Schoen v. Gulledge
| Decision Date | 08 November 1985 |
| Citation | 481 So.2d 1094 |
| Parties | Otto SCHOEN and Clara Schoen v. Robert I. GULLEDGE, et al. 84-249. |
| Court | Alabama Supreme Court |
Davidson L. Laning and Elizabeth R. Jones, Emond & Vines, Birmingham, for appellants.
J. Don Foster and Thack H. Dyson, of Foster, Brackin & Bolton, Foley, for appellees Robert and Linda Gulledge.
Wesley Pipes and Victor H. Lott, Jr., of Lyons, Pipes & Cook, Mobile, for appellee Federal Land Bank of Jackson, formerly known as The Federal Land Bank of New Orleans.
John Earle Chason, of Chason & Chason, Bay Minette, for appellee Federal Land Bank Ass'n of Robertsdale.
C. Robert Gottlieb, Jr., of Reams, Vollmer, Philips, Killion, Brooks & Schell, Mobile, for appellee Weldon R. Payne.
The trial court granted summary judgment in favor of all defendants on all counts stated in the complaint. The plaintiffs appeal. We reverse and remand.
Viewing the evidence most favorably to the non-moving party, which we must do in reviewing the trial court's order granting summary judgment, we find that the plaintiffs have established jury issues which compel a reversal.
Otto Schoen and his wife Clara purchased 320 acres of land in 1979. Otto Schoen approached Robert Gulledge, the record title holder, with regard to the land sometime in 1978. Gulledge quoted Schoen a price of $1,500 per acre and advised Schoen to allow him a few days to let Gulledge talk to Weldon Payne, president of the Federal Land Bank Association of Robertsdale (FLBA), about lending Schoen the purchase money. Thereafter, Schoen contacted Payne, who, according to Schoen, miscalculated, allegedly deliberately, the cash flow needed by Schoen to sustain a loan of $650,000. (Schoen had a prior loan which was consolidated, making a total of $650,000.)
Schoen produced a witness, Payne's successor as president of FLBA, who testified as an expert that the loan to Schoen should not have been made, that the amount of interest, which was critical in determining whether there was sufficient cash flow to sustain the loan, was an objective figure available to Payne, who approved the loan. This witness also testified that the Federal Land Bank of New Orleans (now of Jackson) could have determined that Schoen's cash flow was insufficient based upon the figures submitted to it by Payne.
Lloyd Taylor acted as the attorney for FLBA and was the loan closing attorney on the loan. The loan was closed on January 3, 1979. The terms of the loan called for annual payments of $57,448.40 over a period of forty years. Schoen was unable to pay the first installment, which came due in January 1980. He subsequently sold half of the acreage and reduced the principal by $180,000. He could not pay the annual payment due in January 1981, and the FLBA foreclosed on the loan.
In September 1982, Gulledge, Payne, and Taylor were indicted by a federal grand jury in the United States District Court for the Southern District of Alabama. They were charged with, among other things, conspiracy and obtaining unlawfully money from the Federal Land Bank Association of Robertsdale and the Federal Land Bank of New Orleans. Gulledge and Taylor were charged with aiding and abetting Payne to obtain unlawfully monies from FLBA and the Federal Land Bank of New Orleans. Gulledge was charged with making false statements in a loan application submitted to FLBA. The indictment referring to unlawfully obtaining monies involved the proceeds derived from the sale of the 320 acres to Schoen.
It was established during the federal prosecution that Payne, at the time he handled the loan application with Schoen, owned a one-half interest in the land and, unknown to Schoen, split the purchase price with Gulledge. Payne's interest in the property was in violation of the conflict of interest rules of the FLBA. He was ultimately convicted, as was Taylor. The federal judge granted Gulledge's motion for acquittal as to one count; and the jury was unable to reach a verdict on two others, and a mistrial was ordered.
The Schoens' complaint was filed in August 1983. They allege that they were the victims of a fraud scheme perpetrated by the defendants, who conspired to induce them to incur a loan beyond their means to service and did so by fraudulently calculating their cash flow in order to insure that the loan would be approved. They also alleged claims for breach of contract, bad faith, outrage, etc.
The record in this case runs to over 5,000 pages, consisting of affidavits, depositions of various parties and witnesses, and the record in the criminal case in the federal court. Yet the trial court granted summary judgment in favor of all defendants as to all claims. The trial court cannot shift to this Court its responsibility to determine the triable issues in a complex case by granting pre-trial motions for summary judgment. Because we hold that genuine issues of fact exist as to the fraud and conspiracy claims, we reverse the judgment appealed from and express no opinion with regard to other claims.
The burden is on one moving for summary judgment to demonstrate that no genuine issue of material fact is left for consideration by the jury. The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact. Woodham v. Nationwide Life Ins. Co., 349 So.2d 1110 (Ala.1977); Shades Ridge Holding Co. v. Cobbs, Allen & Hall Mortg. Co., 390 So.2d 601 (Ala.1980); Fulton v. Advertiser Co., 388 So.2d 533 (Ala.1980). The movants here have not met that burden as to the conspiracy and fraud claims, and it was reversible error to grant their motions.
Each argues on appeal that summary judgment was appropriate because the complaint shows on its face that the fraud claims are barred by the statute of limitations. This argument is without merit. It is true that, at the time of the events pertinent to this case, fraud actions were governed by a one-year statute of limitations, § 6-2-39(a)(5), Code of Ala.1975. 1 However, at the time this suit arose, § 6-2-3 provided:
"In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have one year within which to prosecute his action." 2
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