Steinbrugge v. Haddock, 6279.

• Decision Date: 26 July 1960
• Docket Number: No. 6279.,6279.
• Citation: 281 F.2d 871
• Parties: E. Donald STEINBRUGGE, Appellant, v. John S. HADDOCK and Alma J. Haddock, as Executrix of the Estate of Marshall Haddock, Jr., deceased, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

281 F.2d 871 (1960)

E. Donald STEINBRUGGE, Appellant, v. John S. HADDOCK and Alma J. Haddock, as Executrix of the Estate of Marshall Haddock, Jr., deceased, Appellees.

No. 6279.

United States Court of Appeals Tenth Circuit.

July 26, 1960.

Garrett Logan and Richard L. Hull, Tulsa, Okl. (Villard Martin and Jack H. Santee, Tulsa, Okl., on the brief), for appellant.

G. C. Spillers, Jr., Tulsa, Okl. (G. C. Spillers and Jack R. Givens, Tulsa, Okl., on the brief), for appellees.

Before MURRAH, Chief Judge, and PHILLIPS and BREITENSTEIN, Circuit Judges.

MURRAH, Circuit Judge.

Appellant Steinbrugge brought this diversity suit to rescind six purchases of Oklahoma oil and gas interests from appellees, the Haddocks, on the grounds that the Haddocks' agent in the transactions, Kunsman, had breached fiducial duties owed by him to Steinbrugge. More particularly, appellant contends that in each of the six transactions, Kunsman was acting as his agent or at least in some fiducial capacity, giving rise to strict duties to disclose to him all material facts, e. g., that Kunsman was also the Haddocks' agent, and the amount of Kunsman's commissions on the sales. The trial court found, upon a non-jury trial, that there was no fiducial relationship between Steinbrugge and Kunsman, and that even assuming there was, Kunsman had fully and properly discharged all duties thereunder. Appellant claims, as he must in order to prevail here, that the trial court erred in both respects.

We know that the existence of an agency or a fiducial relationship is a question of fact which must be proved by the one asserting it. See Appleman v. Kansas-Nebraska Natural Gas Co., 10 Cir., 217 F.2d 843, and cases cited therein; Appleby v. Kewanee Oil Co., 10 Cir., 1960, 279 F.2d 334; Mahan v. Dunkleman, 1951, 205 Okl. 54, 234 P.2d 366. And the ruling of the trial court thereon is of course conclusive unless upon a consideration of the whole record we must say it is clearly erroneous. Rule 52(a) F.R.Civ.P., 28 U.S.C.A.

The following facts found by the trial court are supported by record evidence. Steinbrugge is a New Jersey attorney heretofore unfamiliar with the oil and gas business. In the fall of 1957, he consulted Kunsman, a Tulsa petroleum geologist, concerning the wisdom of a prospective oil and gas investment. Kunsman advised him against it and he followed this advice. Steinbrugge had already made one investment, the "Dale Lease", and employed Kunsman to make a detailed investigation of that property, with compensation on a per diem basis. During their conversations that day, according to Kunsman's testimony (which the trial court believed), Steinbrugge asked him "* * * if something would come to my attention whether or not I would recommend it to him or call it to his attention, and I agreed to do so. And he said, certainly there are some deals here in Oklahoma that would be worthy of investment and I mentioned that I did know of one such place at that time and mentioned just one — the Carter-Knox field." A general discussion of the Carter-Knox field ensued, and Kunsman also told him about a friend, John Haddock, who had an interest in this field that he was willing to sell in order to raise expense money for a dry hole. That night, after returning from Oklahoma to New Jersey, Steinbrugge phoned Kunsman and made further inquires about Haddock's interest. Kunsman told him "* * * that the $2,000.00 per acre, which was the offering price, included a commission to me, and that the price therefore would be net to the buyer." Steinbrugge indicated he would buy the property, and stated that if anything else came to Kunsman's attention, he would like Kunsman to present it to him.

This was the first of the complained-of transactions. All the rest also took place in the fall of 1957, and followed a similar pattern. Kunsman brought each to Steinbrugge's attention by a long distance telephone conversation, describing the property geologically, stating the price at which it was offered and that the price was "net" to Steinbrugge, recommending it as a good buy, and saying "I am giving you the opportunity of either refusing this deal or buying." No specific mention was made in any of these five transactions of Kunsman's agency for the Haddocks or of any commission to be received from them. Steinbrugge closed each transaction by sending Kunsman a check payable to John Haddock.

All but the last transaction occurred during the time Kunsman was in Steinbrugge's employ in connection with the Dale lease. At no time was there any talk of Steinbrugge compensating Kunsman for his part in the purchase transactions, and Steinbrugge never made any specific payment therefor. Prior to the last transaction, Kunsman wrote a letter to Steinbrugge including general information concerning the purchases to date, and further stating: "From time to time, due to slowness of development, some of the larger royalty owners may get impatient to get their hands on substantial amounts of money for new homes and other reasons. * * * Since John Haddock has done considerable buying in the area, he will probably be one of the first to be contacted on such sales. If you would like to be included on such future purchases, either of us would be glad to call such purchases to your attention and, at least, give you the courtesy of a refusal." Claiming to have learned for the first time about a year later that Kunsman had been the Haddocks' agent in these transactions,...