Uhlmann v. Richardson

287 P.3d 287, 48 Kan. App. 2d 1
CourtCourt of Appeals of Kansas
DecidedAugust 3, 2012
DocketNo. 105,147
StatusPublished
Cited by29 cases

This text of 287 P.3d 287 (Uhlmann v. Richardson) is published on Counsel Stack Legal Research, covering Court of Appeals of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Uhlmann v. Richardson, 287 P.3d 287, 48 Kan. App. 2d 1 (kanctapp 2012).

Opinion

Leben, J.:

Robert Uhlmann guaranteed die debt of a failed business. A jury decided that Jay and Cynthia Richardson did too, though drey had denied having done so. When the business failed, Uhlmann paid the remaining business debt and then sued the Richardsons for their share under two legal tiieories, contribution and unjust enrichment. The trial judge submitted die unjust-enrichment claim to a jury, and the jury ruled in Uhlmann’s favor.

The Richardsons have appealed, claiming that the unjust-enrichment claim shouldn’t have been submitted to a jury at all. We agree with them that only die more closely confined contribution claim fit the facts of this case. Under contribution rules long recognized in Kansas, each coguarantor must pay his or her proportionate share of the guaranteed indebtedness—not die much more uncertain measure of damages normally applied in unjust-enrichment cases.

The Richardsons’ victory on diis issue may be in name only, however, because Uhlmann cross-appealed to preserve his contribution claim in case we held that unjust enrichment didn’t apply. Because the jury determined tiiat the Richardsons did sign the guarantee of die business debt, the Richardsons are responsible— subject to one caveat—for dieir proportionate share of the debt they had guaranteed. And that amount is slightiy greater than the jury award.

The caveat is that Uhlmann’s contribution claim is a claim in equity, and the Richardsons claimed equitable defenses—defenses that could limit or eliminate Uhlmann’s recovery. The district court made no factual findings regarding those defenses, so we must remand the case to the district court for its determination on whether any equitable defense affects the Richardsons’ liability for contribution.

We also address one other issue on this appeal: The Richardsons contend that Uhlmann lost the ability to pursue his cross-appeal [3]*3because Uhlmann first attempted to use court procedures to collect the judgment he had obtained against the Richardsons in the district court. But Uhlmann didn’t collect anything on the judgment; he merely filed a garnishment so as to force the Richardsons to file an appeal bond, staying collection efforts on appeal. A judgment creditor does not forfeit the right to appeal merely by engaging in collection efforts that collect no money, and we find that Uhlmann did not lose the ability to pursue his cross-appeal.

Factual Background

Michael Russell started and managed a self-storage business in Dallas, a business drat he got off die ground by borrowing $2.67 million in August 2004 from Great Southern Bank. The business was formed as a limited-liability company called Walton Walker U-Stor, LLC (Walker U-Stor). Loan documents from Great Southern Bank included several guarantors: Russell and his wife, Carol; Robert Uhlmann (personally and through a revocable trust); and Jay and Cynthia Richardson (personally and through their revocable trusts).

According to the documents, the Russells gave a written guarantee for $427,200, or 16% of the total loan. Uhlmann’s guarantee covered 60% of the loan, just over $1.6 million. And the Richard-sons guaranteed 24%, or $640,800.

The Richardsons denied having signed any guarantees. But at trial, the juiy was separately asked to determine drat question, and the jury found tiiat both of the Richardsons signed the guarantee agreements.

Even so, outside of the guarantees, the Richardsons clearly had a different relationship with Russell and with the business than Uhlmann did. Uhlmann and Russell had a long-standing friendship and had worked together on past business ventures, and Uhlmann was a part owner of Walker U-Stor. No formal agreement gave the Richardsons either an ownership interest or any other right to share in business profits.

Whether the Richardsons would have shared in business profits was never tested in practice. When Russell died in February 2009, the business was losing money, and the bank attempted to foreclose [4]*4the loan. Uhlmann took over effective ownership and control of the business when Russell died; with the help of Carol Russell, Uhlmann sold Walker U-Stor s property for $2 million. Uhlmann agreed not to seek any payment from Carol Russell on her guarantee. After turning proceeds of the property sale over to the bank, a deficiency of $962,547.46 remained, and Uhlmann paid it. He then brought suit against the Richardsons for their share.

Two other sums were part of Uhlmann’s claims in the lawsuit.

First, Walker U-Stor took out an additional $200,000 loan from the bank in 2006, and Uhlmann signed a new guarantee for that amount. The Richardsons didn’t sign any new documents in 2006, and there’s no evidence they even knew of the additional loan. Their written guarantee covered renewals and substitutes for the original $2.67 million loan, but it didn’t provide a guarantee of additional indebtedness. Still, Uhlmann sought contribution from tire Richardsons for 24% of die entire deficiency to the bank, which included whatever was attributable to the original loan as well as whatever might be attributable to the additional $200,000 loan taken out in 2006.

Second, Uhlmann incurred $18,684.50 in attorney fees in selling die remaining property of Walker U-Stor so that the proceeds could be paid to the bank. Uhlmann also sought to assess 24% of that amount against the Richardsons.

A jury trial was held in September 2010. After the first day of trial, Uhlmann’s counsel said that he would proceed on the equitable-contribution theory, though he also said that unjust enrichment might apply to the request that the Richardsons pay part of the $18,684.50 in attorney fees. Later, after the court had prepared jury instructions to submit the case to the jury under an unjust-enrichment dieoiy, Uhlmann’s counsel said that he was “willing to go forward on our equitable contribution claim,” recognizing that equitable claims are decided by the court, not a jury. But he added that the Richardsons had requested a juiy trial and that the question of whether the Richardsons had signed the guarantee agreement was a jury question.

The district judge then said that the case still would be presented to tire juiy under the unjust-enrichment theory: “Now I’m not go[5]*5ing to make these folks sit through an entire trial because you’re [now] going to decide to sort of lack the [unjust-enrichment] theory loose. . . . [A]t this point, it’s going to them on unjust enrichment.” Uhlmann’s counsel replied, “All right,” and the parties agreed upon an additional question that the jury would answer as to whether the Richardsons had signed a guarantee. The Richardsons objected to submitting the case under an unjust-enrichment theory and to the jury instructions about that legal theory.

The jury found that the Richardsons had signed a guarantee agreement, and the juiy also ruled in favor of Uhlmann on the unjust-enrichment claim. As damages, Uhlmann had sought 24% of the $981,231.96 he had paid (an amount that comprised the total deficiency to the bank, $962,547.46, plus tire attorney fees incurred in selling Walker U-Stor’s property, $18,684.50), or $235,495.67. The jury awarded $182,165 in damages, and the district court entered judgment in that amount. Apparently because recovery on an alternate legal theory was not needed, the court’s journal entry of judgment denied Uhlmann’s claim for equitable contribution.

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Cite This Page — Counsel Stack

Bluebook (online)
287 P.3d 287, 48 Kan. App. 2d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/uhlmann-v-richardson-kanctapp-2012.