Heck & Paetow Claim Service, Inc. v. Heck

• Decision Date: 08 January 1980
• Docket Number: No. 77-317,77-317
• Citation: 93 Wis.2d 349,286 N.W.2d 831
• Parties: HECK & PAETOW CLAIM SERVICE, INC., Plaintiff-Respondent and Cross-Appellant, v. Caryl J. HECK, Personal Representative of the Estate of John P. Heck, Deceased, Defendant-Appellant and Cross-Respondent.
• Court: Wisconsin Supreme Court

Page 831

286 N.W.2d 831

93 Wis.2d 349

HECK & PAETOW CLAIM SERVICE, INC., Plaintiff-Respondent and Cross-Appellant, v. Caryl J. HECK, Personal Representative of the Estate of John

P. Heck, Deceased, Defendant-Appellant and Cross-Respondent.

No. 77-317.

Supreme Court of Wisconsin.

Submitted on Briefs Dec. 5, 1979.

Decided Jan. 8, 1980.

L. E. Vaudreuil and Vaudreuil & Vaudreuil, Kenosha, on brief, for defendant-appellant and cross-respondent.

Wesley R. Mueckler and Brown, Black, Riegelman & Kreul, Racine, on brief, for plaintiff-respondent and cross-appellant.

COFFEY, Justice.

This is an appeal from a judgment of the Circuit Court for Kenosha County. Caryl J. Heck (hereinafter the appellant), the personal representative of the estate of John P. Heck, appeals from that portion of the judgment dismissing her second counterclaim for the net proceeds of the claims adjusting service. Heck & Paetow Claim Service, Inc., (hereinafter the plaintiff-respondent), cross-appeals from another portion of the same judgment granting the appellant's first counterclaim for all the accrued interest from the moneys or securities on deposit.

The trial court record establishes that in 1956 Ralph N. Anderson (hereinafter Anderson), not a party to this action, and John P. Heck (hereinafter Heck), incorporated a business as equal shareholders to adjust insurance companies' casualty claims and fire losses under the name of Anderson-Heck, Inc.

In 1958 Anderson left the corporation and Melvin Paetow (hereinafter Paetow), purchased Anderson's stock, thus becoming an equal shareholder with Heck in the corporation. Following the purchase and stock transfer, the articles of incorporation were amended to change the name of the corporation to Heck & Paetow Claim Service, Inc. Messers. Heck and Paetow's only income was derived from their annual salary of $15,000 for adjusting claims and other casualty losses as employees of the corporation.

On March 10, 1961 Heck and Paetow entered into a stock repurchase agreement with the corporation to assure ". . . to the surviving stockholder a succession to the ownership and control of the corporation through its acquisition of the shares of a stockholder at the time of his death or upon a prior sale. . . ." The agreement required the corporation to purchase, and the personal representative of a deceased shareholder to sell to the corporation, all the stock of the corporation owned by the deceased shareholder, at the time of his death, at a stipulated price. At the time of the original stock agreement in 1961 Heck and Paetow each owned 200 shares of stock valued at $50 each, later increased to $100 per share. The stock repurchase agreement also provided that the corporation purchase life insurance policies on the lives of the shareholders in the amount of $20,000, and naming the corporation as beneficiary. Upon the death of a shareholder, the agreement directed that the corporation tender the insurance policy on the shareholder's life to the insurer and that the proceeds be used to repurchase the decedent's stock in the corporation. Any remaining balance of the proceeds after repurchase of the stock was to be retained by the corporation as general corporate funds.

Heck died of a heart attack on October 26, 1974 and the corporation, pursuant to the repurchase agreement, obtained the life insurance proceeds in the amount of $20,000 from the policies on Heck's life. On December 13, 1974 the corporation tendered the $20,000 payment to the appellant, Mrs. Heck, the agreed value of the decedent's stock in the corporation. Caryl Heck, as personal representative of Heck's estate, refused to accept the $20,000 agreed tender and refused to convey the decedent's stock to the corporation. Following her refusal, the respondent, Heck & Paetow Claim Service, Inc., deposited the $20,000 in an interest bearing savings account and commenced an action in the circuit court for Kenosha County for specific performance of the stock repurchase agreement. The appellant answered by admitting that the estate was bound by the terms of the stock repurchase agreement, and affirmatively alleged that she was ". . . ready and willing to tender said stock certificate, properly endorsed," to the court to be held until such time as the respondent tendered to the appellant the $20,000 life insurance payment pursuant to the stock repurchase agreement and all the interest accrued while held in the savings account.

The appellant also filed two counterclaims, one repeating the allegation set forth in her answer stating that Heck's estate was entitled to all the interest which had accrued on the $20,000, payable under the terms of the stock repurchase agreement, from the time the corporation had placed the money in an interest-bearing savings account until the time the appellant actually receives payment of the proceeds.

As a second counterclaim she alleged that ". . . by agreement between the said John P. Heck, owner of one-half of the stock of said corporation, and Melvin H. Paetow, owner of the remaining one-half of the stock of said corporation . . . each was to receive one half of the net proceeds of said corporation as compensation for their services as employees of said corporation." Thus, the appellant claims that Heck's estate is entitled to receive one half of the remaining net proceeds held by the corporation at the time of his death.

The respondent-corporation filed a motion for summary judgment requesting the court to:

1. grant the relief demanded in its complaint; and 2. deny the relief demanded by the appellant in the two counterclaims.

The trial court entered a judgment on July 20, 1977 and ordered specific performance of the stock repurchase agreement, and further directed the appellant to transfer the decedent's stock to the corporation. The court ruled in favor of the appellant on the first counterclaim and stated that Heck's estate was entitled to the interest accrued on the $20,000 from the time it was placed in the savings account until the time it was paid to the appellant. On the other hand, the court denied the appellant's second counterclaim for one-half of the net proceeds of the corporation finding no evidence to sustain the appellant's contention that a partnership agreement in fact existed between Heck and Paetow for an equal division of the net proceeds. The court ruled that the stock repurchase agreement was intended to be the only method available for the corporation to compensate the decedent's estate upon his death.

Following the court's decision, the appellant tendered Heck's stock to the corporation in exchange for the proceeds of the insurance policies pursuant to the terms of the repurchase agreement and thus is not an issue on appeal.

Issues

1. Did the trial court err in granting the appellant's first counterclaim for accrued interest on the purchase price of the stock?

2. Did the trial court err in denying the appellant's second counterclaim for one-half of the net proceeds of the respondent-corporation, in addition to the agreed value of the stock pursuant to the stock repurchase agreement, as compensation for Heck's services to the corporation?

On appeal both parties seek review of a part of the summary judgment entered by the trial court granting the appellant's first counterclaim and denying the second counterclaim.

The purpose of summary judgment is to obviate the need for a trial where there is no genuine issue as to any material facts. It is a judgment rendered on the merits without a trial. Truesdill v. Roach, 11 Wis.2d 492, 499, 105 N.W.2d 871 (1960); Town of Blooming Grove v. City of Madison, 275 Wis. 328, 333, 81 N.W.2d 713 (1957). The summary judgment procedure does not function as a substitute for a trial of any genuine issue of material fact, but permits a decision based on affidavits, records and for depositions. Alonge v. Rodriquez, 89 Wis.2d 544, 553, 279 N.W.2d 207 (1979); Lecus v. American Mutual Ins. Co. of Boston, 81 Wis.2d 183, 190, 260 N.W.2d 241 (1977). The party moving for summary judgment must demonstrate that a trial is not necessary and establish a record sufficient to demonstrate to the satisfaction of the court that there is no triable issue of material fact on any issue presented. Hilkert v. Zimmer, 90 Wis.2d 340, 342, 280 N.W.2d 116 (1979); Kraemer Bros., Inc. v. United States Fire Ins. Co., 89 Wis.2d 555, 565-66, 278 N.W.2d 857 (1979); Wright v. Hasley, 86 Wis.2d 572, 577, 273 N.W.2d 319 (1979). Any reasonable doubt as to the existence of a genuine issue of material fact must be resolved against the moving party. Kraemer Bros., Inc. v. United States Fire Ins. Co., supra, 89 Wis.2d at 566, 278 N.W.2d 857. If the trial court has determined the movant has proved to the court's satisfaction that there is no genuine issue of material fact as a matter of law, then the trial court should enter judgment. Wright v. Hasley, supra, 86 Wis.2d 578-79, 273 N.W.2d 319. See : sec. 802.08(3), Stats. When called upon to review the granting or denial of a summary judgment motion, this court must apply the standards set forth in sec. 802.08, Stats., in the same manner as trial courts. Wright v. Hasley, supra at 579, 273 N.W.2d 319.

In this case, the respondent contends that the trial court erred in granting the appellant's counterclaim for accrued interest on the purchase price of stock. There is no dispute that the $20,000 purchase price was deposited in an interest bearing account only after the appellant refused to accept tender of the money for Heck's stock as required in the repurchase agreement....