Wilson Supply, Inc. v. Fradan Mfg. Corp., 20001035.

• Decision Date: 06 September 2002
• Docket Number: No. 20001035.,20001035.
• Citation: 2002 UT 94,54 P.3d 1177
• Parties: WILSON SUPPLY, INC., dba Pro Power Equipment Co., Plaintiff and Appellee, v. FRADAN MANUFACTURING CORP., Defendant and Appellant.
• Court: Utah Supreme Court

54 P.3d 1177

2002 UT 94

WILSON SUPPLY, INC., dba Pro Power Equipment Co., Plaintiff and Appellee, v. FRADAN MANUFACTURING CORP., Defendant and Appellant.

No. 20001035.

Supreme Court of Utah.

September 6, 2002.

David L. Bird, Gregory J. Adams, Salt Lake City, for plaintiff.

Frank D. Mylar, Salt Lake City, for defendant.

RUSSON, Justice:

¶ 1 Fradan Manufacturing Corporation ("Fradan") appeals the trial court's judgment in favor of Wilson Supply, Inc. ("Wilson Supply"). We affirm.

BACKGROUND

¶ 2 From approximately September 1996 to November 1997, Fradan supplied Wilson Supply "d.b.a." Pro Power Equipment Company ("Pro Power")¹ with various yard and garden equipment products, and attendant repair parts ("Fradan inventory") for retail sale to consumers and end users. The agreement between Wilson Supply and Fradan was unwritten.

¶ 3 In or around October 1997, Wilson Supply notified Fradan that Wilson Supply was terminating its agreement to retail Fradan's products and parts and requested that Fradan repurchase Wilson Supply's unsold Fradan inventory pursuant to Fradan's statutory obligation to do so as set forth in section 13-14a-2 of the Utah Code, the Utah "Equipment Repurchase from Retail Dealers" or "buy-back" statute. See Utah Code Ann. §§ 13-14a-1 to -9 (1999). Fradan refused to repurchase Wilson Supply's unsold Fradan inventory.

PROCEDURAL HISTORY

¶ 4 On December 3, 1998, Wilson Supply brought suit to compel Fradan's compliance with its statutory obligations under the buy-back statute. Wilson Supply did not request a jury trial.

¶ 5 In response to a discovery dispute, on November 12, 1999, Fradan moved the trial court for a protective order aimed at protecting certain of Fradan's pricing information. In February 2000, both Wilson Supply and Fradan moved for summary judgment. On March 24, 2000, the trial court held a hearing on the cross-motions for summary judgment and Fradan's outstanding motion for a protective order. The trial court heard oral argument on these motions but reached no conclusion and made no ruling. According to a minute entry dated August 3, 2000, the trial court notified Wilson Supply and Fradan of the trial court's sua sponte scheduling of an evidentiary hearing on the issue of whether Wilson Supply was a dealer or a wholesaler for purposes of the buy-back statute.

¶ 6 On September 19, 2000, the evidentiary hearing was held. Wilson Supply and Fradan were present and represented by counsel, and the trial court allowed each side to present evidence and to examine and cross-examine witnesses. Brett Wilson and Scott Wilson, president and vice president of Wilson Supply, respectively, and Frank Debartolo, president of Fradan, testified. At the conclusion of the oral testimony, the trial court made oral findings of fact on the record and concluded as a matter of law that Wilson Supply was a dealer under the buy-back statute and that the statute obligated Fradan to repurchase Wilson Supply's unsold Fradan inventory. The trial court instructed Wilson Supply to prepare an order and judgment consistent with the trial court's ruling. Fradan made no procedural objections at the conclusion of the evidentiary hearing and submitted objections only to the form of the proposed order and judgment. On October 31, 2000, the trial court entered its order and judgment in favor of Wilson Supply. Fradan timely appealed.

¶ 7 On appeal, Fradan argues that the trial court misinterpreted and misapplied the buy-back statute in determining that Wilson Supply was a dealer for purposes of the statute, obligating Fradan to repurchase Wilson Supply's unsold Fradan inventory. In addition, Fradan argues that, to the extent the trial court found facts based upon the oral testimony received at the evidentiary hearing on the cross-motions for summary judgment and relied upon those findings of fact in reaching its legal conclusions, the trial court's findings of fact were clearly erroneous and not supported by sufficient evidence. Fradan also argues that because Wilson Supply sold its Pro Power retail outlets during the pendency of the action, Wilson Supply no longer has the right to assert its repurchase rights under the buy-back statute. Finally, Fradan argues that the trial court's findings of fact, conclusions of law, and grant of judgment against Fradan were retributive and punitive, stemming from the trial court's "hostility and anger" toward Fradan regarding the parties' underlying discovery dispute and Fradan's motion for a protective order.²

¶ 8 Wilson Supply counters that the trial court's findings of fact were supported by sufficient evidence and that the trial court correctly interpreted and applied the buyback statute. Wilson Supply also denies Fradan's allegations that the trial court was motivated in its ruling by bias or animosity against Fradan or that Wilson Supply attempted to capitalize on any "home-state bias" from the trial court.

STANDARD OF REVIEW

¶ 9 This case was before the trial court on cross-motions for summary judgment. However, instead of ruling on the motions, the trial court set the matter for an evidentiary hearing on the dispositive issue of whether Wilson Supply was a dealer or a wholesaler. At the hearing, both parties called and cross-examined witnesses. The trial court then made oral findings of fact and concluded as a matter of law that Wilson Supply was a dealer. The evidentiary hearing was essentially a trial on the merits of the dispositive issue and should be treated as such. See Tripp v. May, 189 F.2d 198, 200 (7th Cir.1951); 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil § 2720 (3d ed. 1998) ("[W]hen the [trial] court is ruling on cross-motions [for summary judgment], [and] the facts . . . become fully developed at the hearing on the motions[,] . . . in a nonjury case the court may proceed to decide the factual issues and render a judgment on the merits without any further delay if it is clear that there is nothing else to be offered by the parties and there is no prejudice in proceeding in this fashion. . . . [T]his procedure amounts to a trial of the action and technically is not a disposition by summary judgment.").

¶ 10 The events of the evidentiary hearing, including the parties' presentation and cross-examination of witnesses and the trial court's entry of findings of fact and conclusions of law, essentially and practically amount to a trial on the merits of the case. The parties' conduct subsequent to the proceeding below also supports this conclusion. Fradan made no objection at the close of the evidentiary hearing to the trial court's entry of findings of fact and conclusions of law or the procedural course of the case at that juncture. Wilson Supply argues in its briefs and at oral argument before this court that the evidentiary hearing was a trial and should be treated as such for purposes of appellate review. Finally, on appeal, Fradan, at least in the alternative, appears to view the proceedings below as a trial by challenging the sufficiency of the evidence to support the trial court's findings of fact. Therefore, we treat this case as if it had come before us for review after a bench trial on the merits, and we review it accordingly.

¶ 11 "Generally, we review a trial court's legal conclusions for correctness, according the trial court no particular deference." Orton v. Carter, 970 P.2d 1254, 1256 (Utah 1998); see also Newspaper Agency Corp. v. Auditing Div. of State Tax Comm'n, 938 P.2d 266, 267 (Utah 1997). Specifically, whether the trial court properly interpreted and applied the Utah buy-back statute in this case is a question of law that we review for correctness. See State Dep't of Natural Res. v. Huntington-Cleveland Irrigation Co., 2002 UT 75, ¶ 12, 52 P.3d 1257; State ex rel. Div. of Forestry, Fire & State Lands v. Tooele County, 2002 UT 8, ¶ 8, 44 P.3d 680.

¶ 12 We review a trial court's findings of fact according to the standard set out in Utah Rule of Civil Procedure 52(a), which provides: "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Id.; see also Orton, 970 P.2d at 1256-57; Consolidation Coal Co. v. Div. of State Lands & Forestry, 886 P.2d 514, 522 (Utah 1994); Reid v. Mut. of Omaha Ins. Co., 776 P.2d 896, 899 (Utah 1989). "A trial court's factual finding is deemed `clearly erroneous' only if it is against the clear weight of the evidence." Doelle v. Bradley, 784 P.2d 1176, 1178 (Utah 1989); see also Willard Pease Oil & Gas Co. v. Pioneer Oil & Gas Co., 899 P.2d 766, 773 (Utah 1995); Reid, 776 P.2d at 899-900.

ANALYSIS

I. STATUTORY INTERPRETATION

¶ 13 Fradan first argues that the trial court erred in concluding as a matter of law that Wilson Supply was a dealer as defined by the buy-back statute and therefore was entitled to the benefit of the manufacturer repurchase requirement of the statute. Fradan contends that, inasmuch as Wilson Supply sold certain of its inventory, allegedly including some of its Fradan inventory, at wholesale, it was a wholesaler as defined by the buy-back statute and therefore precluded from relying on the manufacturer repurchase provisions of the buy-back statute since those provisions apply solely to dealers, not to wholesalers. Essentially, Fradan argues that the buy-back statute should be interpreted such that only business entities conducting business exclusively as dealers are entitled to the benefits of the repurchase provisions of the statute. In other words, according to Fradan's interpretation of the statute, because Wilson Supply sold some of its inventory at wholesale even though Wilson Supply sold its Fradan inventory at retail through its Pro Power stores, it is disqualified from the benefits of the repurchase provisions because those provisions of the...