May v. First Nat. Pawn Brokers, Ltd., 94-346
| Decision Date | 23 February 1995 |
| Docket Number | No. 94-346,94-346 |
| Citation | 890 P.2d 386,270 Mont. 132 |
| Parties | Phil MAY and Betty May, Plaintiffs and Respondents, v. FIRST NATIONAL PAWN BROKERS, LTD., Defendant and Appellant. |
| Court | Montana Supreme Court |
Jack L. Lewis and Patrick R. Watt, Jardine, Stephenson, Blewett & Weaver, Great Falls, for appellant.
Howard F. Strause, Great Falls, for respondents.
Defendant First National Pawn Brokers, Ltd., appeals the order of the Eighth Judicial District Court, Cascade County, appointing a receiver in this matter. We affirm.
The appellant raises the following issues on appeal:
1. Did the District Court abuse its discretion by issuing an ex parte order appointing a receiver without notice to First National Pawn Brokers?
2. Did the District Court abuse its discretion by ordering the receiver to apply the assets of First National Pawn Brokers to the satisfaction of the judgment?
3. Did the District Court abuse its discretion by appointing a receiver without requiring an undertaking?
Because our holding in Issue 1 is dispositive of this appeal, we do not discuss Issue 2 or Issue 3.
On March 3, 1994, the District Court entered judgment in favor of Phil and Betty May and against First National Pawn Brokers, Ltd. P, confirming the memorandum and award of the arbitrator who heard the case pursuant to the parties' agreement. The Mays were awarded $264,864, plus their costs of $754.72. FNP appealed that judgment, and this Court's decision in that matter was handed down on December 15, 1994. May v. First National Pawnbrokers (Mont.1994), 51 St.Rep. 1367.
On March 8, 1994, the District Court issued a writ of execution, ordering the Cascade County Sheriff to satisfy the March 3 judgment "out of the personal property" of FNP within 60 days. On March 15, Sergeant Duncan and Reserve Deputy Butler of the Sheriff's Department attempted to execute the writ at the Great Falls FNP shop. Both an employee and a manager at the shop refused to hand over any funds, stating that they had been advised not to do so. On March 22, the Mays moved the court to hold the employee, the manager, and two of FNP's attorneys in contempt.
On April 8, 1994, the Mays moved for a supplemental hearing, pursuant to §§ 25-14-101 and -105, MCA, to allow them to call witnesses to testify regarding the assets of FNP. The Mays also moved for the appointment of a referee to preside over the proceeding. The Mays' attorney filed an affidavit in support of the motion. The District Court granted the motion.
The supplemental hearing was held on May 4, 1994. Paul Brown, President of FNP, testified as to the activity of the corporation. James Ritter, Vice President of First Interstate Bank of Commerce, Billings, testified regarding FNP's financial situation. Attempts to serve subpoenas on Benjamin and Barbara Brown, Paul Brown's brother and sister-in-law, failed because neither of them could be located.
At the hearing, Paul Brown testified that FNP was an ongoing business that currently ran at least four pawn shops, and that Barbara Brown, secretary/treasurer of FNP, was paid an annual salary of between $30,000 and $40,000. He testified that she had his permission to write checks at any time, but was unable to explain why she had written three corporate checks to herself for a total amount of $48,000 since January 1994.
Paul Brown further testified that FNP regularly transferred or loaned assets to corporations which owned pawn shops in South Dakota and Florida. He did not know the names of those corporations or the names of their officers or shareholders, but he stated that Benjamin and Barbara Brown were in some way associated with them. He testified that the transfers occurred without any set terms, interest, monthly repayment, or time limit.
Evidence introduced by the Mays showed that on March 14, 1994, Barbara incorporated a business under the name First Montana Pawn, Inc., and designated herself as the president and registered agent of the new business. The registered address for the new business was the same as FNP's address.
On May 5, 1994, the Mays prepared an ex parte motion requesting the appointment of a receiver. The motion was filed with the court on May 9. The motion set forth some of the testimony given by Paul at the May 4 hearing and alleged that "[u]nless a receiver is appointed immediately, the assets of the Corporation may be transferred and start disappearing, thereby, becoming unavailable to the Judgment Creditor." The District Court granted the...
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