United Crude Marketing & Transportation Co. v. Robert Gordon Oil Co.

1992 OK CIV APP 59, 831 P.2d 659, 63 O.B.A.J. 1855, 17 U.C.C. Rep. Serv. 2d (West) 1172, 1992 Okla. Civ. App. LEXIS 32, 1992 WL 139574
CourtCourt of Civil Appeals of Oklahoma
DecidedMay 12, 1992
DocketNo. 76936
StatusPublished

This text of 1992 OK CIV APP 59 (United Crude Marketing & Transportation Co. v. Robert Gordon Oil Co.) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Crude Marketing & Transportation Co. v. Robert Gordon Oil Co., 1992 OK CIV APP 59, 831 P.2d 659, 63 O.B.A.J. 1855, 17 U.C.C. Rep. Serv. 2d (West) 1172, 1992 Okla. Civ. App. LEXIS 32, 1992 WL 139574 (Okla. Ct. App. 1992).

Opinion

OPINION

HUNTER, Judge:

Appellant, Gordon, appeals from the trial court’s order granting summary judgment to Appellee, United, in the principal amount of $128,005.25, plus interest and attorney fees.

In 1982, United agreed to buy crude oil from certain leases Gordon operated in Lincoln County, Oklahoma. As a result of its own miscalculations, United overpaid Gordon $128,005.25 for oil in July, August, and September, 1982. Gordon admitted receipt of the overpayments, but alleged that it paid over to the other leasehold interest owners all but $42,164.15 of the money. Gordon did not learn that United had overpaid it until November, 1985, when United told it of the overpayment.1

[660]*660Gordon defended on the theory that it had detrimentally relied on United. Gordon paid out the money to others because it thought it was bound by law and contract to do so. Gordon also claimed the three year statute of limitations, 12 O.S.1991 § 95 Second, barred the action.2 Gordon also asserted that the District Court of Tulsa County lacked jurisdiction because venue of United’s action was in Lincoln County.

United claims that Gordon could not rely on the deposition of its President, Robert Gordon. United contends that Gordon did not meet the requirements of Rule 13, Rules for District Courts,3 because it did not attach the pages of Robert Gordon’s deposition to its response to United’s motion for summary judgmént.4

United also contends that the five year statute of limitations governing actions for breach of any contract of sale under the Uniform Commercial Code, 12A O.S.1991 § 2-725, applies to this action.5 United asserts too that venue for its action properly lay in Tulsa County.

ISSUES

I.Did the trial court err in holding that Gordon did not establish an issue of fact on its defense of detrimental reliance?

II. Did the trial court correctly hold that the five year statute of limitations under 12A O.S.1991 § 2-725 applies to this action?

III. Did the trial court correctly hold that venue of the action lay in Tulsa County?

We answer yes to all three questions.

I.

The record before the trial court established that Gordon paid out all but $42,165.15 of the amount United mistakenly paid it to other owners of the leasehold who Gordon believed were entitled to the money by law and contract.

The question of when one who pays by mistake is entitled to restitution from the one to whom he made the mistaken payment is comprehensively discussed in the ALR Annotation, What constitutes change of position by payee so as to preclude recovery of payment made under mistake, 40 ALR2d 993 (1951).

United’s action depends for its success on proving that if Gordon is not required to repay the money it mistakenly paid Gordon, Gordon will be unjustly enriched. It was United’s mistake that caused the overpayment. Gordon’s obligation to correct United’s own error is limited to having to repay to United amounts which if not repaid would unjustly enrich Gordon. ALR Annotation, Id.

[661]*661Some cases have held that if the defendant shows only that he paid over the sum he received from plaintiff to a third party who would have been lawfully entitled to it had the payment been proper, defendant is relieved of liability from plaintiff for repayment of the money defendant paid to the third party. See, Sawyer v. Mid-Continent Petroleum Corp., 236 F.2d 518 (10th Cir.1956); and ALR Annotation, Id., Later Case Service, 1992, Supplementing Vol. 40-41 ALR 2d. The annotator in the ALR Annotation states the rule:

The defense of change of position is peculiarly applicable where the payee had a duty, imposed by law or by a collateral agreement, to pay over to a third party all or part of the funds which he was entitled to receive and, after receiving a payment made by mistake but assuming that it was properly paid to him, he performed what he thought was his duty by turning over all or part of the receipts to such third party. [Emphasis supplied.]

Id. 40 ALR2d at 1006.

In Haubert v. Navajo Refining Co., 129 Okl. 195, 264 P. 151 (1928), the Supreme Court recognized the rule. Haubert might be interpreted to hold that the payee of monies improperly paid to it is insulated from liability to the payor where payee proves he paid over the funds to third parties because of a supposed duty. Were we to so hold here, Gordon would be entitled to judgment in his favor for all but the $42,164.15 he retained. Our analysis of the cases collected in the ALR Annotation, Id., convinces us that the Supreme Court did not intend to go so far.

In Raccuglia v. Paine Weber, Inc., 180 Ga.App. 570, 349 S.E.2d 803 (1986), the Georgia Court of Appeals reversed the trial court’s order granting summary judgment for a brokerage company. In Raccuglia, plaintiff broker mistakenly paid defendant investor on a brokerage account in investor’s name. Investor’s affidavit showed that the investor opened the account solely for the use of another person, and paid out the funds mistakenly paid to him according to the directions of the other person. The court held that, based on the investor’s affidavit, it could not say as a matter of law that investor could not show prejudice that would diminish the broker’s recovery.

We agree with the Georgia court’s analysis in Raccuglia. The question of what efforts Gordon made to recover the funds from the third parties is for the trier of fact. We hold that Gordon sufficiently established its defense of detrimental reliance to avoid summary judgment. Gordon proved it paid the money it got from United to the other leasehold owners because it believed it was obliged to do so. This established that a fact issue existed concerning Gordon’s detrimental reliance defense. Gordon did not have to prove what it had done to get the money back to defend against United’s motion for summary judgment. Such proof was for the jury to consider.

We hold that the undisputed affidavit of Gordon’s employee, Connie Shields, satisfied the requirements of Rule 13 and created a factual issue as to Gordon’s detrimental reliance defense and whether Gordon would be prejudiced by having to repay to United monies it paid to others. We do not reach the issue of whether the trial court properly refused to consider the deposition testimony of Robert Gordon under Rule 13, Id. Under the record before us, whether Gordon was entitled to rely on the depositions in resisting United’s motion for summary judgment is moot.

The trial court should have limited United’s summary judgment to the $42,165.14 portion of the overpayment that Gordon admits it kept. Whether Gordon should be required to repay the balance of the money United paid it is a fact issue for a jury.

II.

Whether the three year or five year statute of limitations applies here turns on whether United’s action to recover money accidentally paid to Gordon is an action under its original contract to buy the oil, or is an unrelated action in assumpsit on a contract implied in law.

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1992 OK CIV APP 59, 831 P.2d 659, 63 O.B.A.J. 1855, 17 U.C.C. Rep. Serv. 2d (West) 1172, 1992 Okla. Civ. App. LEXIS 32, 1992 WL 139574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-crude-marketing-transportation-co-v-robert-gordon-oil-co-oklacivapp-1992.