Intercontinental Leasing, Inc. v. Lehr, 46307

• Citation: 495 P.2d 900,209 Kan. 132
• Decision Date: 08 April 1972
• Docket Number: No. 46307,46307
• Parties: INTERCONTINENTAL LEASING, INC., Appellee, v. Gary L. LEHR et al., Appellants.
• Court: Kansas Supreme Court

Page 900

495 P.2d 900

209 Kan. 132

INTERCONTINENTAL LEASING, INC., Appellee, v. Gary L. LEHR et al., Appellants.

No. 46307.

Supreme Court of Kansas.

April 8, 1972.

Syllabus by the Court

In an action brought against the guarantors of a five year leasing agreement to recover the difference between the gross unpaid rentals reserved in the agreement and the net proceeds of a sale of the leased equipment after repossession, the record on appeal is examined and it is held: (1) Points neither briefed nor argued are deemed abandoned; (2) The construction of the terms and the effect of the written instruments can be determined as a matter of law on motion for summary judgment; (3) The issues referred to in appellants' brief are questions of law, and (4) The summary judgment in favor of plaintiff is affirmed.

John F. Hayes, of Gilliland, Hayes & Goering, Hutchinson, argued the cause, and Arthur H. Snyder, of Snyder & Orcutt, Hutchinson, was with him on the brief, for appellants.

Richard W. Stavely, Wichita, argued the Cause, and William B. Swearer, of Martindell, Carey, Hunter & Dunn, Hutchinson, was with him on the brief, for appellee.

FROMME, Justice:

The defendants appeal from a summary judgment entered against them in the sum of $16,773.48.

The background facts were stipulated by the parties in a pre-trial order. The defendants organized a retail meat corporation, Colonial Meats, Inc. (Colonial). The corporation was short lived. It acquired its business tools and equipment by executing a written leasing agreement with Intercontinental Leasing, Inc. (Intercontinental). The leasing agreement was dated January 21, 1966. Contemporaneously the defendants, being the incorporators, stockholders, directors or officers of Colonial, entered into a written guaranty agreement as an inducement to Intercontinental to purchase and deliver the tools and equipment to Colonial. The leasing agreement covered a term of five years and required monthly payments totaling $23,808.60. Colonial paid eight monthly installments and then defaulted. Five months later, no further payments having been made, Intercontinental repossessed the tools and equipment pursuant to default provisions in the leasing agreement. Repossession occurred on March 11, 1967, without objection from either Colonial or the defendants. Colonial became insolvent and no steps have been taken to wind up its business or pay its creditors. The tools and equipment were sold on April 25, 1967, at public auction. Expenses of repossession and sale were incurred and paid by Intercontinental. These included storage rentals, a sale commission and a delinquent personal property tax warrant. Intercontinental filed this action against the defendants as guarantors to recover the difference between the gross unpaid rentals reserved in the five year leasing agreement and the net proceeds of the sale.

The issues as defined in the pre-trial order were:

'4. The remaining issues to be determined are:

'(a) Whether expenses of repossession and sale are properly allowable as a deduction from the proceeds of sale of the leased equipment; and

'(b) If expenses of repossession and sale are properly allowable as a deduction from the proceeds of sale of the leased equipment: (i) whether Plaintiff had a duty to make a reasonable effort to sell the leased equipment for the best price obtainable and, if so, whether it exercised such duty; (ii) whether such expenses were reasonable; and (iii) in what amount are expenses of sale allowable as a deduction?

'(c) Whether the Defendants are entitled to credit for the leased equipment shown on page A-1 of Lease No. 707 attached hereto which was not sold be Plaintiff at the public auction held April 25, 1967, and, if so, in what amount?

'(d) Whether the proceeds from the sale of the leased equipment were properly applied by Plaintiff?

'(e) Whether Defendants are entitled to credit for that portion of the difference between Plaintiff's cost of the leased equipment and the rental charge therefor?

'(f) Whether Plaintiff is entitled to interest from April 25, 1967, and if so, whether the rate of interest if (sic) 10% per annum?

'(g) Whether Plaintiff is entitled to recover the lessor's reversion in the leased equipment shown in Lease No. 707 in the amount of $1,725.27 from the Defendants?

'(h) Was the transaction between the parties actually a conditional sale of equipment or a lease of equipment?

'(i) Is the action brought by the Plaintiff, (i) for recovery of rent or (ii) for damages for breach of contract?

'(j) If the action is on a lease contract, did the Plaintiff effectively cancel the lease contract by seizing the personal property covered thereby and subsequently selling the same?

'(k) By reason of the Guaranty referred to in 3. (d), did the Defendants agree to pay any taxes?

'(l) By reason of said Guaranty did the Defendants agree to pay any rent to the landlord or any commission on the sale of the property by Plaintiff?

'(m) Do the Defendants owe Plaintiff for loss of rent for the period to April 25, 1967, less amount paid, or what loss of rent would there be if Plaintiff had rerented the property to another, or do they owe damages for breach of contract by Colonial Meats, Inc.?

'(n) In the event that Defendants are liable for rentals over the five-year term of the lease, then, in such event, are the Defendants entitled to the possession and use of the personal property covered by the lease?

'5. The documentary evidence is Lease No. 707 and the Guaranty.

'6. Each party shall advise the other party as to the names of all witnesses to be called by such party at least ten (10) days prior to trial; and no other witnesses will be permitted to testify except for rebuttal and impeachment purposes, or, by order of the Court.

'7. Plaintiff contends that all issues set forth in Paragraph 4 of this pre-trial order (except those issues set forth in sub-paragraph (b) of paragraph 4 and the amount of any credit for leased equipment set forth in sub-paragraph (c) of paragraph 4, which issues plaintiff concedes to be of a factual nature) are issues of law and not properly triable to a jury. Defendants contend that all issues set forth in paragraph 4 of this pre-trial order are issues of fact and properly triable to jury; and Defendants demand a jury trial on all issues.

'The Court should determine: (1) whether Defendants are entitled to a jury trial on any issue or issues in view of defendants' failure to demand a jury trial pursuant to K.S.A. 60-238; (2) if the Court determines that Defendants are entitled to a jury trial on any issue or issues, then the Court should determine which issue of issues are properly triable to a jury; and (3) any issue or issues which are not properly triable to a jury should be determined by the Court prior to the submission of any issue to a jury.'

After abortive attempts at an intermediate appeal and a direct appeal a further stipulation of the parties was made in the trial court. The parties stipulated the expenses of repossession and sale previously claimed by Intercontinental were incurred, were reasonable in amount and were necessary in order to conduct the sale.

With the lawsuit in this posture the plaintiff filed a motion for summary judgment. The trial court in response to the motion construed the terms of the two contemporaneous written instruments, found there was no genuine issue of material fact remaining and entered judgment for plaintiff.

Before discussing the merits of this appeal pertinent parts of the agreements should be mentioned or quoted. The leasing agreement required monthly payments of $396.81 over a term of five years. The agreement contained no option to purchase. Title to the property remained in Intercontinental. At the end of the initial five year term the agreement was renewable by payment of an annual renewal rental of $517.58. Other pertinent parts of the leasing agreement provide:

'17. INSURANCE; LIENS; TAXES. Lessee shall provide and maintain insurance against loss, theft, damage or destruction of the equipment in an amount not less than the total rent payable hereunder, with loss...