No. 86-91
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
MAYER BROS., a Washington
Corporation,
Plaintiff and Respondent,
DANIEL RICHARD JEWELERS, INC.,
DANIEL McCLOY and RICHARD EMBRY,
Defendants and Appellants.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Morrow, Sedivy & Bennett; Edmund P. Sedivy, Jr.,
Bozeman, Montana
For Respondent:
Moore, Rice, OIConnell & Refling; Christopher L.
Manos, Bozeman, Montana
Submitted on Briefs: August 21, 1986
Decided: October 9, 1986
fib
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Defendants appeal the summary judgment against them
granted in the District Court, Eighteenth Judicial District,
Gallatin County. Defendants contend a genuine issue of
material fact exists regarding the personal liability of the
defendants for debts incurred on behalf of the corporation,
Daniel Richard Jewelers, Inc.
On March 10, 1982, Dan McCloy and Dick Embry filled out
a commercial credit application for the purpose of obtaining
merchandise from Mayer Bros., a wholesale jewelers. The
merchandise was to be on account for Daniel Richard Jewelers,
which defendants indicated was owned as a corporation. At
the bottom of the one-page typewritten application was the
following paragraph:
If credit is granted, the undersigned agrees to pay
for all merchandise purchased. I the applicant is
f
-
now- later becomes a corporation, the undersignz
or
agrees - - personaily liable for payment - -
to be of all
purchases. (Emphasis supplied. )
Defendants placed their signature below this paragraph.
On January 1, 1984, defendants executed four promissory
notes, two for $11,500 and two for $15,000. The notes were
signed "Daniel Richard Jewelers of Helena" or "Daniel Richard
Jewelers, Inc." and were also signed by McCloy and Embry
personally, without language showing they were signing as
officers or agents of the corporation. A total of three
payments have been made on the various notes, leaving a
balance of $9,700.38, $10,605.78 and $30,000 owing. In May,
1984, Mayer Bros. filed a complaint against defendants for
default on various payments due. In July, 1984, Mayer Bros.
filed an amended complaint adding a count alleging defendants
owed Mayer Bros. $30,000 on an open account. In response to
Mayer Bros.' request for admissions, defendants admitted
corporate liability on the notes, but denied personal
liability.
Mayer Bros. moved for a summary judgment on the
pleadings, pursuant to Rule 56 of M.R.Civ.P., which was
granted in June, 1985. The District Court found there was no
genuine issue of material fact and ordered defendants to pay
the amounts due. With respect to the personal liability of
defendants McCloy and Ernbry, the court found each personally
liable since each admitted signing the commercial credit
application which provided for personal liability on payment
for all purchases.
In reviewing an order for summary judgment, the standard
of review for the appellate court is the same as that used by
the trial court under Rule 56, M.R.Civ.P. Kronen v. Richter
(Mont. 1984), 683 P.2d 1315, 1317, 41 St.Rep. 1312, 1314.
Thus, we may find summary judgment proper when "the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a
matter of law." Rule 56 (c), M.R.Civ.P.
The initial burden is on Mayer Bros., as the moving
party, to establish that the evidence raises no genuine
issue of material fact. Morales v. Tuomi (Mont. 19851, 693
P.2d 532, 535, 42 St.Rep. 60, 62. In this instance, Mayer
Bros. has alleged in its complaint and amended complaint that
defendants breached their agreement to complete payment as
schedul-ed on their promissory notes. Mayer Bros. attached
copies of the commercial credit
application agreement and the promissory notes to the
complaints. The credit application clearly stated that
defendants would be personally liable for merchandise
purchased on behalf of the corporation. Thus the record
reflects defendants, both personally and as a corporation,
agreed to pay for the merchandise and assume the debts of the
corporation.
Once the record discloses no genuine issue of material
fact, the burden of proof shifts to the party opposing the
motion for summary judgment to show by present facts of a
substantial nature that a material fact issue does exist.
Farmers Ins. Exchange v. Christenson (Mont. 1985) , 697 P. 2d
460, 462, 42 St.Rep. 337, 339; National Gypsum Co. v. Johnson
(1979), 182 Mont. 209, 212, 595 P.2d 1188, 1189. Mere
conclusory or speculative statements are insufficient to
raise a genuine issue of material fact. National Gypsum -
Co.
at 212, 595 P.2d at 1189. The opposing party "may not rest
upon the mere allegations or denials of his pleading, but his
response, by affidavits or as otherwise provided in this
rule, - -
must set forth specific facts showing there - -
is a
genuine issue for trial. " (Emphasis added.) Rule 56 (el ,
With this standard in mind, we turn to the record.
There are two instances in the record where defendants
address the issue of their personal liability. The first
instance is the following exchange in the Requests for
Admission:
Admission No. 6: Admit that Exhibit 'A' provides
that 'if the applicant is now or later becomes a
corporation, the undersigned agree to be personally
liable for payment of all purchases.'
Response to Admission No. 6: Denied.
The second instance is in defendants' brief in
opposition to the motion for summary judgment. Defendants
state:
[Tlhere are issues of fact remaining for
determination by this Court, including:
(1) Are Richard Embry and Daniel McCloy
individually responsible and liable for the two
Promissory Notes executed in favor of the Plaintiff
by Daniel Richards Jewelers, Inc.;
(2) Are Richard Embry and Daniel McCloy
individually liable for either of the two
Promissory Notes executed in favor of the Plaintiff
Daniel Richard Jewelers of Helena;
(3) Is Daniel Richard Jewelers, Inc., liable for
either of the Promissory Notes executed in favor of
the Plaintiff by Daniel Richard Jewelers of Helena.
Defendants' brief goes on to argue that the admission of
corporate liability does not establish "Richard Embry's
personal liability ... [or] . . . Daniel McCloy's liability
with respect to the Promissory Notes executed by Daniel
Richard Jewelers, Inc. or Daniel Richard Jewelers of
Helena.. . ." This is the extent of defendants' evidence of
a material, factual issue for trial. Defendants offer no
affidavits or testimony in support of their argument for no
personal liability. In their brief on appeal, defendants
argue that if the case is remanded for trial, they will
testify that their intent at the time of signing the credit
application was to be liable in a corporate capacity only.
However, defendants present no evidence of a contrary intent
except for this conclusory statement in their brief.
We have recently held that a party opposing a motion for
summary judgment may not rest upon the mere allegations of
the pleadings, but has an affirmative duty to respond by
affidavits or sworn testimony with specific facts that show
there is a genuine issue of fact for trial. B.M. By Berger
v. State (Mont. 1985), 698 P.2d 399, 401, 42 St.Rep. 272,
274-75; Rule 56(e), J9.R.Civ.P. Without such specific factual
evidence, we are unable to determine that any real factual
controversy exists. Accordingly, we find the record
indicates Mayer Bros. is owed the accrued sums plus interest,
and defendants Ernbry and McCloy are liable on the debts in
their personal capacities.
The judgment of the District Court is affirmed.
Justice
We Concur: