Hayes v. American Nat. Bank of Powell

• Decision Date: 21 December 1989
• Docket Number: No. 89-3,89-3
• Citation: 784 P.2d 599
• Parties: Rodney J. HAYES, Appellant (Plaintiff), v. AMERICAN NATIONAL BANK OF POWELL, a National Banking Corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 599

784 P.2d 599

Rodney J. HAYES, Appellant (Plaintiff), v. AMERICAN NATIONAL BANK OF POWELL, a National Banking Corporation, Appellee (Defendant).

No. 89-3.

Supreme Court of Wyoming.

Dec. 21, 1989.

Randy L. Royal, Greybull, for appellant.

Ross D. Copenhaver and R. Scott Kath, Copenhaver, Kath & Kitchen, Powell, for appellee.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.

THOMAS, Justice.

The asserted questions in this case relate to claims of genuine issues of material fact concerning the satisfaction of a guarantor's responsibility for the debt of another. Those asserted genuine issues of material fact encompass the effect of a stipulation entered into between the debtors and the guaranteed creditor in a Chapter 11 Bankruptcy proceeding; an alleged mutual mistake by the guarantor and the creditor with respect to the extent and amount of the guarantee; and the effect of a satisfaction arising out of the acceptance by the creditor of personal property of the debtor in the absence of an appropriate valuation of that property. The questions are academically interesting, but we agree with the determination by the district court that the money in issue was used, in fact, to satisfy a promissory note secured by a mortgage made independently by the guarantor to the appellee, the American National Bank (Bank). Consequently, the asserted genuine issues do not involve a material fact in this instance. There is no genuine issue as to the material facts relating to the independent debt of the guarantor to the bank. We affirm the summary judgment entered by the district court.

The appellant, Rodney Hayes (R. Hayes), asserts these issues in his brief:

"1. Were there genuine issues of material fact concerning the extent of release of liability intended by Appellee and Chapter 11 debtors concerning the terms of a two-year, post-confirmation written Stipulation entered into between the Chapter 11 debtors and Appellee, and the effect of that written Stipulation on the liability of a guarantor of a promissory note of the Chapter 11 debtors which was to be paid through the Chapter 11 Reorganization Plan such that it was error for the District Court to have ordered Summary Judgment?

"2. Was there sufficient evidence offered by the parties to support a showing that there was mutual mistake by the parties regarding the extent and amount of a guarantor's guarantee of promissory note due Appellee from non-party Chapter 11 debtors such that it was error for the District Court to grant Summary Judgment against Plaintiff and in so doing refuse to admit evidence of the parties' intent?

"3. When Appellee accepted delivery of certain items of personal property 'in full satisfaction of the creditor's claims against the debtors,' and where Appellee failed to provide promissory note guarantor, Appellant, with accounting of application of property value and failed to liquidate said personal property and apply the proceeds thereof to indebtedness allegedly due by guarantor, Appellant, were there genuine issues of material fact regarding reduction of indebtedness due from guarantor, Appellant, to Appellee by virtue of Appellee's acceptance of said personal property without sale or application of value to the debt, such that it was error for the District Court to grant Summary Judgment?"

The Bank articulates the issues differently, in this way:

"1. Whether the District Court properly granted Summary Judgment in favor of Appellee and against the Appellant and whether the District Court correctly determined that there were no genuine issues as to any material fact?

"2. Whether the Appellant should be estopped from asserting his claims against Appellee due to Appellant having received any and all benefits resulting from the Hayes/Kuzara Contract as a direct result of Appellee consenting to the terms and conditions outlined in said CONTRACT?"

The circumstances as to which genuine issues of material fact are claimed involve at least three promissory notes; a mortgage by R. Hayes to the Bank; an offer to give a mortgage on the same land; a contract for the sale of the land that had been mortgaged; a Chapter 11 Bankruptcy by the father of R. Hayes, Norman Hayes (N. Hayes), whose debt R. Hayes had guaranteed; and negotiations and compromises that occurred within the bankruptcy proceeding. As a more detailed recitation of these events will demonstrate, all of these complex and somewhat convoluted facts had no effect upon the original mortgage by R. Hayes to the bank. That mortgage was still outstanding, and the Bank was entitled to apply the proceeds of the fund in issue to the satisfaction of the note secured by that mortgage. This was the premise upon which the District Court granted summary judgment.

We set the stage for the detailed recitation of facts by recalling that a summary judgment is affirmed on appeal only if this court is persuaded that there are no genuine issues relating to any material fact and that the prevailing party is entitled to judgment as a matter of law. Fiscus v. Atlantic Richfield, 773 P.2d 158 (Wyo.1989); Matter of Larsen, 770 P.2d 1089 (Wyo.1989); Farr v. Link, 746 P.2d 431 (Wyo.1987). Furthermore, we consider only admissible evidence, in exactly the same light as that in which it was presented to the district court, in assessing the existence of any genuine issue of material fact that might foreclose summary judgment. Connaghan v. Eighty-Eight Oil Company, 750 P.2d 1321 (Wyo.1988); England v. Simmons, 728 P.2d 1137 (Wyo.1986). In this instance, this latter rule is significant because the record fails to substantiate some of the assertions presented in the appeal. We cannot consider factual recitations in briefs unless they are supported by the record. Contentions by the parties of what they believe occurred have no materiality unless they are demonstrated in the record considered by the district court in entering its summary judgment.

Therefore, our assessment of this case is premised only upon the facts disclosed by the record. The relationship between the parties was initiated on May 19, 1980 when R. Hayes executed a promissory note for $35,000.00, in favor of the Bank, and secured that note by giving a mortgage on real property. The promissory note was extended twice by promissory notes dated June 26, 1981 and January 11, 1982. The record is silent with respect to any separate treatment of the mortgage and, consequently, the record fact is that the mortgage remained intact and without modification by these extensions.

In September of 1983, R. Hayes entered into a contract to sell the mortgaged land. Conforming with the mortgage executed on May 19, 1980, R. Hayes sought the Bank's written approval of the conveyance by providing it with a copy of the agreement between himself and the prospective buyer. This compliance with the terms of the mortgage constituted an acknowledgment by R. Hayes that it then was a current encumbrance. The contract for the sale of land provided that all monthly payments by the purchaser, up to the amount of $30,000.00, should be made to an escrow agent and held for the purpose of creating a special fund with which to guarantee the satisfaction of the mortgage held by the bank at the time that the payment required by the contract for the sale of land was made in full. The contract for the sale of land also provided that R. Hayes was to deposit $5,000.00, from the down payment by the purchaser, into this same escrow fund to compensate for a differential in interest rates between those on R. Hayes' promissory note to the bank and those on the contract for the sale of land. The land sale contract went on to specify that, if any amount less than $35,000.00 was required to satisfy the note and mortgage held by the bank at the time final payment was made on the land contract, the lesser amount would be paid to the Bank and the balance in the escrow fund would be paid to R. Hayes. Finally, R. Hayes agreed to pay $12,042.77, representing the difference between the unpaid balance of the agreement and the total obligation under his mortgage, to the American National Bank. According to the agreement, if the mortgage were released in any way prior to payment in full by the purchaser under the contract for the sale of land, the total amount of $35,000.00 in the escrow fund was to be delivered to R. Hayes. That sum was the object of this action in the district court.

The Bank consented to the contract for the sale of land by an acceptance signed by Harold Hand, then the president of the Bank. The transaction was accomplished between R. Hayes and his purchaser. Revised escrow instructions were agreed to by R. Hayes and his buyer pursuant to which all payments, including the $5,000.00 down payment, were forwarded directly to the Bank instead of being maintained in a separate escrow account until the final payment was made. Consequently, the Bank, instead of the first-named escrow agent, was holding all monies accruing under the land contract other than the down payment that was retained by R. Hayes. The land sale contract and correspondence relating to it, including the revised escrow instructions, did not allude to, make any provision for, or recognize in any way any other mortgage relating to R. Hayes' guarantee of a promissory note by his father, N. Hayes.

The purchaser in the land sale contract made all payments as he had agreed, and the mortgage by R. Hayes subsequently was released by the Bank. This was in accordance with an acknowledgment by the Bank that it would issue a "complete, full and unconditional release" of the mortgage on R. Hayes' property upon full compliance with the terms of the contract between R. Hayes and the purchaser. The record does not indicate that this release, which the Bank had agreed to, should be affected at all by guarantees made by R. Hayes upon his father's promissory note.

The promissory note by the father, N. Hayes, was executed...