Madrid v. Norton

• Decision Date: 25 June 1979
• Docket Number: Nos. 5041,5042,s. 5041
• Citation: 596 P.2d 1108
• Parties: Louis S. MADRID, Appellant (Plaintiff below), v. Edgar F. NORTON, Appellee (Defendant below). Edgar F. NORTON, Appellant (Defendant below), v. Louis S. MADRID, Appellee (Plaintiff below).
• Court: Wyoming Supreme Court

Page 1108

596 P.2d 1108

Louis S. MADRID, Appellant (Plaintiff below), v. Edgar F. NORTON, Appellee (Defendant below).

Edgar F. NORTON, Appellant (Defendant below), v. Louis S. MADRID, Appellee (Plaintiff below).

Nos. 5041, 5042.

Supreme Court of Wyoming.

June 25, 1979.

William H. Brown (argued), and Claude W. Martin, Casper, for appellant.

Houston G. Williams (argued), Casper, for appellee.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE and ROONEY, JJ.

RAPER, Chief Justice.

As the result of the dissolution of a joint venture or joint ventures, the district court awarded the appellant (cross-appellee) plaintiff Louis S. Madrid (hereinafter plaintiff) a judgment against appellee (cross-appellant) defendant Edgar F. Norton (hereinafter defendant) a judgment upon a claim for an accounting a total amount of $6,050.25. ¹ The plaintiff in this appeal claims that sum to be inadequate and asserts errors by the trial court in that it:

1. Failed to demand that Norton live up to the obligations of his fiduciary relationship.

2. Failed to recognize that the information assembled by Madrid and Norton had substantial value.

3. Held that confidential information is one of the elements of a fiduciary relation.

4. Held that the legal relationship between Madrid and Norton consisted of a series of joint ventures.

5. Held that the agreement between Madrid and Norton was so vague as to its terms as to be unenforceable.

6. Found that Madrid and Norton agreed to share only the Reeder, Boner, and Waring leases after they terminated their joint venture.

The defendant contends the true issues to be:

1. Was there sufficient evidence to support the trial court's finding of fact that Madrid and Norton terminated their relationship on or about January 15, 1975, agreeing that there were three specific leases in which they would share an equal interest, and agreeing further that each was to be free to obtain leases for his own account?

2. Was the trial court correct in its conclusion of law that once the relationship between Madrid and Norton had terminated, Norton was free to lease for his own account and was entitled to retain the leases he did obtain for his own account?

3. Is there sufficient evidence to support the trial court's finding of fact and attendant conclusion of law that the relationship between Madrid and Norton was a series of joint ventures which ended on or about January 15, 1975, by mutual agreement and that there was no agreement between Madrid and Norton to commence a fourth joint venture?

4. Was the trial court correct in concluding from the evidence that the alleged agreement to continue a joint venture between the parties was so vague as to be unenforceable in any event?

(i) Notwithstanding such conclusion on the part of the trial court, was the trial court nevertheless correct in its ultimate decision on other grounds?

5. Was there sufficient evidence to support the trial court's findings and conclusions that, upon termination of the relationship between Madrid and Norton on or about January 15, 1975, any previous fiduciary relationship between them did not continue beyond the termination date with respect to the leases involved in this case?

In his cross appeal the defendant admits that he owes plaintiff $2,016.75 on the "Fifield" bonus payment but claims the trial judge erroneously found $4,033.50 due plaintiff on the "Jenkins" bonus payment and, in addition, urges there should have been a credit of $721.20 owing out of the "Diamond Shamrock" lease, on any amounts found due by defendant to plaintiff.

We will affirm.

While in this particular case it adds to the length of the opinion, the findings of fact of the trial judge separately stated and numbered will be used as the factual narrative since parts of them are critical to a disposition of the case and because they accurately reflect the record of testimony and exhibits. We include them also because they serve as an illustration to the bench and bar of what we consider to be professionally and competently prepared findings of fact. In a complex case, such well-formulated findings aid this court in disposing of the appeal and in understanding the precise questions presented to the trial court and why they were decided as they were. While we must verify the findings against the 474 pages of transcript and 60 some exhibits, defendant's counsel eased that task by annotating in his brief each finding of fact to the record.

"1. Plaintiff, Madrid, and Defendant, Norton, are both experienced oil and gas landmen and lease brokers. Their association commenced in January 1974 when Madrid had a 'ticket' (authority to acquire oil and gas leases for the account, and at the expense, of another) from one Haynie, an independent oil and gas lease broker, in Sheridan County, Wyoming.

"2. Madrid used Norton and another landman to do the work of checking county records and obtaining of oil and gas leases from private mineral owners in Sheridan County. The job was completed within the boundaries established by Haynie. During his work in Sheridan County on this project, Norton obtained information that there were other lands near the project which were unleased for oil and gas, and he believed that leases could be acquired on such lands for reasonable prices (bonuses) and reasonable delay rentals.

"3. Madrid and Norton discussed the matter and agreed that they would, for their joint account, attempt to obtain oil and gas leases on approximately 15,000 acres. Madrid agreed to obtain approximately $75,000 to pay for the leases; and at the price per acre they believed they would have to pay, the acreage acquisition was necessarily limited to about 15,000 acres. They agreed that Norton would check the records and negotiate the leases and send drafts on Madrid's bank to pay the bonuses; Madrid would arrange the approximate $75,000 to do this, and Madrid would engage in trying to sell the block to someone. They agreed to divide whatever profits were realized equally, both as to money and reserved overriding royalties. This was the extent of their agreement at that time.

"4. Norton obtained the block of acreage as agreed, and sent drafts to Madrid for payment. The drafts were thirty-day drafts and, prior to the due dates, Madrid made an agreement with one Marty Friedman to pay the drafts when due. The agreement was that Friedman, upon a sale of the block, would be repaid moneys he advanced, and the three parties would then share equally in any profits made on the sale. The first block of leases was sold to Diamond Shamrock, and the agreement performed. Madrid and Norton had no more leases, having sold the entire first block to Diamond Shamrock. After the first block, Friedman no longer participated with Madrid and Norton in subsequent activities.

"5. While negotiating for a sale of the first block, an offer was made to sell to Michigan-Wisconsin Pipeline Company. However, that company would not agree to the amount of overriding royalty Madrid and Norton proposed to reserve, to-wit, 61/4 percent. Madrid and Norton believed, from Michigan-Wisconsin's expressed interest in the area, that if they could put together a second block of Sheridan County acreage, they might well sell it to said company and make a profit. They discussed the matter and agreed to embark upon a second venture. They agreed to limit the amount of acreage to be obtained, as previously, and upon the area in which the leasing was to be attempted.

"6. Norton, doing the field work, again obtained a second block of Sheridan County acreage. Madrid again had agreed to arrange for the money and to negotiate the sale. The money from the sale of the first block was put in Madrid's own bank account and disbursements were later made from it by Madrid.

"7. The second block of Sheridan County acreage was sold to Michigan-Wisconsin Pipeline Company almost immediately. Again, the money was placed in Madrid's account.

"8. Having successfully obtained two blocks of acreage, and again having sold the entire inventory of leases, Madrid and Norton decided to attempt to put together a third block of Sheridan County acreage again limited in acreage and again in an agreed area of the county. Norton obtained leases constituting a third block, as agreed. However, this time Madrid was not successful in making a fast sale of the third block, although many companies were solicited by him.

"9. Madrid and Norton now had a third inventory of acreage and a substantial investment in acquisition costs, which acreage was not readily saleable. They discussed steps to be taken to make their third package more attractive to prospective buyers. They agreed that they should attempt to go into Converse County, pay more for some better leases, and put the Converse County leases into the third block with the Sheridan County leases and offer such block for sale. They examined the Converse County public records and used RIMCO and POMCO maps to determine which leases were expiring. These maps may be purchased by anyone for a price, and they show mineral ownership and lease information on them.

"10. In selecting the area in Converse County within which to attempt leasing Madrid and Norton tried to select lands in the vicinity of an 'axis' which was well known to oil people and was delineated by public geological records, particularly the United States Geological Survey records. In none of their dealing did either Madrid or Norton ever have access to or knowledge of technical, geological or engineering data, and no particular suspected pool of oil or gas was known to them except as may have been of general knowledge in the oil business. Also, Madrid and Norton never drew up any map, nor made any agreement upon, nor delineated a specific area in which to concentrate their efforts. They simply tried, in Converse County at least, to secure acreage near known areas of production or interest.

"11. Madrid and Norton did acquire leases in ...