Cockings v. Austin

1995 OK 46, 898 P.2d 136, 66 O.B.A.J. 1584, 1995 Okla. LEXIS 59, 1995 WL 265151
CourtSupreme Court of Oklahoma
DecidedMay 9, 1995
Docket77703
StatusPublished
Cited by5 cases

This text of 1995 OK 46 (Cockings v. Austin) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cockings v. Austin, 1995 OK 46, 898 P.2d 136, 66 O.B.A.J. 1584, 1995 Okla. LEXIS 59, 1995 WL 265151 (Okla. 1995).

Opinion

WATT, Justice:

This appeal arises from the latest of five suits involving Appellant, William R. Austin, and Appellees, Ronald W. Cockings and his wife Bonnie H. Cockings. The parties’ relationship began in August 1984, when they agreed to set up a corporation to purchase Troxell Auto Parts in Shawnee, Oklahoma. They formed their corporation, and named it Troxell Parts. Austin owned one-half the shares. The other half were owned by the Cockings.

Austin was a Shawnee businessman, and Ronald Cockings was vice president of a Shawnee bank where Austin did business. Austin and Cockings agreed that Cockings would resign from the bank, become president and general manager of Troxell Parts, and take responsibility for the business’s day to day operations.

The parties’ corporation, Troxell Parts, bought the Troxell Auto Parts business, and the real property upon which it was conducted, from J. Emery Troxell and Iona Mae Troxell. The parties paid the Troxells $375,-000 in cash. The Troxells also took a $230,-000 note from Troxell Parts. In addition, Austin gave a personal guaranty to the Trox-ells for fifty percent of the $230,000 note, and the Cockings personally guaranteed the other fifty percent.

Later, Troxell Parts borrowed $325,000 from the American National Bank of Shawnee. The American National note was secured by a real estate mortgage on the realty *138 Troxell Parts had acquired from Troxell Auto Parts. Austin and the Cockings jointly and severally guaranteed payment of the entire $325,000 note.

In May 1986 Austin relieved Cockings of his management responsibilities. Earlier, Ronald Cockings had transferred twenty-five percent of the shares of Troxell Parts to Austin. These events gave rise to the first of the five suits between the parties in the District Court of Pottawatomie County.

Case No. 86-953

In October 1986, the Cockings sued Austin for, among other things, a declaratory judgment regarding the ownership of the shares of Troxell Parts. The District Court of Pottawatomie County entered an order holding:

IT IS, THEREFORE, THE ORDER AND JUDGMENT OF THIS COURT that the ownership of stock in Troxell Parts, Inc., as of this date is one hundred and twenty five (125) shares in Bonnie H. Cockings, and three hundred and seventy-five (375) shares in William R. Austin.
IT IS THE FURTHER ORDER AND JUDGMENT OF THIS COURT that the effective date of the transfer of shares of Troxell Parts, Inc., from Ronald W. Cock-ings to William R. Austin was October 23, 1985.
IT IS THE FURTHER ORDER OF THE COURT that upon such transfer, that William R. Austin became liable for three-fourths (%ths) of all outstanding note indebtedness of the corporation, upon which the parties were individually hable, as of that date excluding any indebtedness on the real property.
Case No. 88-662
Troxell Parts defaulted on its note to the American National Bank of Shawnee. American National sued Troxell Parts, Austin, and the Cockings, to foreclose its real estate mortgage. On September 8, 1989, following the foreclosure and sale of the real property secured by the mortgage, the District Court of Pottawatomie County entered a deficiency judgment for American National against Austin and the Cockings on the guaranties they had given American National. Austin satisfied American National’s judgment and sought contribution from the Cockings for a portion of the amount he had paid American National.
The Cockings asserted as an affirmative defense that Austin should be limited to a recovery of no more than twenty-five percent of the amount Austin had paid to American National. The twenty-five percent-seventy-five percent judgment in case No. 86-953 was the basis for this affirmative defense.
The Cockings also asserted a counterclaim grounded in fraud and collusion. 1 The trial court granted Austin’s motion for judgment on opening statement with respect to the Cockings’ counterclaim. The judgment in case No. 86-953 was not part of the basis for the Cockings’ counterclaim.
A jury returned a verdict for the Cockings on Austin’s claim for contribution. The trial court, however, granted Austin’s motion for new trial, and we affirmed. The matter has not been retried.
Case No. 89-233
Troxell Parts also defaulted on its $230,000 note to the Troxells. The Troxells sued the Cockings on the Cockings’ guaranty of one-half of the note. Austin had previously paid the Troxells’ one-half of the amount due on their note. On July 26, 1989, the Cockings joined Austin as a third party defendant. The Cockings sought indemnification from Austin for any liability arising from the Trox-ells’ note. The Cockings agreed to a judgment against them in favor of the Troxells. The trial court dismissed the Cockings’ third party claim against Austin because the Cock-ings had not yet paid the Troxell’s judgment. The trial court held that the indemnity judgment in case No. 86-953 indemnified against *139 loss, not liability. Thus, held the trial court, the Cockings’ indemnity claim was not ripe for adjudication.
Case No. 90-197
In February 1990, the Cockings paid the Troxells $175,648.64 in full satisfaction of the Troxells’ judgment. This amount included all accrued interest and attorneys’ fees. The Cockings sued Austin for indemnity, but dismissed their case without prejudice after the trial court refused to allow them to amend and add a tort cause of action for misappropriation of funds and other claims of wrongdoing in the management of the Troxell Parts business.
Case No. 90-112
In July 1990, the Cockings refiled their suit against Austin for the $175,648.64 that they had paid the Troxells. The Cockings claimed that Austin had breached his fiduciary duties, had colluded with bank officers, and misappropriated funds. Later, the Cockings amended their petition to include a second cause of action for indemnity for $87,-824.32, which amount was one-fourth of the total amount that Troxell Parts had owed the Troxells. The Cockings relied on the judgment in case No. 86-953 to support then-second cause of action for $87,824.32.
The case was tried to a jury. On the Cockings’ first cause of action, breach of fiduciary duty, the jury found “the issues in favor of the Plaintiffs,” but fixed “damages in the amount of $0.” The jury awarded the Cockings $175,648.64 on their second cause of action for indemnity. The trial court entered the following judgment on the breach of fiduciary duty cause of action:
AGAINST: William R. Austin
IN FAVOR OF: Ronald W. Cockings and Bonnie H. Cockings on their first cause of action.
AMOUNT: $0.00
NATURE: Damages

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Cite This Page — Counsel Stack

Bluebook (online)
1995 OK 46, 898 P.2d 136, 66 O.B.A.J. 1584, 1995 Okla. LEXIS 59, 1995 WL 265151, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cockings-v-austin-okla-1995.