Haines Pipeline Const., Inc. v. Exline Gas Systems, Inc.
| Decision Date | 11 June 1996 |
| Docket Number | No. 78332,No. 3,78332,3 |
| Citation | 1996 OK CIV APP 75,921 P.2d 955 |
| Parties | 1996 OK CIV APP 75, 30 UCC Rep.Serv.2d 246 HAINES PIPELINE CONSTRUCTION, INC., Plaintiff, v. EXLINE GAS SYSTEMS, INC., Appellant, and Federal Deposit Insurance Corporation, as liquidating agent of Security Bank & Trust Company of Midwest City, Appellee, and UNITED OKLAHOMA BANK, a State Corporation, Plaintiff, v. Ted MOSS, an Individual; Ted Moss d/b/a Moss Lawson Industries, and Exline Gas Systems, Inc., Appellants. Court of Appeals of Oklahoma, Division |
| Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
Appeal From the District Court of Beaver County, Oklahoma Honorable George Leach, Judge.
Fred S. Morgan and Richard D. Herren, Reynolds, Ridings, Vogt & Morgan, Oklahoma City, for Appellee, FDIC.
This appeal arises from a trial court summary adjudication order in favor of Appellee Federal Deposit Insurance Corporation (FDIC) on a note executed by Appellant Exline Gas Systems, Inc. (Exline) and its president, Ted Moss. In addition, the trial court also granted judgment against Moss on various guaranties which FDIC claimed he had executed to guarantee that debt. Exline and Moss contend the trial court erroneously entered summary judgment in favor of the FDIC because Exline and Moss were entitled to judgment as a matter of law, or, at the least, issues of controverted fact precluded summary judgment for FDIC.
Summary judgment must be based upon the unique facts and record of each case, and, if reasonable minds in the exercise of fair and impartial judgment might reach different conclusions, should be denied. Northrip v. Montgomery Ward & Co., 529 P.2d 489 (Okla.1974). We must examine the pleadings and evidentiary material submitted to the trial court and view all inferences and conclusions that can be drawn therefrom in the light most favorable to the party opposing the motion. Johnson v. Mid-South Sports, Inc., 806 P.2d 1107 (Okla.1991). Any ruling on a motion for summary judgment must be made on the record actually presented and not on the record potentially possible. Anderson v. Falcon Drilling Co., 695 P.2d 521 (Okla.1985). The evidence of a controverted fact precluding summary judgment may be either presented by the party opposing the motion or shown to exist in the movant's own evidentiary materials. Hadnot v. Shaw, 826 P.2d 978 (Okla.1992).
Most of the material facts are undisputed. On October 11, 1983, Ted Moss, as chairman of Exline, signed a $299,000 note in favor of Security Bank & Trust Company of Midwest City (Security). That same day, Moss also signed a guaranty of that note. On June 12, 1984, Moss signed a $611,000 note, both individually and as chairman of Exline, and a guaranty of the note. The $611,000 note was secured by a mortgage on a gas gathering system.
Haines Pipeline Construction, Inc. (Haines), who had supplied labor and materials used in the construction of the gas gathering system, filed an action on October 12, 1984, against Exline, Security, and United Oklahoma Bank to foreclose a mechanic's and/or materialman's lien. Moss was not named as a party. Security entered an appearance in November 1984 and filed an answer in December 1984. In its answer, Security alleged it had an interest in rights of way assigned to Exline and held a mortgage for $299,000. Haines received judgment on its lien on July 8, 1985.
While Haines' suit was pending, Security experienced fiscal difficulties. FDIC was appointed as its receiver in August 1985 and acquired all of Security's assets. In addition to filing a cross-petition and counterclaims in the Haines lawsuit, United Oklahoma Bank filed a separate lawsuit against Moss, Exline, Security, and several other persons and business entities on May 20, 1985. The FDIC also became the receiver of and successor to United Oklahoma Bank while the actions were pending, as well as serving as liquidating agent for another bank involved in the United Oklahoma Bank lawsuit. 1
On October 7, 1985, FDIC filed an amended answer, cross-petition and counterclaim based on the notes, mortgages, and guaranty documents acquired from Security in the United Oklahoma Bank lawsuit. FDIC sought to foreclose the mortgage on the gas gathering system and appended in support of its claims copies of notes and guaranties. Although the text refers to both a guaranty of the $611,000 note (designated Exhibit G) and an unlimited guaranty (designated Exhibit J) both allegedly executed by Moss on June 12, 1984, only the unlimited guaranty appears among the unlabeled pages attached to the answer, cross-petition and counterclaim.
The judgment granted Haines on July 8, 1985, was corrected in an order entered June 20, 1986, and a special execution and order of sale was entered that same day. The gas gathering system which secured Security's mortgage was sold at a sheriff's sale on August 12, 1986. The sale was confirmed. Haines received a portion of the sales proceeds and filed a release and satisfaction of judgment on August 22, 1986. In November 1990, the Haines and United Oklahoma Bank lawsuits were consolidated. Subsequently, on January 22, 1991, the trial court ordered $4,006.41 left from the 1986 "sheriff's sale of the Exline Pipeline" paid to FDIC. FDIC's acknowledgment of receipt of the funds was filed on February 4, 1991.
On February 7, 1991, FDIC filed a motion seeking summary judgment against Exline and Moss. FDIC claimed Moss had executed the $611,000 note, the $299,000 note, a limited personal guaranty of the $299,000 note (guaranty # 1), a limited personal guaranty of the $611,000 note dated June 12, 1984 (guaranty # 2), and an unlimited personal guaranty, also dated June 12, 1984 (guaranty # 3). FDIC attached copies of the first three documents to its motion and supported its claim of an unlimited guaranty by an affidavit by an FDIC account officer. A copy of guaranty # 3 was not attached to the motion. FDIC argued no personal defenses could be asserted by Appellants because FDIC was a holder in due course and any affirmative defenses arising from alleged lack of funding of a line of credit were barred by the doctrine established in D'Oench, Duhme & Company v. Federal Deposit Insurance Corporation, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942), which has been codified as 12 U.S.C. § 1823(e).
Moss moved for summary judgment in his favor on February 11, 1991, arguing that the $299,000 note and a November 26, 1983 personal note for $211,000 had been altered after execution and that he had no knowledge of these alterations when he signed the $611,000 note. Moss claimed that the $611,000 note was a renewal of the $299,000 note plus a new credit line, but it had been altered after execution by adding the renewal of the November 26, 1983 note to its terms, thus converting Moss' personal debt into one owed by Exline. Moss admitted executing guaranty # 2 but denied executing guaranty # 3. Rather, Moss maintained that guaranty # 3 resulted from a material alteration of guaranty # 2 by the obliteration of the limitation of liability to $611,000. He argued the alteration rendered the instrument void under 15 O.S.1981 § 239.
On February 25, 1991, Appellants filed their response to FDIC's motion, arguing any liability on the $611,000 note was extinguished and deemed satisfied by FDIC's failure to secure a timely deficiency judgment, that FDIC could not be a holder in due course of a guaranty because a guaranty is not a negotiable instrument, and that guaranty # 1 was not the same document upon which FDIC based its original claim. Appellants note that guaranty # 1 contains different terms, has a different form date, and lacks witness signatures which appear on the one attached to the amended answer, cross-petition, and counterclaim filed on October 7, 1985 (guaranty # 4). According to Moss, he signed guaranty # 4 but guaranty # 1 was an alteration of guaranty # 4 and/or a forgery. Appellants argued that their defenses were real defenses, not personal defenses, and the guaranties were void before FDIC acquired them.
After initially denying FDIC's motion, on June 19, 1991, the trial court entered judgment for FDIC against both Appellants, holding that all of the defenses raised by Exline and Moss were either invalid as a matter of law or were barred because the FDIC was a holder in due course of the notes and guaranties under federal common law. After the trial court denied Appellants' new trial motion, they filed this appeal.
Moss argues that any suit based upon guaranty # 1, guaranty # 4, and guaranty # 3 should be time-barred because claims based on those documents were raised for the first time with the filing of FDIC's motion for summary judgment in 1991. We need not determine whether this argument has merit because its premise, i.e., FDIC did not reference these documents in its previously filed claims, is not supported by the record.
As noted above, the record shows that FDIC identified an October 11, 1983 guaranty, a June 12, 1984 guaranty and a June 12, 1984 unlimited guaranty as a basis for recovery in 1985 when it filed its amended answer, counterclaim, and cross-petition in the United Oklahoma Bank lawsuit. That pleading is a part of the consolidated record. The FDIC's motion for summary judgment based on these documents was filed after consolidation of the two lawsuits. Hence, a failure to earlier also raise those documents as a basis of recovery in the Haines lawsuit is irrelevant. As a matter of law, FDIC's claim on the guaranties is not barred by the statute of limitations.
Because FDIC did not timely request a deficiency judgment in the Haines lawsuit, Appellants argue that any debt owed FDIC was deemed satisfied under the provisions of 12 O.S.1991 § 686 which provides:
[N]o judgment shall be enforced or any residue of the debt remaining unsatisfied...
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