Mildfelt v. Lair

• Decision Date: 05 March 1977
• Docket Number: No. 48115,48115
• Parties: , 21 UCC Rep.Serv. 1162 Gerald MILDFELT, Appellant, v. Virgil LAIR, Appellee.
• Court: Kansas Supreme Court

Page 805

561 P.2d 805

221 Kan. 557, 21 UCC Rep.Serv. 1162

Gerald MILDFELT, Appellant, v. Virgil LAIR, Appellee.

No. 48115.

Supreme Court of Kansas.

March 5, 1977.

Syllabus by the Court

1. A motion for summary judgment should be sustained only where there is no genuine issue of material fact, and a party is entitled to judgment as a matter of law.

2. Where the sole question presented is one of law, a final determination may be had on a motion for summary judgment.

3. In considering a motion for summary judgment, pleadings and documentary evidence must be given a liberal construction in favor of the party against whom the motion is directed.

4. Upon motion for summary judgment, factual inferences tending to show triable issues must be considered in the light most favorable to the existence of those issues. If there is a reasonable doubt as to the existence of issues of fact, a motion for summary judgment will not lie.

5. An appellate court should read the record in the light most favorable to the party who defended against the motion for summary judgment. It should take such party's allegations as true, and it should give him the benefit of the doubt when his assertions conflict with those of the movant.

6. An employment which can be performed within one year does not fall within the ambit of K.S.A. 33-106.

7. In the absence of a contract, either express or implied, between an employee and his employer covering the duration of employment, the employment is terminable at the will of either party.

8. Under such a contract, the employee states no cause of action for breach of contract by alleging that he has been discharged.

9. The act of a partner in dissolving a partnership at will, being one of the rights of all partners, creates no cause of action.

10. An employment contract involving a transfer of title to shares of stock for a price is a sale of securities within the purview of K.S.A. 84-8-319.

11. Absent unusual circumstances or enforceable contract provisions to the contrary, an option to purchase stock granted by an employer to an employee terminates upon the cessation of the employer-employee relationship.

12. One seeking to exercise an option must do so within the term; failure to exercise an option results in a waiver thereof.

13. An attempt to exercise, either by payment or tender, is ordinarily a condition precedent to the bringing of an action on a stock option.

14. An oral contract, within the statute of frauds, cannot be made the basis of an action for damages for its breach; nor, ordinarily, can any other action be maintained which requires proof of such contract to sustain the cause of action.

15. Absent unusual circumstances, the statute of frauds may not be avoided by a suit for fraud and deceit, based on a claim that the defendant did not intend to perform when he entered into an oral contract, unenforceable under the statute.

16. It is not the function of appellate courts to make an independent accounting of formidable accounts in order to determine the precise correctness of particular findings. This court will disturb the trial court's findings of fact on such an account only where manifest or demonstrable error appears.

Monte K. Heasty, of Quinlan, Scovel, Emert & Heasty, Independence, argued the cause and was on the brief for appellant.

Charles F. Forsyth, of Fleming & Forsyth, Erie, argued the cause and was on the brief for appellee.

MILLER, Justice.

Plaintiff, Gerald Mildfelt, commenced this action against Virgil Lair for damages for breach of contract, and later added an alternative claim based upon fraud and deceit. The trial court sustained defendant's motions for summary judgment against all of plaintiff's claims. The defendant's counterclaim for an accounting was tried to the court and judgment was entered against the plaintiff for $2,425.55, plus interest and costs. The plaintiff appeals from all adverse rulings.

The issues before us are whether the trial court erred (1) in granting summary judgment on plaintiff's claims of breach of contract and tort, (2) in its ruling upon the partnership accounting, and (3) in allowing defendant's counsel to participate in the case.

As we turn to the factual background of this dispute, we should be mindful of the rules relating to the granting and appellate review of summary judgments. K.S.A. 60-256(c) provides for the entry of summary judgment '. . . if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. . . .'

Summary judgment should not be entered where there are disputed issues of material fact. Motors Insurance Corporation v. Richardson, 220 Kan. 288, 552 P.2d 894; First Land Brokerage Corporation v. Northern, 220 Kan. 48, 551 P.2d 866.

Where the sole question presented is one of law, a final determination may be had on a motion for summary judgment. Wagner v. Mahaffey, 195 Kan. 586, 408 P.2d 602. A motion for summary judgment should be sustained only where there is no genuine issue of material fact, and a party is entitled to judgment as a matter of law. Harold v. Harold, 218 Kan. 284, 543 P.2d 1019.

In considering a motion for summary judgment, pleadings and documentary evidence must be given a liberal construction in favor of the party against whom the motion is directed. Voth v. Chrysler Motor Corporation,218 Kan. 644, 545 P.2d 371; Lorson v. Falcon Coach, Inc., 214 Kan. 670, 679, 522 P.2d 449. Factual inferences tending to show triable issues must be considered in the light most favorable to the existence of those issues. If there is a reasonable doubt as to the existence of issues of fact, a motion for summary judgment will not lie. Mechtley v. Price, 217 Kan. 344, 347, 536 P.2d 1385; Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 516 F.2d 33 (10th Cir. 1975); and Stevens v. Barnard, 512 F.2d 876 (10th Cir. 1975).

An appellate court should read the reocrd in the light most favorable to the party who defendant against the motion for summary judgment. In should take such party's allegations as true, and it should give him the benefit of the doubt when his assertions conflict with those of the movant. Woods v. Cessna Aircraft Co., 220 Kan. 479, 553 P.2d 900; and see 10 Wright & Miller, Federal Practice and Rpocedure: Civil, § 2716.

Gerald Mildfelt was employed by the Security National Bank in Kansas City, Kansas, at the time that Virgil Lair, of Piqua, Kansas, bought the bank at Stark, Kansas, in 1970. The Stark bank was a customer and correspondent of Security National, and through this contract the parties became acquainted. They learned that the Home State Bank at Erie, Kansas, might be for sale. Lair negotiated with the Millers, who owned the controlling interest in the Home State Bank, around May 1, 1972. He then contacted Mildfelt and asked if he would come down and serve as president and chief executive officer of the Home State. The parties entered into an oral agreement that if Lair would go ahead and purchase the Home State, Mildfelt would resign his position with Security National, move to Erie, and run the bank. Mildfelt was to be president of the bank at a salary of $14,000 per year. The parties agreed that the bank would furnish Mildfelt with a new car and pay all car expenses. Mildfelt and Lair were to form an equal partnership to sell credit life insurance in connection with loans made by the bank. And in addition, Mildfelt was to have an option to purchase, at a fixed price, up to fifty per cent of the stock in the Home State Bank held by Lair. Thereafter, on May 11, 1972, Lair purchased controlling interest in the Home State from the Millers. Mildfelt resigned his position with Security National, moved his family from Kansas City to Erie, and assumed the management of the Home State Bank on July 1, 1972.

Some months thereafter Mildfelt suggested to Lair that their agreement should be in writing. Mildfelt drew up a proposed agreement and showed it to Lair, who suggested that it should be prepared by an attorney. In about December, 1972, Mildfelt handed the draft he had prepared to Clark Fleming, the bank's attorney, and asked him to formalize it. Mr. Fleming asked Mildfelt a few questions as to provisions which were not clear to him, and made some notes on the original draft. Fleming then took these to his office, redrafted the agreement in formal terms, and returned the documents to Mildfelt. Lair refused to sign the written agreement, and thereafter relations between the parties deteriorated. Lair took over the hiring and firing and discipline of bank employees. Toward the end of March, 1973, Mildfelt told Lair that he was dissatisfied with their agreement and Mildfelt offered to purchase all of Lair's interest in the bank. The parties, however, failed to agree upon terms and no agreement was reached. On May 19, at a special meeting of the board of directors of the Home State Bank called by Lair, Mildfelt was relieved of his duties as president of the bank as of Monday morning May 21, 1973. Mildfelt was instructed to turn over the keys to the bank, return the bank's car, and remove his personal belongings from the president's office.

During the time that he served as president of the Home State Bank, Mildfelt was paid a salary of $14,000 per year, plus a bonus of one-month's salary at the end of 1972 and an additional month's salary as severance pay at the time of his dismissal. He was furnished with a new car during his tenure, and the bank paid the car expense. Mildfelt and Lair were equal partners in an insurance agency which operated from the bank during the same period of time. In 1972, Mildfelt's profit from this venture was about $4900. By May 21, 1973, Mildfelt had withdrawn $2900 more than Lair from the insurance partnership. Lair settled up the partnership insurance...