Ulan v. Richtars

• Decision Date: 15 October 1968
• Docket Number: No. 2,CA-CIV,2
• Citation: 8 Ariz.App. 351,446 P.2d 255
• Parties: Leon ULAN and Sylvia Ulan, husband and wife, Appellants, v. Dorothy E. RICHTARS, a widow, and John B. Richtars, a single man, Daniel C. Maloney and Ellene Maloney, husband and wife, Butera Trust, Inc., an Arizona corporation, and Western Surety Company, a corporation, Appellees. 556.
• Court: Arizona Court of Appeals

Page 255

446 P.2d 255

8 Ariz.App. 351

Leon ULAN and Sylvia Ulan, husband and wife, Appellants, v. Dorothy E. RICHTARS, a widow, and John B. Richtars, a single man, Daniel C. Maloney and Ellene Maloney, husband and wife, Butera Trust, Inc., an Arizona corporation, and Western Surety Company, a corporation, Appellees.

No. 2 CA-CIV 556.

Court of Appeals of Arizona.

Oct. 15, 1968.

Review Denied Dec. 10, 1968.

William Messing, Tucson, for appellants.

Lesher, Scruggs, Rucker, Kimble & Lindamood, by D. Thompson Slutes, Tucson, for appellees.

MOLLOY, Judge.

The appellees, Dorothy E. Richtars and her son, John B. Richtars, brought suit against the appellants, Leon Ulan and his wife, Sylvia Ulan, and others, seeking damages for fraud in a land transaction. The specific charge of fraud is that the appellant Ulan induced plaintiffs to accept, as partial payment for conveyance of a residence to the Ulans, a seller's equity in a contract for the sale of New Mexico land by fraudulently representing to plaintiffs that a $2,000 initial payment had been made on the $8,000 contract by the vendee when, in fact, no such payment had been made. A jury trial resulted in a judgment in favor of the Richtars and the Ulans appeal, asserting seven grounds for reversal.

We state the facts, as we must, in the light favorable to the Richtars, who prevailed below. In July of 1963, the Richtars owned a residence in Tucson which they wished to sell. John Richtars was in California, and Mrs. Richtars, a widow, was attending to selling the property. One Maloney, a real estate salesman, asked if he might represent the sellers and was granted that privilege. Maloney brought the house to the attention of Leon Ulan, a real estate investor in Tucson. Ulan made an offer to purchase it in exchange for assumption by the Ulans of the existing mortgage on the property, which was something in excess of $13,600, plus $2,300 in cash, and a vendor's interest in a land contract relating to a tract of land in Luna County, New Mexico.

This contract for sale of the New Mexico land was dated September 12, 1962. It was in the original amount of $8,000 and contained a recital, under the 'payable as follows' clause, stating '(t)he sum of $2,000.00 payable concurrently herewith.' The first annual installment of $600 on the face value balance of $6,000 was due on October 1, 1963. The contract also contained a statement that the liability of the purchaser (one Dabrow) '* * * is limited to the within described real property.' At the trial, the original vendor, Kay, testified that the contract purchaser, Dabrow, had given him a note for $2,000 on execution of the contract instead of making a cash payment. Katz, the real estate salesman who handled the transaction in which Ulan acquired this contract testified that he told Ulan of the lack of a cash down payment when that deal was consummated. Maloney testified, and Ulan's testimony is substantially the same, that Ulan told Maloney that $2,000 had been paid down on the contract and that it was a 'good' contract.

When Maloney submitted Ulan's offer to Mrs. Richtars, he conveyed to her the gist of Ulan's representations concerning the contract. Mrs. Richtars consulted her nephew, Louis Richtars, who was an employee at a bank and was involved to some extent in bank mortgage and real estate matters. He advised that he knew of Mr. Kay, and that if Mr. Kay's name was on the contract, he would consider it a good contract. Predisposed at that point to accept the contract, Mrs. Richtars called her son in California to discuss the matter. He indicated his willingness to accept the Ulan offer. The transaction was thereafter closed, with the plaintiffs accepting the New Mexico land contract as a $6,000 credit toward an expressed sales price of $21,700.

No payments were ever made by the land contract vendee to the Richtars. It is admitted by the Ulans that the land which is the subject of the contract is '* * * practically worthless * * *' We will refer to certain additional facts in our discussion of the seven separate propositions advanced by appellants Ulan.

1. FAILURE OF THE COURT TO GRANT A MISTRIAL

Appellants' first contention is that the trial court should have granted their motion for a mistrial when it was learned that a juror and the witness Katz had a brief conversation during a recess in the trial. Both stated to the trial judge, under oath and in the absence of each other, that they had not discussed any matter relating to the trial. The juror stated unequivocally to the trial judge that he could consider and decide the case fairly and impartially.

Where there has been misconduct on the part of a juror, the grant or denial of a motion for a mistrial is a matter within the sound discretion of the trial court. Sanders v. Beckwith, 79 Ariz. 67, 70, 283 P.2d 235, 238 (1955). Prejudice to the moving party will not be assumed; it must appear probable from the record. Webb v. Hardin, 53 Ariz. 310, 89 P.2d 30 (1939). ¹ We find no probability of prejudice in the record before us here. This court sustained the denial of a motion for mistrial under similar but ostensibly less innocent circumstances in Simpson v. Heiderich, 4 Ariz.App. 232, 234, 419 P.2d 362, 364 (1966).

2. ADMISSIBILITY OF EVIDENCE

Appellants contend that the trial court should not have permitted appellees to introduce evidence relating to the 'three-cornered' transaction between Ulan, Kay, and a person residing in Texas by virtue of which Ulan came into possession of the vendor's interest in the New Mexico land contract.

The purpose of appellees in introducing evidence of the transaction was to attempt to show that Ulan had given up nothing of value in return for the two ² New Mexico land contract interests that he received. Appellants claim that the evidence was irrelevant and immaterial to any issue in the case. If this is so, there would be no reversible error, for the testimony elicited is innocuous unless it has probative value as to the fraud issue on trial. Hence, we would not reverse in any event. However, the testimony in question culminated with a statement by the witness to the effect that Ulan stated he was willing to take the vendor's interest in the New Mexico land contracts, in spite of their questionable value, in view of the fact that he had only a limited and doubtful investment in the motel which he was conveying. We believe the testimony objected to was within the periphery of what the trial court, in its discretion, could consider relevant in this fraud action.

3. DENIAL OF A DIRECTED VERDICT FOR APPELLANTS

Appellants' third contention is that the trial court erroneously failed to grant their motion for a directed verdict at the close of plaintiffs' case. The basis of appellants' motion was that plaintiffs had failed to prove 'reliance' and 'right to rely.' See Moore v. Meyers, 31 Ariz. 347, 355, 253 P. 626, 628 (1927).

In essence, appellants claim that Mrs. Richtars placed reliance upon the advice of her nephew, Louis Richtars, with respect to acceptance of the land contract interest, and that by reason of her calling in her nephew for advice, as a matter of law, it must be held that she did not rely upon any representation made by Ulan with respect to the land contract.

The mere fact that a representee is ignorant or suspicious and seeks the advice of others does not preclude reliance upon the false representation. Equitable Life & Casualty Ins. Co. v. Lee, 310 F.2d 262, 267 (9th Cir. 1962). In this case, only the most general kind of advice was sought by Mrs. Richtars from her nephew, and his advice was given in the light of the same representation that had been made to Mrs. Richtars.

Mrs. Richtars testified that she relied upon the representations of Ulan transmitted to her by the real estate agent. There is sufficient circumstantial evidence that her son, the other plaintiff, followed her lead and did the same. We know of no law which mandates that this evidence be set aside. The question was properly submitted to the jury. See Carrel v. Lux, 101 Ariz. 430, 420 P.2d 564 (1966).

4. IMPROPER CONDUCT OF COUNSEL

Appellants charge that they were deprived of a fair trial by reason of an agreement made between counsel for plaintiffs and counsel representing all of the other defendants in the case, who included the salesman, Maloney, and his broker. The agreement was described as a 'mutual options' settlement agreement. There is no sworn testimony as to the precise terms of the agreement; there is only the discussion and argument by counsel as to its nature and effect before the lower court.

The discussion is not entirely clear and consistent, but it appears that prior to or during the trial, plaintiffs' counsel and counsel for all defendants, except appellants, agreed that at any time before the verdict, plaintiffs' counsel could tender counsel for those defendants a covenant not to execute and receive back the sum of $1,000. Counsel for those defendants, on the other hand, had the reciprocal option of tendering to plaintiffs $1,000, in which event it was agreed that plaintiffs' counsel would give in return the covenant not to execute against those defendants in the event of a jury verdict against any of them. Counsel for plaintiffs-appellees stated that it was not a binding agreement, and that it was to be void if the jury returned a verdict only against appellants. That contingency occurred, and the Richtars did not receive $1,000 from these other defendants.

Appellants urge that we should not sanction such an agreement. Appellants' argument on this point, though indignant, is not supported by any citation of authority. Though we can conceive of various situations in which prejudice might result to a party intentionally kept in ignorance of a settlement agreement similar to this, we are not convinced that appellants have been deprived of a fair trial by reason of this particular agreement. Appellees had no duty to...