Case Title: Wilson v. McMahon

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-05-21T00:00:00Z

Document:
Wilson v. McMahon1992 WY 59831 P.2d 1152Case Number: 91-168Decided: 05/21/1992Supreme Court of Wyoming
Esther WILSON, and Esther 
Wilson as Personal Representative of the Estate of Thomas G. Wilson, 

Appellant 
(Defendant),

v.

Augusta M. McMAHON, 

Appellee 
(Plaintiff).

Appeal from District 
Court, Carbon County, Larry L. Lehman, J.

Mason F. Skiles 
of Skiles & Hageman, Laramie, for appellant.

Kermit C. Brown 
and William L. Hiser of Brown, Erickson & Hiser, Rawlins, for 
appellee.

Before 
URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, 
JJ.

GOLDEN, 
Justice.

[¶1]            
Appellant Esther Wilson appeals from an order of the district court which 
granted to appellee Augusta McMahon a judgment notwithstanding the verdict 
(JNOV) and which conditionally granted a new trial on the issue of damages. The 
underlying dispute concerned entitlement to $150,000 in life insurance proceeds 
which were paid to Augusta McMahon following the death of Esther Wilson's 
husband, Thomas Wilson. Thomas Wilson had assigned the life insurance proceeds 
to Mrs. McMahon to secure a financial obligation which he allegedly owed to her 
under a buy-sell agreement. Following presentation of the evidence, the jury 
returned a general verdict for Esther Wilson. The trial judge granted a JNOV. We 
will reverse the district court and order that the jury verdict be 
reinstated.

ISSUES

[¶2]      Esther Wilson 
frames the issues in this manner:

A. The trial judge erred 
in granting judgment notwithstanding the verdict.

B. The trial judge erred 
in ordering a new trial on damages.

[¶3]            
Augusta McMahon presents a single issue:

The evidence presented at 
trial in this case is such that without weighing the credibility of the 
witnesses, or otherwise considering the weight of the evidence, there can be but 
one conclusion reasonable persons could have reached: that a good and binding 
agreement was entered between Thomas G. Wilson and Augusta McMahon and that the 
same continued in force until his death.

FACTS

[¶4]      Martin McMahon 
owned and operated McMahon Motors, a Chrysler, Dodge, and Plymouth dealership, 
in Rawlins, Wyoming, for a number of years prior to 1969. In 1969, Thomas Wilson 
joined McMahon Motors and became a business partner with Martin McMahon. Mr. 
McMahon and Mr. Wilson established what was akin to a father-son relationship 
and operated a successful business.

[¶5]      In 1979, Mr. 
McMahon and Mr. Wilson purchased an ailing corporation known as Fort Steele. 
Fort Steele consisted of forty acres, a trailer park, and a convenience store. 
It was indebted to Rawlins National Bank in the amount of $300,000. The 
corporation's shareholders pledged their stock to the Rawlins National Bank as 
security for the debt. Fort Steele proved to be an unwise investment. Mr. 
McMahon and Mr. Wilson were forced to skim profits from the partnership to keep 
it afloat.

[¶6]      Mr. McMahon died 
in March of 1983. Mr. Wilson saw to it that Mrs. McMahon was cared for as 
required by the partnership agreement during the months immediately following 
her husband's death. The partnership agreement provided that, in the event of 
death, either partner's surviving widow would receive compensation equal to that 
of the remaining partner. Accordingly, Mrs. McMahon received from McMahon Motors 
$1,000 every two weeks, medical insurance, and a car furnished with license, 
insurance, maintenance, and gas.

[¶7]      Mrs. McMahon, 
individually and in her capacity as executrix of her husband's estate, Mr. 
Wilson, and other interested parties entered into a buy-sell agreement on June 
22, 1984. The buy-sell agreement purported to set the framework whereby Mr. 
Wilson would become the sole owner of McMahon Motors and Fort Steele 
Corporation. The transfer of interests was designed to take place in three 
essential steps. First, the ownership of Fort Steele was to be consolidated into 
the hands of Mrs. McMahon and Mr. Wilson. Second, Mrs. McMahon and Mr. Wilson 
were to transfer the assets of McMahon Motors to Fort Steele in exchange for 
additional stock. Finally, Mr. Wilson was to purchase all of the McMahons' 
issued and outstanding stock in Fort Steele. As consideration for the stock, Mr. 
Wilson and Mrs. McMahon agreed upon a purchase price of $151,227.58, together 
with twelve percent interest, payable at the rate of $1,000 bi-monthly for a 
period of ten years. Mr. Wilson also agreed to continue to provide Mrs. McMahon 
with medical insurance, a car, and related amenities for a ten-year period. The 
agreement required that Mr. Wilson secure his obligation to Mrs. McMahon with 
life insurance.1

[¶8]      In the years 
following the execution of the agreement, business was not good. Mr. Wilson was 
able to honor his obligation to Mrs. McMahon, but was unable to service the 
other debts that had accumulated. Too proud to file bankruptcy, Mr. Wilson 
became depressed and ended his life on June 6, 1989.

[¶9]            
Following Mr. Wilson's death, Mrs. McMahon received $150,000 from his 
life insurance company pursuant to an assignment of insurance form which Mr. 
Wilson had executed on her behalf in August of 1984. Mrs. McMahon then initiated 
a declaratory judgment action against Mrs. Wilson, the named beneficiary under 
the policy, to determine their respective rights to the insurance proceeds. The 
buy-sell agreement provided that the life insurance proceeds were intended to 
cover the balance of the purchase price remaining due as of the date of Mr. 
Wilson's death. Mrs. McMahon also filed a claim against the estate of Mr. Wilson 
to satisfy any obligation that he might owe to her under the buy-sell agreement. 
The district court consolidated the actions for trial before a 
jury.

[¶10]            
Following presentation of the evidence, Mrs. McMahon moved for a directed 
verdict. The district court denied the motion and allowed the case to go to the 
jury. The jury subsequently returned the following verdict, which, although 
somewhat unusual in form, is general in nature:

1. Do you find that 
Thomas G. Wilson owed Augusta M. McMahon any money or any other thing of value 
at the time of his death (June 6, 1989)?

Yes ____ No 
X

(If the answer is "yes," 
proceed to question 2. If your answer is "no," your work is complete, and the 
effect will result in the $150,000.00 life insurance proceeds together with 
interest accrued thereon being paid to Esther Wilson from Augusta M. 
McMahon.)

2. What amount of money 
is Augusta M. McMahon entitled to?

$ 
____

[¶11]  Mrs. McMahon timely filed a motion 
seeking a JNOV or, in the alternative, a new trial. The district court granted 
the JNOV and conditionally ordered a new trial on the issue of damages. This 
appeal followed.

STANDARD OF 
REVIEW

[¶12]   This court recently stated the 
applicable JNOV standard of review:

     When this appellate 
court is faced with a JNOV question, we undertake a full review of the record 
without deference to the views of the trial court. Cody v. Atkins, 658 P.2d 59, 
61-62 (Wyo. 1983). In determining whether a JNOV motion should be granted, we 
consider "whether the evidence is such that without weighing the credibility of 
the witnesses, or otherwise considering the weight of the evidence there can be 
but one conclusion reasonable persons could have reached * * *." Erickson v. 
Magill, 713 P.2d 1182, 1186 (Wyo. 1986). In our review we consider the evidence 
favorable to the nonmoving party, giving it all reasonable inferences. Carey v. 
Jackson, 603 P.2d 868, 877 (Wyo. 1979). A court should cautiously and sparingly 
grant JNOV motions. Erickson, 713 P.2d  at 1186.

Inter-Mountain 
Threading v. Baker Hughes, 812 P.2d 555, 558-59 (Wyo. 
1991).

DISCUSSION

[¶13]   In his opinion letter, the trial 
judge stated that the only inference that could be drawn from the jury's verdict 
was that the jury had found that no buy-sell agreement existed between Mrs. 
McMahon and Mr. Wilson. The trial judge determined that, even when viewing the 
evidence in the light most favorable to Mrs. Wilson, there was insufficient 
evidence to sustain the jury's verdict that an agreement did not exist. The 
trial judge accordingly ordered that the judgment entered on the jury verdict be 
set aside, that judgment be entered for Mrs. McMahon, and that a new trial be 
conditionally granted on the issue of damages. We disagree with the action 
undertaken by the trial judge.

[¶14]   The JNOV granted by the district 
court is founded upon the erroneous premise that the only inference that 
can be drawn from the jury's verdict is that it determined that no agreement 
existed. Quite to the contrary, our review of the record indicates that numerous 
inferences might be drawn from the jury's verdict which, if supported by 
substantial evidence, would sustain the determination reflected thereon. The 
jury was instructed that Mrs. McMahon bore the burden of proving: (1) that the 
buy-sell agreement existed; (2) that she had substantially performed her 
obligations under the agreement; (3) that Mr. Wilson had breached the agreement; 
and (4) that she had suffered damages in a determinable amount. The jury was 
further instructed relating to the affirmative defenses raised by Mrs. Wilson. 
Those defenses included: (1) that, if a contract existed, it was abandoned by 
the parties; (2) that, if a contract existed, the parties' mutual mistake 
regarding the terms and conditions of the contract warrants its cancellation; 
(3) that, if a contract existed, Mr. Wilson's performance was excused because he 
made the election to declare the contract null and void; and (4) that, if a 
contract existed, Mrs. McMahon's breach of that contract excused Mr. Wilson's 
performance.

[¶15]   This court has stated that, when 
reviewing a general verdict, we will "assume every finding was made which was 
necessary to sustain the verdict * * * provided only there was substantial 
evidence which would justify such finding." Berta v. Ford, 469 P.2d 12, 15 (Wyo. 
1970) (quoting Calwell v. Anderson, 438 P.2d 448, 452 (Wyo. 1968)). In light of 
the instructions which were given to the jury in this case, its verdict could be 
sustained upon a finding that Mrs. McMahon failed to carry her burden of proof 
and/or that one or more of the affirmative defenses applied under the 
circumstances of the case. Our task, then, is to review the record and determine 
whether sufficient evidence exists to support either 
finding.

[¶16]   Mrs. McMahon was required first to 
demonstrate that she and Mr. Wilson had at least initially entered into a 
buy-sell agreement. There can be little argument but that Mrs. McMahon carried 
her burden of proof in this regard. The actual written agreement, executed by 
the parties, was introduced at trial. Evidence was also admitted at trial which 
documented the actions taken in furtherance of the agreement. Moreover, 
virtually every witness at trial acknowledged an awareness that a buy-sell 
agreement had at least at one time existed between Mrs. McMahon and Mr. 
Wilson.

[¶17]   Mrs. McMahon was next required to 
prove that she had substantially performed her duties under the agreement. 
Countering Mrs. McMahon's burden of proof in this regard, Mrs. Wilson raised the 
affirmative defense that Mrs. McMahon had breached the agreement, thereby 
excusing Mr. Wilson's performance. The trial judge instructed the jury on these 
matters as follows:

     The plaintiff contends 
in this case that she has substantially performed the contract. Substantial 
performance exists where there has been no willful departure from the terms of a 
contract and no omission in essential points. Substantial performance means that 
the contract has been honestly and faithfully performed in its material and 
substantial parts, and the only variance from the strict and literal performance 
of the contract consists of technical or minor omissions or defect. If you find 
that the plaintiff has substantially performed all that is required of her, then 
she did not breach the contract.

[¶18]   The buy-sell agreement contemplated 
that Mr. Wilson would eventually own 100 percent of Fort Steele Corporation, 
which would include McMahon Motors. To this end, the agreement required that 
Mrs. McMahon obtain approval of the sale from the probate court; that she 
undertake efforts to obtain approval of the sale from Chrysler; that she 
transfer the McMahon interest in McMahon Motors to Fort Steele; that, after 
receiving the additional Fort Steele stock, she sign the certificates in blank 
and escrow them with the Rawlins National bank; that she execute appropriate 
escrow instructions; that she undertake efforts to place Rawlins National Bank 
in first secured lender position as to all of Fort Steele's assets; and that she 
resign as an officer and director of Fort Steele.

[¶19]   The evidence at trial demonstrated 
that Mrs. McMahon did obtain court approval for the sale; that she did undertake 
efforts to obtain Chrysler approval; and that she did transfer the McMahon 
interest in McMahon Motors to Fort Steele. However, the evidence, or lack 
thereof, also demonstrated that McMahon did not sign the stock certificates in 
blank and escrow them with the Rawlins National Bank; that she did not execute 
escrow instructions; that she had failed to take efforts to place Rawlins 
National Bank in first secured position as to all of Fort Steele's assets; and 
that she had failed to formally resign as corporate 
secretary.

[¶20]   As of the date of trial, Fort 
Steele ownership was represented by stock certificates issued to Martin McMahon 
(thirty-three shares), Harold Wilson (thirty-three shares), Thomas Wilson 
(thirty-three shares), Jane Collier (one share), Augusta McMahon (thirty-two 
shares), and Thomas Wilson (thirty-two shares). The agreement had contemplated 
the consolidation of Fort Steele ownership into the hands of Mrs. McMahon and 
Mr. Wilson. They were each to own fifty percent of the corporation, represented 
by sixty-five shares of stock. Mr. Wilson's agreement was to purchase the 
McMahons' sixty-five shares. The transaction obviously did not ripen as planned. 
When asked at trial by her own counsel if she would be willing to execute the 
documents necessary to complete the transaction, Mrs. McMahon's testimony was 
equivocal: 

Q Do you still think 
today there's an agreement where you sold the business and Tommy Wilson bought 
the business?

A Well, 
yes.

Q And if there were 
documents that weren't signed at the time that the agreement was closed, would 
you sign those today, if they were presented to you, to close the deal and to 
make the agreement as the written agreement says it was to 
be?

A Well, I don't know if I 
would now because what I know now. But before I didn't know that they existed. 
So I don't know what I'd do now.

Q But if there were 
escrow instructions in the agreement and the agreement said you're supposed to 
get an escrow, would you do that today?

A I really don't know. I 
haven't -

Q If the agreement said 
you're supposed to endorse your stock certificates and you never did that 
because nobody ever did it, would you do that today?

A I suppose I would. I 
don't know.

Q Wouldn't you do 
whatever you had to do that the agreement required?

A 
Yes.

[¶21]            
Applying our oft-cited standard of review for sufficiency of the 
evidence, we hold that there was substantial evidence presented at trial from 
which the jury might have concluded, within the bounds of reason, that Mrs. 
McMahon had failed, or was unwilling, to substantially perform her end of the 
bargain. See Medlock v. Merrick, 786 P.2d 881, 883 (Wyo. 1990). Such being the 
case, the jury verdict for Mrs. Wilson must stand. The district court's order 
which granted to Mrs. McMahon a JNOV and which conditionally granted a new trial 
on damages is reversed.

[¶22]   Having disposed of the case as 
above-stated, we need not consider whether Mrs. McMahon had adequately proved 
the other elements of her cause of action - breach and damages. Nor is it 
necessary to review all the evidence as it relates to Mrs. Wilson's affirmative 
defenses to determine if they too were supported by sufficient evidence. Suffice 
it to say that a great deal of inconsistent evidence was presented at trial 
concerning the parties' actions, omissions, intentions, representations, 
etcetera, as they related to the buy-sell agreement. A significant portion of 
this evidence was directed at proving Mrs. Wilson's affirmative defenses of 
abandonment, mutual mistake, and election to cancel. It was that province of the 
jury to sort and weigh the evidence, to judge the credibility of the witnesses, 
and to come to a conclusion. E.g., Medlock, 786 P.2d  at 883-84. That is what the 
jury did. We find no reason in this case to disturb the jury's 
work.

DISPOSITION

[¶23]   The order of the district court 
granting the JNOV and conditionally granting a new trial is reversed, with 
directions that the jury verdict be reinstated and that judgment be entered in 
accordance therewith.

CARDINE, Justice, dissenting, 
with whom URBIGKIT, C.J., joins.

[¶24]   The question here presented is 
which of two widows should suffer the detriment of a depressed economy causing 
loss of business, loss of value of assets, and eventual bankruptcy. Resolution 
of the question should not involve the natural sympathy a jury might have for 
one who most recently and tragically lost her husband or who might be in the 
greatest financial need. Rather, the question should be resolved by application 
of law, giving effect to and enforcing the solemn written agreements of the 
parties as the parties themselves recognized and acted in accordance with their 
provisions during their lifetime. I would hold that neither widow gets 
all.

[¶25]   The husbands of appellant Wilson 
and appellee McMahon entered into a business partnership for the operation of a 
car dealership in 1969. Mr. McMahon died during March 1983. The partnership 
agreement required Wilson to pay appellee, Mrs. McMahon, $1,000 every two weeks 
plus furnish medical insurance, a car, license, auto insurance, maintenance, and 
gas. On June 22, 1984, the parties made a written agreement by which Wilson 
purchased appellee's entire interest in the business for $151,227.58, to be paid 
$1,000 twice monthly plus medical insurance, a car, license, auto insurance, 
maintenance, and fuel. This was essentially what Mr. Wilson was required to pay 
under the partnership agreement. The net effect was that he was purchasing the 
business without incurring an additional obligation. During the ensuing five 
years, the parties treated the agreement as in force and effect. Mr. Wilson paid 
appellee according to the terms of the agreement. He made no objections or 
demands of any kind.

[¶26]   The debt to appellee for the sale 
of her partnership interest was secured by purchase of a $150,000 insurance 
policy which is the subject of this litigation. The trial to determine who 
should receive what from the $150,000 insurance payment following Mr. Wilson's 
death was to a jury. The jury returned a verdict in favor of appellant Mrs. 
Wilson, finding that nothing was owed Mrs. McMahon and effectively awarding the 
entire $150,000 proceeds from insurance to Mrs. Wilson. The trial court granted 
a judgment notwithstanding the verdict and ordered a new trial on the question 
of damages. Were we to affirm, the effect of that trial court's decision would 
be to award to Mrs. McMahon the amount still owed to her and award the balance 
to Mrs. Wilson.

[¶27]            
Judgment notwithstanding the verdict was entered pursuant to W.R.C.P. 
50(b) which provides in pertinent part:

If a verdict was returned 
the court may allow the judgment to stand or may reopen the judgment and either 
order a new trial or direct the entry of judgment as if the requested verdict 
had been directed.

When the 
evidence is wholly insufficient to support a verdict, it is the duty of the 
trial court to direct a verdict or enter a JNOV, thus promoting judicial 
economy. Erickson v. Magill, 713 P.2d 1182, 1186 (Wyo. 1986); Cody v. Atkins, 
658 P.2d 59, 63-64 (1983). In determining whether a JNOV is proper, we apply the 
same test on appeal as does the trial judge in considering the motions 
originally, i.e., whether the evidence is such that without weighing the 
credibility of the witnesses, or otherwise considering the weight of the 
evidence, there can be but one conclusion reasonable persons could have reached. 
Carey v. Jackson, 603 P.2d 868, 877 (Wyo. 1979).

[¶28]   In this case, the undisputed 
evidence establishes the parties made an agreement to sell and to buy Mrs. 
McMahon's interest in the automobile and business partnership. They treated the 
agreement as a complete, enforceable obligation and performed under the 
agreement for five years. That some minor details were left to be completed did 
not concern the parties - probably for two reasons: First, there was no question 
that the minor details left would be performed upon simple request. However no 
such request or demand was ever made. Second, when the economy turned sour, 
business and profits were down, the business was unable to meet its obligations, 
and performance of housekeeping details was not a very significant or necessary 
concern.

[¶29]   The majority opinion cites 
question-and-answer testimony of appellee McMahon as evidence of an 
unwillingness to perform her obligations under the agreement. At best, the 
testimony is equivocal. In truth, it demonstrates lack of understanding of its 
legal ramifications by a lay person. In fact we know that had there been a 
demand for performance, Mrs. McMahon would have complied: First, because it was 
in her best interest to do so, and second, because, being required to perform as 
a matter of law, she would have had no other choice. The effect of the majority 
decision here is an all-or-nothing result, i.e., one party gets all, the other 
party gets nothing. That is unfair, is not justice, and thus the reason for my 
dissent.

[¶30]   The trial judge here had the 
benefit of sitting through several days of trial, watching live witnesses 
testify, observing their demeanor on the witness stand, and being involved in 
the dynamics of the trial. The trial court can better assess whether a verdict 
is the result of emotion, sorrow, and sympathy for a widow who, with her 
husband, suffered through the depression of a failing business and ultimate 
suicide. The trial court concluded that neither appellant nor appellee should 
receive the entire $150,000 insurance policy but that appellee should receive 
what was due and unpaid, appellant should receive the balance left after 
payment. Thus the order for new trial on damages. I agree with the trial court's 
disposition and would affirm.

FOOTNOTES

1 The 
agreement contained numerous other provisions relating to the consummation of 
the sale. Many of the requirements were disregarded by the parties and will be 
addressed as they become relevant in the succeeding 
discussion.