Williams v. Waugh

593 P.2d 583, 1979 Wyo. LEXIS 400
CourtWyoming Supreme Court
DecidedApril 18, 1979
DocketNo. 4998
StatusPublished
Cited by3 cases

This text of 593 P.2d 583 (Williams v. Waugh) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williams v. Waugh, 593 P.2d 583, 1979 Wyo. LEXIS 400 (Wyo. 1979).

Opinions

ROONEY, Justice.

Appellees-plaintiffs brought a foreclosure action against appellant-defendant, and appellant-defendant counterclaimed for damages from alleged breach of provisions of the lease. This is an appeal from an order granting appellees-plaintiffs’ motion for a summary judgment and dismissing appellant-defendant’s counterclaim. Since the summary judgment was predicated on only a portion of the entire agreement between the parties and, therefore, could not have been with full consideration of whether or not a genuine issue existed as to a material fact, and since there exist genuine issues of material facts, the summary judgment was improper, and we will reverse.

On May 16, 1975, the plaintiffs entered into an agreement with the defendant 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. Plaintiffs were sellers and lessors, and defendant and her husband were buyers and lessees. Within the same time frame, defendant 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 defendant and her husband, a promissory note, and an escrow letter. Plaintiffs executed a mortgage release, an assignment of liquor license, an escrow letter, and a bill of sale. The Wyoming Bank and Trust Company was designated escrow agent to hold the basic agreement, the mortgage, the reassignment of the liquor license and the release of mortgage.

Thereafter, defendant and her husband were divorced, and defendant, Nancy Williams, succeeded to the interest of her husband, Don Williams, 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 plaintiffs.

Between December 23, 1976, and October 26, 1977, various third parties secured seven default judgments in justice of the peace or district courts against defendant or against defendant and her husband. During the summer months of 1977, the Internal Revenue Service filed several tax liens, some against defendant 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. After initial payments, the balance of $90,000 (with interest at 7½%) was to be paid in twenty semiannual installments. At the time of alleged defaults, the payments were current and the balance due, with interest, was about $61,000. The lease agreement was for a five-year term for $27,000, payable in monthly installments of $450. There is no controversy concerning the foregoing.

In the complaint, plaintiffs alleged default “under the terms of the Security [585]*585Agreements and the Agreement for the sale of the business” in that defendant: (1) allowed the tax liens to be filed; (2) sold some of the secured property without prior approval of plaintiffs and without remitting proceeds of sale to plaintiffs; and, (3) “committing other acts” prohibited by the basic agreement and the financing statements. Further, the complaint alleged that plaintiffs deemed themselves to be insecure in the prospect of payment by virtue of the filing of the tax liens and that defendant was notified of default and failed to cure the same within thirty days. Defendant denied these allegations in her answer.

In her counterclaim, defendant alleged failure by plaintiffs to repair the roof of the building as required by the lease, and failure to move an exterior sign as needed for street improvement as required by the lease, all to defendant’s damage. The allegations were denied in an answer to the counterclaim.

The trial court found in the summary judgment “that the Plaintiffs are entitled to a judgment foreclosing any and all of Defendant’s right, title and interest in * * EXHIBITS A and B attached to the complaint herein.” A and B are the first and second financing statements. With reference to the counterclaim, the trial court found in the summary judgment “that on the counter-claim of Defendant filed herein the Court finds generally for the Plaintiffs and against the Defendant and Defendant is entitled to nothing hereunder.”1

These findings and the specific reference to exhibits A and B reflect that the court may have based the summary judgment on only part of the contract between the parties. No mention of the basic agreement or lease is made in the summary judgment. The complaint is based on default by defendant of the basic agreement, and it is concerned with the first and second financing statements only insofar as they are supplemental to, and a part of, the basic agreement. The counterclaim is based on the lease.

The basic agreement, the lease and the two security and financing statements (hereinafter entire agreement) are all part of a single transaction. As indicated above, plaintiffs allege in the complaint that the default is under terms “of the Security Agreements and the agreement for the sale of the business” by virtue of allowing the tax liens to have been filed “on the business.” It alleges the selling of some of the secured property “without prior approval of” plaintiffs, and of “committing other acts prohibited under the terms of the Security Agreement and Financing Statement and the agreement for the sale of the business.” The basic agreement was filed with the escrow agent. The two financing statements were not. The escrow papers were released to plaintiffs on the basis of the basic agreement as reflected in the escrow letter of May 16, 1978, by plaintiffs’ letter of December 12, 1977 requesting such release, and in the letter of September 9, 1977 from the bank specifically referring to paragraph 11 of the basic agreement as controlling the default and notice of default. Plaintiffs’ attorney stated in his deposition when testifying relative to the execution of the documents that “the documents are all — is one transaction, and they all refer to each other, Mr. Spratt, and they were all part of this agreement.” 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 [586]*586considered 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.

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Bluebook (online)
593 P.2d 583, 1979 Wyo. LEXIS 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-waugh-wyo-1979.