Case Title: Chewning v. Palmer

Citation: 133 Ariz. 136, 650 P.2d 438

Docket Number: 

State: arizona

Court: Arizona Supreme Court

Date: 1982-06-28T00:00:00Z

Document:
133 Ariz. 136 (1982) 650 P.2d 438 Wallace D. CHEWNING, Plaintiff-Appellee-Cross Appellant, v. E. Payne PALMER, III, Defendant-Appellant-Cross Appellee. No. 15834. Supreme Court of Arizona, In Division. June 28, 1982. Ryley, Carlock & Ralston by Stephen R. Kaufmann, A. Daniel Sheffield, Jr., Phoenix, for plaintiff-appellee-cross appellant. Jennings, Strouss & Salmon by Riney B. Salmon II, Neil Vincent Wake, Phoenix, for defendant-appellant-cross appellee. CAMERON, Justice. This is an appeal from the granting of a motion for summary judgment in favor of plaintiff Wallace D. Chewning against E. Payne Palmer III, the alleged guarantor of a $10,000 corporate debenture. We have jurisdiction pursuant to Rule 19(e), Arizona Rules of Civil Appellate Procedure, 17A A.R.S. We need answer only one question on appeal and that is: Was there a genuine issue of material fact whether Chewning forbore suit in reliance upon the promise of Palmer to pay the amount due on the debenture? The facts necessary for a determination of this issue are as follows. In 1971, Chewning purchased a $10,000 eight percent subordinated convertible debenture of Gemini Guild, Inc., an Arizona corporation. Chewning made this investment upon the advice of his then son-in-law, Palmer. The annual $800 interest payments were made for three years. When the debenture was not redeemed on the date of maturity on 30 June 1974, Chewning inquired of Palmer why the principal of his investment had not been repaid. Later, Palmer wrote the following letter to Chewning: Chewning had not solicited the letter and he did not respond after its receipt. Despite Palmer's divorce from Chewning's daughter in 1976, Palmer continued in his attempt to assist his former father-in-law to recover the principal of his debenture. Eventually, it became apparent that Gemini Guild was insolvent and unable to repay its creditors. In 1979, Chewning filed a complaint against Palmer as guarantor of Gemini's unsatisfied obligation. After filing of suit, Chewning's deposition was taken and he testified as follows: Later Chewning moved for summary judgment. Chewning's affidavit in support of the motion for summary judgment stated: Summary judgment against Palmer was entered in the amount of $14,688.20 in principal and accrued interest, plus costs and $300 in attorney's fees. From this judgment, Palmer appeals, and Chewning cross-appeals the reasonableness of the attorney's fees awarded. PROMISSORY ESTOPPEL Palmer's promise to repay Chewning's investment is not enforceable at law for the lack of a bargained-for-exchange. See J.H. Queal & Co. v. Peterson, 138 Iowa 514, 116 N.W. 593 (1908); Annot., 74 A.L.R. 293 (1931). Chewning must then rely on his equitable remedy under the theory of promissory estoppel. This court has accepted the definition of promissory estoppel as it appears in section 90 of the Restatement of the Law of Contracts. Weiner v. Romley, 94 Ariz. 40, 381 P.2d 581 (1963); Waugh v. Lennard, 69 Ariz. 214, 211 P.2d 806 (1949). To avail himself of this provision of the Restatement, Chewning must show that he refrained or forbore his right to sue on the debenture in reliance upon Palmer's promise to repay Chewning's "total investment plus interest." The precise issue in dispute is whether Chewning forbore proceeding against Gemini Guild in reliance on the promise of his former son-in-law that he would assume the obligation of repaying the investment if Gemini Guild did not. Chewning's intentions in this regard are not clear. Chewning neither solicited Palmer's promise, nor responded when it was made. Chewning's testimony in his deposition does not indicate that he relied upon Palmer's promise to pay. In an appeal from the granting of a motion for summary judgment, the evidence, as well as all inferences reasonably drawn therefrom, will be viewed in the light most favorable to the parties against whom summary judgment was granted. Antwerp Diamond Exchange of America, Inc. v. Better Business Bureau of Maricopa County, 130 Ariz. 523, 637 P.2d 733 (1981); Boyle v. City of Phoenix, 115 Ariz. 106, 563 P.2d 905 (1977). For summary judgment to have been properly granted in this case, there must be no genuine issues of material fact. Antwerp Diamond Exchange of America, Inc., supra; Rule 56, Arizona Rules of Civil Procedure, 16 A.R.S. We believe that there are sufficient issues of material fact left to be resolved in this case, and it was error to grant Chewning's motion for summary judgment. We note that the Court of Appeals case of Glitsos v. Kadish, 4 Ariz. App. 134, 418 P.2d 129 (1966) is cited in support of the granting of the motion for summary judgment. Glitsos, supra, can be distinguished from the instant case in that in Glitsos, it was stipulated by the parties that there was reliance and forbearance upon the promise to pay. There is no such agreement as to the facts in the instant case. As to the matter of attorney's fees, we need not consider that issue at this time as that can be determined on remand. Reversed and remanded with instructions for further proceedings consistent with this opinion. HAYS and FELDMAN, JJ., concur.