, M. J. Tanner and wife; Eugene Redfern (Redfern), a former branch manager of the Arizona Bank and his wife; The Arizona Bank (Bank); and Joseph Raineri, Sr. (Raineri), the then lawyer for Tanner, his son, and several of the corporations controlled or used by Tanner in the alleged transaction. The essential allegations of the lawsuit are that Tanner, with the active aid of his lawyer, Raineri and his banker, Redfern, defrauded Geiler by swindling him out of his Nevada ranch, valued from $500,000 to $750,000 in the record, leaving him with $20,000 in cash and two different blocks of allegedly worthless stock.
The initial complaint was filed on June 10, 1970. Subsequent to this usual start, there was a series of motions to dismiss, for more definite statement, for entry of default, for compelling answers to interrogatories, and for summary judgment. Interspersed with these pleadings were answers, an amended complaint and amended answers. The matter proceeded in a halting fashion through these and other proceedings until some two years later summary judgments were granted and entered in favor of Tanner, his wife, Compass Realty and Investment Corporation, Michael S. Tanner (son), Jennifer Day Enterprises, Inc., and United Ranches Corporation, as to Count II only of the four count complaint; and as to Eugene E. Redfern, and his wife, and the Arizona Bank as to all counts contained in the complaint. These judgments were entered as final pursuant to Rule 54(b), Ariz.R.Civ.P., 16 A.R.S. While summary judgment was also granted Raineri by minute entry, no judgment was entered thereon and that matter is part of the action still pending in the trial court. Rule 54(b), supra.
The appealable summary judgments were entered at three different times and two separate notices of appeal were filed. All matters were consolidated in this Court and a single set of briefs and one consolidated oral argument held.
Geiler advanced no argument whatsoever in his brief or oral argument regarding Count IV of the complaint, which alleges violations of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j, and Rule X--10B--5 of the Securities and Exchange Commission, 17 C.F.R. § 240.10b--5. as it might relate to Redfern and The Arizona Bank. None of the questions presented 'fairly comprise' this count, Rule 5(b)(7), Rules of the Arizona Supreme Court, 17A A.R.S., and it was therefore not considered or reviewed by the Court. Glenn v. Chenoweth, 71 Ariz. 271, 226 P.2d 165 (1951).
Where debatable issues are raised on appeal (see: Summary Judgment and substantive matters, infra), failure to file a brief generally constitutes a confession of reversible error. Town of Cottonwood v. Evans, 13 Ariz.App. 595, 480 P.2d 16 (1971); Tiller v. Tiller, 98 Ariz. 156, 402 P.2d 573 (1965). In view of the necessity to fully review the record to determine the propriety of summary judgment, and in view of the potential liability of The Arizona Bank resting solely on the alleged conduct of Redfern, the cause is reversed as to Redfern on the merits of the issues before the Court, as well as for his failure to file briefs and otherwise participate in the action here.
After spending the better part of several months viewing and reviewing the voluminous record before the Court, including the pleadings, memoranda, interrogatories, numerous depositions and almost innumerable exhibits, it is our opinion that this is a classic example of litigation unsuited for summary resolution. While there may be some agreement as to the general transaction, i.e., the sale of a ranch, there is great dispute as to everything else--who was involved, the level of their involvement, the reasons for their involvement, and perhaps most importantly, their mental state and knowledge regarding the key issues of fraud and misrepresentation and the status of the stock involved in the transactions. Summary judgment is rarely appropriate in cases where state of mind is a key issue. Peterson v. Valley National Bank, 90 Ariz. 361, 368 P.2d 317 (1962); Reidy v. Almich, 4 Ariz.App. 144, 418 P.2d 390 (1966); In re Estate of Sherer, 10 Ariz.App. 31, 455 P.2d 480 (1969). See also: Ong Hing v. Arizona Harness Raceway, Inc., 10 Ariz.App. 380, 459 P.2d 107 (1969).
The general law on summary judgment hardly needs citations. Summary judgment should not be granted if, upon an examination of the entire record, it is determined that there are any disputed facts which, if found to be true by the trier of fact, could affect the final judgment. Where summary judgment has been granted by the trial court, the reviewing court must view the evidence in a light most favorable to the losing party and give such party the benefit of all the evidence and all favorable inferences that may be reasonably drawn therefrom. Lundy v. Prescott Valley, Inc., 110 Ariz. 362, 519 P.2d 61 (1974); Dutch Inns of America, Inc. v. Horizon Corporation, 18 Ariz.App. 116, 500 P.2d 901 (1972); Livingston v. Citizine's Utility, Inc., 107 Ariz. 62, 481 P.2d 855 (1971); Serna v. Statewide Contractors, Inc., 6 Ariz.App. 12, 429 P.2d 504 (1967); Cummings v. Prater, 95 Ariz. 20, 386 P.2d 27 (1963). Litigants are entitled to a trial where there is the slightest doubt as to the essential facts. Livingston v. Citizen's Utility, Inc., supra.
In the remainder of this opinion, we set forth the facts in this light. By so doing, this Court expresses no opinion whatsoever as to what ultimate facts might be found by the appropriate trier of fact, be it a jury or the court sitting without a jury. It is entirely possible that a fact finder might conclude that this transaction was concluded without any fraud, misrepresentation, or culpability whatsoever. As will be shown, however, the opposite conclusion is also possible, thus making summary judgment inappropriate.
In December of 1968 Geiler entered negotiations with United Equities Inc., of which Tanner was general manager. Geiler was interested in selling and United Equities, Inc. was interested in purchasing the Cherry Creek Ranch, situated in White Pine County near Ely, Nevada. The parties reached an agreement whereby Geiler was to incorporate the Cherry Creek Ranch and thereafter exchange all the stock of the newly-formed corporation for approximately $50,000 in cash and 45,000 shares of United Equities stock. Pursuant to their agreement a Nevada corporation, United Ranches, Inc. was formed by Tanner's Nevada lawyer with the Cherry Creek Ranch as its sole asset. An escrow was established by an oral agreement between the parties, but Geiler subsequently terminated that escrow when United Equities failed to deposit the $50,000 cash amount with the escrow agent. Another escrow was established in January, 1969, but that was also subsequently terminated by Geiler when the purchaser failed to deposit the requisite cash with the escrow agent.
Negotiations for the sale of the Cherry Creek Ranch were renewed in the ensuing months. At this stage, however, Tanner proposed to purchase the ranch for himself and not for or through United Equities, Inc. The parties reached an agreement and an escrow was established with Tanner's attorney, Joseph C. Raineri, Sr., on or about March 31, 1969, on the following terms: in exchange for 100% Of his United Ranches stock, Geiler was to receive $20,000 in cash immediately, $30,000 in cash within six months, and 45,000 shares of United Equities stock. Both parties deposited numerous documents pursuant to the agreed-upon escrow instructions, but Tanner failed to deposit the initial $20,000 in cash. On or about May 13 or 14, 1969, Raineri notified Geiler and Tanner that he did not wish to continue as escrow agent in their transaction as he felt that his facilities for safe-keeping the parties' important documents, particularly the stock certificates, were inadequate. Thereupon the Raineri escrow was terminated and the parties, at Tanner's suggestion, proceeded to the Arizona Bank, 7th Street and McDowell branch, in anticipation of reviving the escrow with a new agent. The branch manager, Mr. Eugene Redfern, agreed to hold the documents for the parties. Among the documents submitted to Redfern by the parties was Tanner's promissory note for the $30,000 due within six months in accord with the Raineri instructions. Tanner also deposited with Redfern 10,000 shares of Delta Corporation stock to secure...
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