Patel Partners v. Rigney

602 So. 2d 371, 1992 Ala. LEXIS 724, 1992 WL 180704
CourtSupreme Court of Alabama
DecidedJuly 31, 1992
Docket1910554
StatusPublished

This text of 602 So. 2d 371 (Patel Partners v. Rigney) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Patel Partners v. Rigney, 602 So. 2d 371, 1992 Ala. LEXIS 724, 1992 WL 180704 (Ala. 1992).

Opinion

SHORES, Justice.

This case concerns whether Gary Rigney is entitled as a matter of law to a $50,000 finder’s fee to be paid out of construction contract proceeds in which Patel Partners (“Patel”) has an interest. The Madison County Circuit Court entered a partial summary judgment for Rigney; the court made that judgment final pursuant to Rule 54(b), A.R.Civ.P. Patel appeals; we affirm.

In 1987, Davis International, Inc. (“Davis”), entered into a construction con[372]*372tract with the United States Feed Grains Council (“USFGC”). Davis needed financing for the project and agreed to pay Rig-ney a $50,000 finder’s fee if Rigney could find investors for the job. Rigney found Federated Investors (“Federated”), and, in September 1987, Davis entered into a joint venture agreement with Federated. Davis and Federated agreed that the order of payment from the proceeds of the construction contract would be as follows, reading in pertinent part:

“5. From the proceeds received for the U.S. Feed Grains Council under the Project, periodic disbursements from the joint account shall be made as follows:
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“e. Fifth, a fee in the sum of Fifty Thousand ($50,000.00) Dollars shall be paid to attorney Gary Rigney chargeable to the share of DA VIS under paragraph (g) below. [Emphasis added.]
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“g. Seventh, the remaining proceeds shall be distributed among the parties with DAVIS receiving sixty percent (60%) of the proceeds and the remaining forty percent (40%) being payable to F.I.; PROVIDING HOWEVER, that a reserve balance shall be maintained in the joint account in an amount equal to One Hundred Fifty Thousand ($150,000) Dollars plus an amount equal to any outstanding credit facilities or guaranties incurred by the parties in the performance of the Project contract.”

On March 18, 1988, Davis and Federated amended the joint venture agreement to ensure payment to Rigney by collaterally assigning $50,000 from the proceeds of the contract with USFGC.

Davis subsequently needed more financing. In July 1989, Patel replaced Federated on the contract, thus providing financial and supervisory assistance to Davis. While this was being negotiated, Patel consulted Rigney about the agreement. Rig-ney tried to put a clause in the agreement holding Patel, along with Davis, responsible for the payment of Rigney’s claim. Patel told Rigney that it would not assume that payment duty, that Davis would remain solely liable for the claim, and that the claim would not be paid out of the construction contract proceeds.

A provision was then put in the agreement regarding the order of disbursement of the proceeds received under the contract, reading in pertinent part as follows:

“3. All proceeds received from the U.S. Feed Grains Council shall be deposited in an account bearing the name of Mercantile Joint Venture, the Joint Venture composed of DAVIS INTERNATIONAL, INC. and PATEL PARTNERS. All disbursements from the account shall bear the signatures of representatives of both DI and Partners. Disbursements from the joint venture shall be applied in the following order:
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“(c) Third, the lien or collateral interest existing against all proceeds or contract receivables derived under Task #4 from the said Feed Grains contract described in paragraph 3 of that certain Agreement dated March 18, 1988, a copy of which is attached as Exhibit ‘C\ shall be paid as noted under March 18, 1988 Agreement.” (Emphasis added.)

Stated otherwise, Rigney’s claim was still to be paid out of Davis’s share of the construction contract proceeds, as was originally agreed between Davis and Federated. Thereafter, Patel assumed Davis’s duties and obligations under the contract, and, in July 1990, Davis assigned to Patel its right to all proceeds under the contract for taking over performance of the contract.

Rigney filed a UCC-1 form for the contract proceeds in the District of Columbia in or about October 1990, and in December he first notified USFGC that he claimed an interest in the proceeds. Rigney claims he also filed a UCC-1 in Alabama, but it was not attached to his affidavit. In February 1991, Patel entered into a settlement agreement with the various parties to terminate the construction contract, and the $50,000 was placed in escrow during litigation.

On March 25, 1991, Rigney sued Patel, Davis, USFGC, the Merchantile Joint Venture, and the American Soybean Associa[373]*373tion. In his complaint, Rigney requested declaratory relief as to the respective parties’ right to the funds. Patel answered, denying all allegations. In August, Rigney filed a motion for summary judgment, and on November 22, 1991, the court entered a partial summary judgment for Rigney awarding him the $50,000 being held in escrow, stating:

“This cause having come before this Court on the Motion for Summary Judgment of the plaintiff, the affidavit of the plaintiff, Motion for Summary Judgment, all the pleadings of the parties including specifically plaintiffs complaint seeking declaratory and other relief, and all lawful evidence presented by said parties. Oral arguments having been heard on this matter on the 20th day of September 1991, this court finds that there is no genuine issue of material fact and that the plaintiff is entitled to a partial summary judgment against defendant, Patel Partners, as a matter of law.
“Based on the foregoing and in response to plaintiffs Claim Five for declaratory judgment, the court ascertains, determines, and finds as follows:
“1. That defendant, Davis International, Inc., is indebted to plaintiff in the amount of $50,000.00, plus interest at the statutory rate of 6% from March 25,1991 (being the date this action was filed), in the sum of $1,964.38.
“2. That such indebtedness is secured by a perfected security interest in favor of plaintiff in the contract receivables from American Soybean Association (‘ASA’) and United States Feed Grains Council (‘USFGC’) and the cash proceeds thereof (including the $50,-000.00 escrowed by defendants ASA and USFGC to cover plaintiff’s claim);
“3. That plaintiff’s claim to, and perfected lien in, the said escrowed $50,-000.00 is superior to the claims of defendant, Patel Partners;
“4. That plaintiff is entitled to enforce its lien on the escrowed $50,-000.00 and any interest earned thereon; and
“5. That defendants, ASA and USFGC, as escrow agents shall release said $50,000.00 to plaintiff.”

We must determine whether the trial court erred in entering the partial summary judgment for Rigney. Rule 56, A.R.Civ.P., sets forth a two-tiered standard for determining whether to enter a summary judgment. In order to enter a summary judgment, the trial court must determine: 1) that there is no genuine issue of material fact, and 2) that the moving party is entitled to a judgment as a matter of law. In determining whether a summary judgment was properly entered, the reviewing court must view the evidence in a light most favorable to the nonmovant. See Turner v. Systems Fuel, Inc., 475 So.2d 539, 541 (Ala.1985); Ryan v. Charles Townsend Ford, Inc., 409 So.2d 784 (Ala.1981).

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Bluebook (online)
602 So. 2d 371, 1992 Ala. LEXIS 724, 1992 WL 180704, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patel-partners-v-rigney-ala-1992.