Wyoming Bank and Trust Co. v. Waugh

• Decision Date: 20 February 1980
• Docket Number: 5122,Nos. 5121,s. 5121
• Citation: 606 P.2d 725
• Parties: WYOMING BANK AND TRUST COMPANY, a Wyoming Banking Corporation, Appellant (Defendant), v. Carl L. WAUGH and Fay L. Waugh, husband and wife, Appellees (Defendants), Nancy L. Williams, Appellee (Plaintiff). Carl L. WAUGH and Fay L. Waugh, husband and wife, Appellants (Defendants), v. Nancy L. WILLIAMS, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 725

606 P.2d 725

WYOMING BANK AND TRUST COMPANY, a Wyoming Banking Corporation, Appellant (Defendant), v. Carl L. WAUGH and Fay L. Waugh, husband and wife, Appellees (Defendants), Nancy L. Williams, Appellee (Plaintiff).

Carl L. WAUGH and Fay L. Waugh, husband and wife, Appellants (Defendants), v. Nancy L. WILLIAMS, Appellee (Plaintiff).

Nos. 5121, 5122.

Supreme Court of Wyoming.

Feb. 20, 1980.

William J. Kirven and Paul G. Jarvis, of Kirven & Kirven, Buffalo, signed the briefs and Mr. Kirven appeared in oral argument on behalf of Wyoming Bank and Trust Co.

Wade Brorby and Dan R. Price II of Morgan & Brorby, Gillette, signed the briefs and Mr. Price appeared in oral argument on behalf of Carl L. Waugh and Fay L. Waugh.

Charles R. Spratt, Buffalo, and Richard G. Miller, Casper, signed the briefs and appeared in oral argument on behalf of Nancy L. Williams.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE and ROONEY, JJ.

ROONEY, Justice.

Two cases are here consolidated on appeal. In Case No. 5121, appellant Wyoming Bank and Trust Company (hereinafter referred to as Bank) appeals from a portion of a judgment denying its counterclaim against appellee Nancy L. Williams (hereinafter referred to as Williams) and denying its cross claim against appellees Carl L. Waugh and Fay L. Waugh (hereinafter referred to as Waughs) for monies expended for legal fees in connection with the matter. In Case No. 5122, appellants Waughs appeal from a portion of the same judgment which awarded Williams $29,348.00 for breach of contract and $1.00 for punitive damages.

We affirm the judgment as it pertains to Case No. 5121; and we reverse the judgment as it pertains to Case No. 5122.

A single transaction has resulted in two separate cases being filed in the District Court, Fourth Judicial District, County of Johnson. The two cases were handled by different district judges. From these two cases, four separate appeals have been filed in this court. We have previously disposed of two of these appeals, one of which resulted from each of the two cases filed in the district court. ¹ The other two appeals are the ones here consolidated. Since the one transaction was involved in all of the cases and since our disposition of one of the cases previously before us is determinative of one of the cases now before us, the following chronology is in order:

The following facts of the transaction were set forth substantially as follows in Williams v. Waugh (see footnote 1). On May 16, 1975, Waughs entered into an agreement with Williams and her husband for the sale of a business known as the Idlewild Cafe and Lounge in Buffalo, Wyoming (hereinafter basic agreement), and a lease for the premises. Waughs were sellers and lessors, and Williams and her husband were buyers and lessees. Within the same time frame, Williams and her husband executed a security and financing statement for certain furniture, fixtures, equipment, and kitchen and diningware (hereinafter first financing statement), a reassignment of the liquor license, a real estate mortgage on other property owned by Williams and her husband, a promissory note, and an escrow letter. Waughs executed a mortgage release, an assignment of liquor license, an escrow letter, and a bill of sale. The Bank was designated escrow agent to hold the basic agreement, the mortgage, the reassignment of the liquor license and the release of mortgage.

Thereafter, Williams and her husband were divorced, and Williams succeeded to the interest of her husband in the transaction. On March 28, 1977, she executed a security and financing agreement (hereinafter second financing statement) for the liquor license in favor of Waughs.

Between December 23, 1976, and October 26, 1977, various third parties secured seven default judgments in justice of the peace or district courts against Williams or against Williams and her husband. During the summer months of 1977, the Internal Revenue Service filed several tax liens, some against Williams and her husband separately and some against them jointly. On August 17, 1977, Internal Revenue agents took the liquor license from the wall of the cafe and lounge, but replaced it within a day.

The consideration for the basic agreement sale was $93,150.00. After initial payments, the balance of $90,000.00 (with interest at 71/2%) was to be paid in twenty semi-annual installments. At the time of alleged defaults, the payments were current and the balance due, with interest, was about $61,000.00. The lease agreement was for a five-year term for $27,000.00 payable in monthly installments of $450.00.

The four cases on appeal then developed, insofar as pertinent to the matter before us, as follows:

On October 27, 1977, Waughs brought a foreclosure action against Williams (hereinafter referred to as Case A).

On December 6, 1977, Williams brought a breach of contract and fraud action against Waughs, Bank, City of Buffalo, William D. Omohundro, and Terrence L. O'Brien (hereinafter referred to as Case B).

On December 8, 1977, after a motion to dismiss was denied, Williams filed a counterclaim against Waughs in Case A, alleging among other things, "all the allegations made by the defendant, Nancy Williams, in her complaint against the plaintiffs" in Case B.

On March 31, 1978, Bank answered the amended complaint and filed a counterclaim against Williams and a cross claim against Waughs in Case B for monies expended for legal services and for punitive damages.

On May 12, 1978, summary judgment was entered in favor of Waughs on both Waughs' complaint and Williams' counterclaim in Case A. The case was appealed to this court.

On October 31, 1978, Bank was granted a summary judgment against Williams on Williams' cause of action against Bank in Case B. Williams appealed from the judgment to this court.

On January 2, 1979, and after a trial to the court, judgment was entered against Bank on its counterclaim and cross claim, and judgment was entered in favor of Williams against Waughs for $29,349.00 in Case B. Both Bank and Waughs now appeal from this judgment. (Judgment was also in favor of the City of Buffalo. Omohundro and O'Brien were previously granted summary judgment.)

On February 26, 1979, this court denied Williams' motion to permit late docketing and granted Bank's motion to dismiss Williams' appeal from the summary judgment of October 31, 1978 in Case B, thus disposing of one of the cases on appeal (see footnote 1) resulting from this transaction.

On April 18, 1979, this court reversed the summary judgment in favor of Waughs in Case A and remanded the case for further proceedings, thus disposing of the second of the cases on appeal (see footnote 1) resulting from this transaction.

CASE NO. 5122

In reversing the summary judgment in Case A, we noted that:

"The basic agreement, the lease and the two security and financing statements (hereinafter entire agreement) are all part of a single transaction. * * * The basic agreement does refer to the first financing statement. It provides that such financing statement 'shall be executed * * * for said fixtures and equipment transferred hereunder.' The first financing statement also refers to the basic agreement. It provides that it 'is executed as security for the balance due pursuant to' the basic agreement. Even the second financing statement states that it is 'pursuant to' the basic agreement.

"The terms of the basic agreement, the two financing agreements and the lease agreement of the parties, i. e., the entire agreement, and the terms thereof, must be considered in determining whether or not a genuine issue of a material fact exists in this matter.

" ' * * * Where a written contract refers to another instrument and makes the terms and conditions of the other instrument a part of it, the two will be construed together as the agreement of the parties. Two instruments executed at the same time as one transaction in order to effectuate a single purpose, and each referring to the other, must be considered together. * * * ' 17 Am.Jur.2d Contracts, § 263, pp. 666, 667." Williams v. Waugh, 593 P.2d 583, 585-586 (1979).

The summary judgment against Williams was reversed in that case because it was predicated on only a portion of the entire agreement. ² The same error was made in this case (Case No. 5122), the trial court having made the following specific findings in the judgment:

"5. That civil action No. 5305 (Case A) in the above entitled court involved a foreclosure strictly on the Security Agreements and not on the Contract For Sale.

"6. This action is governed by the Contract for Sale which was placed in escrow at Wyoming Bank and Trust Company, and that agreement alone defines default insofar as this action is concerned.

"7. That the reference to the Security Agreement in the Contract for Sale is surplusage."

Such findings are contrary to the holding which we subsequently made in Case A Findings number 6 and 7 evidence the failure of the trial court to consider the entire agreement in making its decision in this case. Since the judgment must result from a consideration of every provision of an agreement and since such was not here done, the judgment against Waughs must be reversed.

The "dissenting" opinion in this matter engenders the following additional remarks:

1. The "dissenting" opinion should be a specially concurring opinion.

It is plainly stated in the last sentence of the second preceding paragraph of this opinion that the judgment "against Waughs must be reversed." Again in the last sentence of this opinion we state that we reverse as to Case No. 5122 and we add a footnote that a remand is not necessary since the issues are already before the trial court on the counterclaim in Case B. We also state the fact of reversal in the second sentence of this opinion. And that is the disposition contended for in both the first and the penultimate paragraphs of the "dissenting" opinion.

2. The "dissenting" opinion...