Jordan v. Jordan

• Decision Date: 12 December 2006
• Docket Number: No. 101,544.,101,544.
• Citation: 151 P.3d 117,2006 OK 88
• Parties: Lisa Ann JORDAN, Plaintiff/Appellee/Respondent, v. Daniel White JORDAN, Defendant/Third-Party Plaintiff/Appellant/Petitioner, v. John W. Jordan III, Third-Party Defendant/Appellee/Respondent.
• Court: Oklahoma Supreme Court

151 P.3d 117

2006 OK 88

Lisa Ann JORDAN, Plaintiff/Appellee/Respondent, v. Daniel White JORDAN, Defendant/Third-Party Plaintiff/Appellant/Petitioner, v. John W. Jordan III, Third-Party Defendant/Appellee/Respondent.

No. 101,544.

Supreme Court of Oklahoma.

December 12, 2006.

Certiorari to the Court of Civil Appeals, Division IV.

¶ 0 Certiorari previously was granted to review the Court of Civil Appeals' decision affirming a trial court's award of summary judgment in favor of the third-party defendant and against the third-party plaintiff in an action in which the plaintiff sought recovery from the defendant for the unpaid balance on a promissory note and the defendant/third-party plaintiff brought in the third-party defendant under a theory of resulting trust in the District Court of Oklahoma County, Hon. Carolyn R. Ricks, trial judge. We hold summary judgment was improperly granted to the third-party defendant as the defendant/third-party plaintiff presented sufficient evidence to show genuine issues of material fact were in dispute.

THE COURT OF CIVIL APPEALS' OPINION IS VACATED IN PART; THE JUDGMENT OF THE TRIAL COURT IS AFFIRMED IN PART AND REVERSED IN PART; THE CASE IS REMANDED FOR FURTHER PROCEEDINGS WITH INSTRUCTIONS.

Joel L. Wohlgemuth, Thomas M. Ladner, David R. Ross, Norman, Wohlgemuth, Chandler & Dowdell, Tulsa, OK, Attorneys for Appellant, Daniel White Jordan, III.

John A. MacKechnie, Gum, Puckett & Mackechnie, Oklahoma City, OK, Attorneys for Plaintiff/Appellee, Lisa Ann Jordan and Third-Party Defendant/Appellee, John W. "Jack" Jordan III.

EDMONDSON, J.

¶ 1 Dan Jordan, defendant/third-party plaintiff/appellant, brought a petition for certiorari from the Court of Civil Appeals' decision upholding summary judgment against him and in favor of John (Jack) Jordan, third-party defendant/appellee/respondent, who was brought into the original action on Dan's claim of resulting trust for the cash value of a life insurance policy in the amount of unpaid balance due on a promissory note sought from Dan by Lisa Jordan, plaintiff/appellee/respondent. The issue before us is whether the Court of Civil Appeals was correct in holding that the trial court did not err in its determination that there were no issues of material fact between Dan and Jack in controversy. The trial court also granted summary judgment in favor of Lisa against Dan, but Dan does not challenge the correctness of the Court of Civil Appeals' decision affirming that award. We have previously granted certiorari. We find there were material facts in issue regarding the ownership of the cash value of the policy and we reverse the decision of the Court of Civil Appeals rendered in favor of Jack. We remand the matter to the trial court with instructions to try those issues.

¶ 2 The record shows the following relevant facts led up to this lawsuit which was brought by Lisa against Dan to recover the remaining balance on a promissory note. Dan and Jack were officers and directors of Jordan Drilling Fluids, Inc. (JDF), and both were insured under "key man" life insurance policies. Although Jack was listed as the owner on his policy, JDF paid the premiums and was named as the beneficiary. In 2000, Jack resigned from JDF and agreed he would sell his stock to Dan. Before closing that sale, Jack transferred his interest to his wife Lisa, who then sold the stock to Dan, for which Dan gave Lisa a promissory note for $360,000.00. At the time of Jack's resignation, the cash surrender value of the insurance policy was $14,130.89. After his resignation, JDF requested Jack return the cash value to the company but he refused. Dan later purchased the cash value from JDF.

¶ 3 Dan had regularly paid Lisa the monthly payments in full on the promissory note, but he refused to pay the total of the last two payments. Instead he paid her only a partial amount, leaving an unpaid balance of $14,130.89. His refusal to pay the total was based on his claim that he (Dan) owned the cash value policy and Jack was holding it in trust for him (Dan) and that Jack should remit the sum to Lisa to satisfy the remainder of the balance owing in equal amount. Lisa filed this action against Dan to enforce payment of the $14,130.89 balance.

¶ 4 In Dan's answer to her petition he admitted his execution of the note and denied any allegations contrary to its express terms. He stated that plaintiff's husband, Jack, held the cash value of the policy in trust for him and he had instructed Jack to remit that sum which represents the balance due on the note to Lisa, but Jack had refused to do so ¶ 5 Dan brought Jack into the action on a third-party petition asserting that although Jack purported to exert ownership interest over the policy and its cash value, as a matter of law Jack held the cash value in trust for the benefit of JDF and its successors and assigns, namely Dan. To enforce his claim of ownership of the cash value of the policy, Dan asked the trial court to exercise its equitable power and impose a resulting trust on the cash value of the policy. Dan prayed that in the event Lisa was awarded judgment against him, he should be awarded judgment against Jack in the amount of plaintiff's judgment.

¶ 6 Jack's answer to the third-party petition denied that he held any sum in trust for Dan. He asserted that he alone had always held ownership of the policy and that neither JDF nor Dan nor any other person had ever had ownership status of the policy or its cash value. Neither Jack nor Lisa made any other challenge to the third-party petition or the cause of action set forth therein.

¶ 7 The trial court sustained motions for summary judgment filed by Lisa and Jack based on its finding that there was no substantial controversy as to the material facts and they were both entitled to judgment against Dan as a matter of law. Judgment was therefore awarded to Lisa against Dan for the amount of the balance of the note and judgment was rendered in favor of Jack against Dan on the third-party claim seeking to recover the cash value of the policy based on Dan's claim of ownership.

¶ 8 On certiorari, Dan argues that the Court of Civil Appeals' decision affirming the trial court's judgment for Jack is erroneous and that it is not in accord with applicable decisions of this Court, as well as being internally inconsistent.

¶ 9 The issue of ownership was framed by the parties before the trial court. Dan directly and repeatedly challenged the third-party defendant's ownership of the cash value of the policy in pleadings and arguments before the trial court and he sought the trial court's assistance in equity in recovering the sum of the cash value from the third-party defendant. Jack responded and denied Dan's claim and asserted his own ownership.

¶ 10 The Court of Civil Appeals, however, then determined sua sponte that Dan's third-party claim was not really a claim against Jack but was instead raised only as a set-off to Lisa's claim, which was impermissible because Dan's ownership claim against Jack was not germane to plaintiff's action on the note. In its decision the Court expressly found that:

There are genuine issues of material fact regarding the ownership of the policy. Moreover, Dan has cited compelling authority to support his claim that JDF held equitable title to the life insurance policy. (Citations omitted). Based on that authority, a grant of summary judgment on the validity of JDF's (and Dan's) claim to the equitable title of the life insurance policy would have been in error.

¶ 11 Notwithstanding this clear finding, the Court of Civil Appeals concluded summary judgment in favor of Jack and against Dan on the third-party petition should be affirmed and found Dan should bring a separate action to enforce his ownership claim. The Court stated that this judgment "does not operate as an adjudication of the rights and liabilities between Jack and Dan, but merely operates as an adjudication of Dan's right to treat his claim against Jack as a set-off to Lisa's claim against [Jack]."

¶ 12 Dan argues that the trial court's summary judgment for Jack was erroneous and the Court of Civil Appeals finding that genuine factual issues relating to ownership of the policy were in controversy was correct. Dan argues that by affirming the trial court's summary judgment against him on the third-party petition, based on its mistaken finding of the nature of the third-party claim, the Court of Civil Appeals,...