Robbins Inv. Co. v. Green Rose Associates, Inc.

• Decision Date: 06 December 1968
• Docket Number: CA-CIV,No. 2,2
• Citation: 8 Ariz.App. 596,448 P.2d 440
• Parties: ROBBINS INVESTMENT CO., Inc., an Arizona Corporation, Appellant, v. GREEN ROSE ASSOCIATES, INC., a New York corporation, and Ballmary Realties, Inc., a New York corporation, Lionel R. Bauman, Allen D. Emil and Eugene M. Grant, Appellees. 491.
• Court: Arizona Court of Appeals

Page 440

448 P.2d 440

8 Ariz.App. 596

ROBBINS INVESTMENT CO., Inc., an Arizona Corporation, Appellant, v. GREEN ROSE ASSOCIATES, INC., a New York corporation, and Ballmary Realties, Inc., a New York corporation, Lionel R. Bauman, Allen D. Emil and Eugene M. Grant, Appellees.

No. 2 CA-CIV 491.

Court of Appeals of Arizona.

Dec. 6, 1968.

Rehearing Denied Jan. 14, 1969.

Review Denied March 4, 1969.

Schorr & Karp, by Marvin D. Karp, Tucson, or appellant.

Chandler, Tullar, Udall & Richmond, by James L. Richmond, Tucson, for appellees.

KRUCKER, Judge.

This is an appeal from a summary judgment granted in favor of the defendants in an action brought by the plaintiff to set aside a conveyance of certain real property as fraudulent.

The facts, as they appear from the record, are as follows. Green Rose Associates, Inc., hereinafter referred to as Green Rose took title to a 23-acre parcel of land in Pima County, Arizona, on May 8, 1959. The purchase price for this 23-acre parcel was paid by the individual defendants, Bauman, Grant and Emil, each of the aforesaid defendants paying one third of this purchase price, and at their instruction the deed was made naming Green Rose as the grantee. Prior to the transfer of this property to Green Rose, specifically on March 6, 1959, Green Rose and the individual defendants entered into a written agreement which provided that Green Rose was to act as the nominee or agent for the individual defendants. After Green Rose took title to this land and prior to February 1, 1960, the premises were divided into two separate parcels, one consisting of approximately nine acres, and the second consisting of approximately fourteen acres. The nine-acre parcel, which we shall refer to as parcel A, was leased, in July of 1959, to a tenant who was to operate a motor hotel which was to be built on that parcel. Green Rose was to have the responsibility for the construction of the motor hotel, and it thereafter entered into a construction contract to that end. Initial construction financing was obtained from the Valley National Bank, and in conjunction with its loan application, Green Rose submitted to that lender a financial statement which listed neither parcel A nor the remaining fourteen-acre parcel, which we shall hereinafter refer to as parcel B, as an asset of Green Rose, nor does the statement list as an asset of Green Rose any other real property as of June 30, 1959. Negotiations for permanent financing were made with the Sixty Trust, the amount of the loan to be $1,400,000. This loan was to be made to Green Rose, and to secure the loan Green Rose was to execute in favor of the Sixty Trust a mortgage on parcel A, an assignment of the hotel lease, and an assignment of a chattel mortgage which Green Rose held on the furniture and equipment in the hote. In neither the loan agreement nor the mortgage between Green Rose and the Sixty Trust was there any express reference to the nominee status of Green Rose, but the loan agreement did contain a clause which provided that only Green Rose should be liable on the obligation and the no principal, disclosed or otherwise, of Green Rose should be liable on this obligation.

The mortgage given by Green Rose to the Sixty Trust has a similar provision. This mortgage was recorded on February 1, 1960, and on the same date, Green Rose transferred title in parcel A to the individual defendants, retaining in itself title to parcel B. This situation existed until August 24, 1962, when the individual defendants, observing that the operator of the hotel was having financial difficulties, and fearing a foreclosure, executed in favor of Green Rose a deed to parcel A. The Sixty Trust foreclosed its mortgage on parcel A, and on October 9, 1963, a deficiency judgment in the amount of approximately $79,000 was entered against Green Rose.

On January 27, 1964, the deficiency judgment, which had been reduced to approximately $56,000, was assigned by the Sixty Trust to the plaintiff, Robbins Investment Company, Inc. On January 7, 1963, and prior to the entry of the deficiency judgment, Green Rose executed a deed to parcel B naming therein Ballmary Realties, Inc., as grantee, and transfer is admitted to be without consideration.

Defendants Bauman and Grant are the sole shareholders in both Green Rose and Ballmary; each is also a director and officer in Green Rose and Ballmary. Defendant Emil, on the other hand, is neither an owner nor a manager of any interest in either Green Rose or Ballmary.

Defendants' motion under Rule 56, Arizona Rules of Civil Procedure, 16 A.R.S., asserting the absence of any genuine issue as to any material fact, was granted by the trial court, and plaintiff claims error in two respects. First, that a genuine factual issue existed on the question of beneficial ownership of parcel B by Green Rose. The second genuine factual issue asserted by plaintiff to exist deals with the question of whether or not the individual defendants were estopped to deny that Green Rose was the beneficial owner of parcel B.

It is a most familiar rule of law that motion for summary judgment should not be granted when there is a genuine issue as to any material fact. Springer v. Bank of Douglas, 82 Ariz. 329, 313 P.2d 399 (1957).

'* * * In resolving the question as to whether summary judgment should be granted, the trial court does not weigh the evidence, nor do we; but the pleadings, affidavits, depositions and admissions, if any, must be viewed in the most favorable aspect they will bear in support of the right of the party opposing the motion to a trial of the issues.' Peterson v. Valley National Bank of Phoenix, 90 Ariz. 361, 363, 368 P.2d 317, 318 (1962).

When a party moves for summary judgment, it is incumbent upon him to make a Prima facie showing that there exists no genuine issue as to any material fact, and this be true regardless of which party would have the burden of proof on these issues at trial. Elerick v. Rocklin, 102 Ariz. 78, 425 P.2d 103 (1967). However where the moving party has made such a Prima facie showing, then the party opposing the motion has the burden to produce sufficient evidence to show that there is an issue, and he must shouw that evidence is available which would justify a trial of the issue. Dobson v. Grand International Brotherhood of Locomotive Engineers, 101 Ariz. 501, 421 P.2d 520 (1966).

Turning first to the matter of the beneficial ownership by Green Rose of parcel B, the record indicates without substantial or genuine dispute that, at all times while Green Rose was titleholder to parcel B, it held bare legal title and nothing more, and that during these same periods the individual defendants were in fact the equitable and beneficial owners of parcel B. The record shows an agreement between the individual defendants and Green Rose that Green Rose would take the title to real property in its own name, but as the nominee or agent of the individual defendants, and that it would deal with this property according to the instructions of the individual defendants. Furthermore, the record shows without contradiction that the individual defendants supplied the purchase price for parcel B and that Green Rose was made the grantee at their direction. With all possible doubts...