Guaranty Federal Sav. & Loan Ass'n v. Horseshoe Operating Co., 05-87-00818-CV

• Decision Date: 23 March 1988
• Docket Number: No. 05-87-00818-CV,05-87-00818-CV
• Parties: 6 UCC Rep.Serv.2d 774 GUARANTY FEDERAL SAVINGS & LOAN ASSOCIATION, Appellant, v. The HORSESHOE OPERATING COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 519

748 S.W.2d 519

6 UCC Rep.Serv.2d 774

GUARANTY FEDERAL SAVINGS & LOAN ASSOCIATION, Appellant, v. The HORSESHOE OPERATING COMPANY, Appellee.

No. 05-87-00818-CV.

Court of Appeals of Texas,

Dallas.

March 23, 1988.

Rehearing Denied April 25, 1988.

Michael P. Lynn, Susan B. Greenberg, Dallas, for appellant.

Marvin Thomas, Nathan K. Griffin, Dallas, for appellee.

Before WHITHAM, ROWE and THOMAS, JJ.

WHITHAM, Justice.

Appellee, The Horseshoe Operating Company, sued appellant, Guaranty Federal Savings and Loan Association, on Guaranty's "official check." We must determine if that check is analogous to a cashier's check, which is deemed accepted when issued and is, therefore, not subject to a stop-payment order. Both parties filed motions for summary judgment. The trial court granted Horseshoe's motion and denied Guaranty's motion. We conclude that the check is analogous to a cashier's check. Hence, we treat the check as a cashier's check not subject to a stop-payment order. As to Horseshoe's attorney's fees, we conclude that there is a genuine issue of fact as to the reasonable amount of Horseshoe's attorney's fees. Accordingly, we affirm the trial court's judgment except as to the award of attorney's fees to Horseshoe. We reverse the trial court's judgment insofar as it awards attorney's fees to Horseshoe. We sever Horseshoe's cause of action for attorney's fees and remand Horseshoe's cause of action for attorney's fees to the trial court for determination of the reasonable amount of attorney's fees, if any, that Horseshoe should recover from Guaranty.

The function of a summary judgment is not to deprive a litigant of his right to a full hearing on the merits of any real issue

                of fact, but to eliminate patently unmeritorious claims and untenable defenses.   Gulbenkian v. Penn, 151 Tex. 412, 415-16, 252 S.W.2d 929, 931 (1952).  The standards for reviewing a motion for summary judgment are well established.  As mandated by the Supreme Court of Texas, they are as follows
                

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.

3. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor.

Nixon v. Mr. Property Management, 690 S.W.2d 546, 548-49 (Tex.1985). It is not the purpose of the summary-judgment rule to provide either a trial by deposition or a trial by affidavit, but rather to provide a method of summarily terminating a case when it clearly appears that only a question of law is involved and that there is no genuine issue of fact. Gaines v. Hamman, 163 Tex. 618, 626, 358 S.W.2d 557, 563 (1962). With these principles in mind, we look to the summary-judgment proof.

On the morning of Tuesday, July 23, 1985, Donald Rubin, who was a customer of Guaranty, entered the Dallas branch of Guaranty to make a deposit. While there, Rubin told one of the employees that his associate Leo Merkow would be coming in later, with a friend, to make a large deposit. Merkow did come in later that morning, with Alan Parmet, and they brought a check, signed by Nick Zaika and drawn on the account of Royall Chevrolet & Buick Company at Citizens State Bank of Malakoff, Texas. The check, in the amount of $1,990,000.00, was payable to the order of Merkow, endorsed by him and deposited into a new account with Guaranty in the name of Parmet. About thirty minutes after Merkow and Parmet left, Parmet returned to Guaranty to obtain $900,000.00 of the funds that he had just deposited, claiming he had forgotten to do so previously. Parmet drew a $900,000.00 check on the newly opened account, payable to Guaranty's order. Parmet also filled out an application for an "official check" of Guaranty, in that same amount, to be made payable to the order of "Binnon & Co." Guaranty did issue its check number 637571831, drawn on Citibank (New York State), N.A., for $900,000.00 payable to the order of Binnon & Co., as requested by Parmet. Parmet left the offices of Guaranty with the check.

Sometime that afternoon, Rubin spoke on the telephone with Ted Binion in Las Vegas, Nevada. Ted Binion is a part owner and the manager of the Binion's Horseshoe Casino in Las Vegas. Rubin told Ted Binion that he was bringing some other gentlemen out to Las Vegas that day and that he had a bank check in the amount of $900,000.00 which he wanted the casino to cash. Rubin gave Ted Binion the check number, the name of the remitter, and the bank name. Some hours later, David Liner, a vice president of Guaranty, received a telephone call from the Valley National Bank in Las Vegas. Liner was asked whether Guaranty had issued a $900,000.00 check, and he responded that it had not. Liner did not know of the check's issuance at that time. A few hours later, Liner received a second telephone call. This call came at about 5:30 p.m. Dallas time when the branch was being closed for the day. The call was from Ted Binion and Jack Binion in Las Vegas. Liner's testimony is that he was asked whether Guaranty had issued a $900,000.00 check, and he again said no. When told that the check had the initials E.B. on it (Guaranty had an employee named Edie Brown), Liner put the call on hold. He verified then that in fact a check had been issued and told the Binion brothers that it had. Upon inquiry, he also verified that Guaranty was in fact a financial institution and not some "back-room operation." At this time the Binions had the check since Parmet, Rubin, Merkow, and Zaika arrived at the casino just about the time Ted Binion was talking to Liner on the telephone. It is not clear whether Ted Binion made one telephone call to Guaranty, or two in quick succession; nevertheless After the telephone discussions, Horseshoe took the check from Parmet and issued $900,000.00 worth of chips to Parmet in exchange. Parmet and Rubin played blackjack at the Horseshoe casino with the chips. They lost at least $890,000.00 worth of chips in three to four hours, betting an average of $80,000.00 on each hand dealt. After losing the money, the gambling party wanted Ted Binion to get them "some girls" and to go to the Union Plaza Hotel, where they were staying. Ted Binion went with them to the hotel and told the Union Plaza to bill him, i.e., Horseshoe, for their expenses. Horseshoe also reimbursed Rubin for the leasing expense of the jet aircraft that had been chartered to take the group to Las Vegas, provided them with limousine service, and gave them $5,000.00 for "some walking around money."

                at some point Binion spoke to several Guaranty employees.  Binion testified that because of the large amount of the check, he was concerned that an imposter may have been planted at Guaranty to receive his telephone call.  Robert Worthen, Horseshoe's credit manager, testified he also called Guaranty.  Worthen stated that on July 23, around 3:00 p.m., Las Vegas time, Worthen called Guaranty in Dallas, and talked to a woman whose initials were E.B.  Worthen asked E.B. if she had issued the official check in the amount of $900,000.00, and E.B. stated that she had.  E.B. further stated that she knew what she was doing when she authorized the issuance of the check and the check was "good funds."   At this point we note a dispute between Liner and the Binions as to what Liner told Ted and Jack Binion about the Guaranty check.  Liner's testimony is that he did not confirm or deny the validity of the check, but only confirmed that it had been issued.  Ted Binion testified that at the end of the day when Liner was closing the branch and seeing that all the daily affairs were wrapped up, Liner told him that the check was "absolutely good."   Liner, however, testified that he told Binion at the start of the conversation that Guaranty had not issued such a check and that at that time Binion did not tell Liner the initials E.B. were on the check
                

The next day, July 24, 1985, Worthen arrived for work at the casino about 7:00 a.m. and found a note telling him to process the Guaranty check as fast as he could. Worthen testified that he called Jack Binion to ask him what to do with the check and Jack told him to send it to the bank. Worthen also testified that he called Citibank in New York upon reading the back of the check where Worthen said it read, "if there's any questions about any checks, call this number." Worthen said he had no questions, but was "just curious," so he phoned Citibank. A Citibank employee told Worthen that Citibank had just received a stop-payment order on the check. At about the same time Worthen was arriving at work in Las Vegas, Parmet was already back in Dallas and waiting for Guaranty to open its doors for the day. When he was allowed in, he told Edie Brown and Liner that he wanted Guaranty to stop payment on the check he had purchased the day before. His reason was that the Royall Chevrolet & Buick check, with which he had opened his new account, was drawn on insufficient funds. Guaranty asked Parmet to fill out a stop-payment request form and immediately notified Citibank by telephone and in writing to stop payment on the check. Liner telephoned the Citizens State Bank in Malakoff that morning also to inquire whether the Royall Chevrolet & Buick check was in fact good. Liner was told that the check would not clear, and it eventually was returned stamped "payment stopped." Liner also received a call on July 24th from Ted Binion, at about 11:00 a.m., inquiring what had happened. Liner confirmed that payment had been stopped and told Binion why. Liner testified that as far as he knew "Binion & Company" had nothing whatsoever to do with the issuance of the check. Possessed of the check, Horseshoe demanded of Guaranty that Guaranty pay the check. Guaranty refused, and this lawsuit...