Super Valu Stores v. FIRST NAT. BANK, ETC.

Decision Date17 January 1979
Docket NumberCiv. A. No. 76-38-Col.
Citation463 F. Supp. 1183
PartiesSUPER VALU STORES, INC. v. FIRST NATIONAL BANK OF COLUMBUS, GEORGIA, as Executor and Trustee under the Will of Owen G. Roberts, Jr., Deceased, Defendant and Third-Party Plaintiff, v. Robert G. MUNCY, Third-Party Defendant.
CourtU.S. District Court — Middle District of Georgia

COPYRIGHT MATERIAL OMITTED

Joseph L. Waldrep, Waldrep & Williams, P. C., Columbus, Ga., Charles S. Doster, Merrill, Porch, Doster & Dillon, Anniston, Ala., for plaintiff.

Gary L. Coulter, Albert W. Stubbs, Hatcher, Stubbs, Land, Hollis & Rothschild, Columbus, Ga., for defendant and third-party plaintiff.

Robert G. Muncy, pro se.

OWENS, District Judge:

Plaintiff Super Valu Stores, Inc., a Delaware corporation with its principal place of business in Minnesota, filed its complaint on April 6, 1976, against the First National Bank of Columbus, Georgia, as Executor of the Last Will and Testament of Owen G. Roberts, Jr. who died June 23, 1974, alleging that plaintiff's predecessor Chastain-Roberts Company, Inc., a Minnesota wholesale grocery corporation with its principal place of business in Anniston, Alabama, sold groceries to a Georgia convenience store, supermarket operator corporation, Consolidated Customer Services, Inc., of which the deceased Mr. Roberts was a 50 percent stockholder, director, officer and general counsel; and as a result of Mr. Roberts' conduct for which his estate is monetarily liable, has still not been paid some $449,000.00, plus interest and expenses. More specifically the plaintiff's complaint alleges in Count I that the deceased orally agreed to pay $50,000.00 for 1,000 shares of Consolidated's common stock, that the stock was issued on January 11, 1971, and that the $50,000.00 is still owed; in Count II that a $100,000.00 life insurance policy on the deceased was purchased, paid for by and intended to be payable to Consolidated but was wrongfully paid to the estate; in Count III that a series of checks given plaintiff's predecessor Chastain-Roberts, which checks the deceased knew or should have known were drawn on insufficient funds, were returned by Consolidated's bank on account of stop payment instructions or being drawn on insufficient funds and thus constituted fraudulent misrepresentations damaging plaintiff's predecessor at least $300,000.00; and in Count IV that the deceased neglected and failed to perform his duties as a director, the treasurer of and attorney for Consolidated thereby breaching his fiduciary duties to plaintiff's predecessor as a creditor of Consolidated and causing damages of at least $449,000 plus interest and expenses to plaintiff's predecessor.

Defendant executor filed responsive pleadings asserting many defenses which will be considered and discussed and denying any and all liability. Discovery has been completed, a motion for summary judgment has been filed by the defendant and this constitutes the court's decision as to defendant's motion. In considering defendant's motion and plaintiff's responses thereto the court has evaluated plaintiff's responses in accordance with Lovable Company v. Honeywell, Inc., 431 F.2d 668 at 670 (5th Cir. 1970):

1 By the very nature of the motion, the granting of a motion for summary judgment is the exception rather than the rule. However, it is a tool made available to the courts for their proper use when nothing is to be gained by a full trial.
2 As stated by this court in Liberty Leasing Co. v. Hillsum Sales Corp., 5 Cir., 1967, 380 F.2d 1013, "The burden is upon the moving party . . . to establish that there is no genuine issue of fact, Kilfoyle v. Wright, 5 Cir., 1962, 300 F.2d 626, 629; Bragen v. Hudson County News Co., 3 Cir., 1960, 278 F.2d 615, 617, and the party opposing the motion should be given the benefit of every reasonable doubt, Heyward v. Public Housing Administration, 5 Cir., 1956, 238 F.2d 689, 696. However, rule 56 requires that the opposing party be diligent in countering a motion for summary judgment, Southern Rambler Sales, Inc. v. American Motors Corp., 5 Cir., 1967, 375 F.2d 932, and mere general allegations which do not reveal detailed and precise facts will not prevent the award of summary judgment, Federal R. of Civ. P. 56(e), Robin Construction v. United States, 3 Cir., 1965, 345 F.2d 610, 613-614." 380 F.2d 1013, 1014-1015.

(emphasis added).

Viewed in this light it is this court's considered judgment that the pleadings, depositions, answers to interrogatories, admissions on file, affidavits and exhibits show that there is no genuine issue as to any material fact and that the defendant executor is entitled to a judgment as a matter of law. The undisputed facts as thus shown and the reasons for the court's opinion that the defendant executor is entitled to a judgment as a matter of law, are hereinafter stated.

The plaintiff having conceded at pretrial on November 1, 1977, that contrary to its belief when its complaint was filed, defendant executor was the lawfully designated beneficiary of a group life insurance policy on the deceased the terms of which permitted the insured individual and not Consolidated to make such a designation, it is unnecessary to discuss either the facts or the law as to that claim. Plaintiff's concession entitles defendant to a judgment on that claim.

Robert G. Muncy came to Columbus, Georgia, for Officers Candidate School at Fort Benning. While there he retired from the Army because of medical disability and went to work for Southland Corporation, a Columbus corporation operating 7-11-type stores. In January 1970 Mr. Muncy left Southland and went into business for himself operating two 7-11-type stores—one located at Fortson that he had purchased in 1967 and another that he bought around the time he left Southland's employment. In June or July, Mr. Muncy sold his most recently acquired store to Gold Platter Services, Inc. of Macon, Georgia, and became employed as a Vice-President of Gold Platter.

Penny Wise, Incorporated, a Columbus, Georgia, corporation operating 7-11-type stores filed a bankruptcy reorganization proceeding in the Columbus Division of this court1 on September 25, 1970. Owen Roberts, Jr., the deceased, practiced law in Columbus and was a partner of the law firm that represented Penny Wise. Robert G. Muncy first met Owen Roberts when he negotiated in behalf of Gold Platter with Mr. Roberts as Penny Wise's attorney as to the possibility of taking over Penny Wise's stores. Following many discussions Muncy and Roberts agreed to bid in Muncy's name on all the Penny Wise stores at an auction to be held by the Phenix Girard Bank as Trustee. The successful bid was made by them in the amount of $49,909.66 in the name of Robert G. Muncy and Associates, and the operation of the stores was taken over as of December 17, 1970. Muncy and Roberts paid a cash binder to the trustee with funds borrowed from the First National Bank of Columbus; Muncy thinks it was five or ten thousand dollars but is not sure.

Muncy resigned from Gold Platter Services, Inc. around the time the operation of the Penny Wise stores began and received from Gold Platter some $15,000 for Gold Platter stock he owned.

Owen Roberts as an attorney petitioned the Superior Court of Muscogee County for a corporate charter in the name of Consolidated Customer Services, Inc., and the charter was granted on January 11, 1971. The articles of incorporation provide for the issuance of up to 25,000 shares of common stock at a par value of $1.00 per share and further provide that the corporation shall not commence business prior to having received at least $10,000 capital. On January 20, 1971, stock certificate number 1 for 1,000 shares was issued to Roberts and number 2 for 1,000 shares was issued to Muncy; both were signed by Muncy as President and Roberts as Secretary-Treasurer. Georgia law requires at least three directors of the corporation; they were Roberts, Muncy and Jean B. Killingsworth, Roberts' secretary. Ms. Killingsworth was also Assistant-Secretary of the corporation.

There was no written agreement as to the consideration that was paid by Roberts and Muncy for their respective 1,000 shares. The corporate minutes and records which are almost non-existent do not indicate what was paid upon issuance and do not indicate that any consideration was to be paid at a later date. The only writings are various un-audited, unsigned financial statements of the corporation showing the 2,000 shares to have been issued for $10,000; those financial statements do not show unpaid stock subscriptions or any other amounts owed by either Muncy or Roberts to the corporation.

Muncy testified that he and Roberts had discussions around the time of buying the Penny Wise stores and getting started as to the monetary amount they would each contribute to the corporation. (Muncy deposition, p. 23). Muncy, asked how much he paid the corporation for his 1,000 shares, stated "I put into the corporation a business in Fortson, Georgia, and a laundromat on Forrest Road and right at $15,000." (emphasis added). (Muncy deposition, p. 20). Mr. Muncy further testified:

Q And what was your business in Fortson, Georgia and your laundromat worth?
A Some $50,000.
Q And did you talk to Mr. Roberts about putting that business in?
A Yes, we did.
Q And did you all agree that it was worth $50,000?
A Well, the value was $50,000 and we discussed it. I mean it wasn't where he said, "I don't think it is worth that," or that it was worth more. It was a figure we just put on it.
Q And he didn't object to the fact that you said it was worth $50,000?
A No.
Q Was any paperwork done on that transfer to your knowledge?
A There may have been some done at a later time, but I don't remember. There may have even been some done near the time of the transaction. I just don't remember.
Q What was the name of that store?
A The name of that store was Speedy Shop; Speedy Shop Number 1.
Q And where was
...

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