Title: Western Sur. Co. v. Town of Evansville

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Western Sur. Co. v. Town of Evansville1984 WY 7675 P.2d 258Case Number: 83-136Decided: 01/18/1984WESTERN SURETY CO., APPELLANT (DEFENDANT), BARBARA MOORE, (DEFENDANT),

v.

TOWN OF EVANSVILLE, WYOMING, APPELLEE (PLAINTIFF).

Supreme Court of Wyoming
WESTERN SURETY CO., 
APPELLANT (DEFENDANT), BARBARA MOORE, (DEFENDANT),

v.

TOWN OF 
EVANSVILLE, WYOMING, APPELLEE 
(PLAINTIFF).

Appeal from the District 
Court, NatronaCounty, R.M. Forrister, 
J.

David A. Scott 
of Murane & Bostwick, Casper, for appellant.

Frank R. 
Chapman, Casper, 
for appellee. 

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and 
CARDINE, JJ.

CARDINE, 
Justice.

[¶1.]     The Town of Evansville brought suit 
upon a bond issued by Western Surety Company to recover losses resulting from 
misappropriation of funds by the town treasurer and clerk of the municipal 
court. From a summary judgment granted appellee, Town of Evansville, Western Surety 
brings this appeal.

[¶2.]     The sole issue 
presented for our determination, as stated by appellant, is 
whether:

"[The court] erred in 
granting a summary judgment in favor of the Appellee and against the Appellant, 
the summary judgment being granted on information contained in an affidavit 
submitted by the Appellee and in a written report prepared by the Office of the 
State Examiner of the State of Wyoming concerning certain financial books and 
records of the Appellee."

[¶3.]     We will affirm the 
summary judgment in the amount of $25,000 for losses in each of the five years 
following the fiscal year ending June 1975, and remand for trial appellee's 
claim for the fiscal year commencing June 1974 and ending June 
1975.

[¶4.]     The state examiner 
undertook an audit of the books and accounts of the Town of Evansville for the period 
commencing July 1, 1978 through February 29, 1980. When large deficiencies were 
disclosed in this audit, material from two previous examinations for the periods 
December 1, 1973 through January 31, 1976, and February 1, 1976 through June 30, 
1978, was re-examined and evaluated. As a result of the examinations, the town 
treasurer was charged with misappropriation of funds in the amount of 
$192,906.17 and thereafter pled guilty to a charge of "failure to account at the 
end of office." Section 6-7-306, W.S. 1977. The town treasurer gave bond to the 
Town of Evansville in the amount of $5,000 conditioned 
that she would,

"* * * honestly * * * 
perform all the duties of * * * Treasurer * * * prescribed by law * * * with all 
reasonable skill, diligence, good faith and honesty safely keep and be 
responsible for all funds [received by virtue of the office] and pay over 
without delay * * * all moneys * * * [to her successor] * * 
*."

[¶5.]     Admissions at the 
pretrial conference held in this case, as shown by the pretrial memoranda of the 
parties, were as follows:

"1. That Western Surety 
Company's bond 5530268 was initially issued on August 16, 1974, and executed by 
Barbara A. Moore, as Treasurer of the Town of Evansville, and Western Surety 
Company as surety, in the sum of $5,000.00, that said bond was renewed annually 
until it was cancelled by Western Surety Company as a result of the termination 
by the Town of Evansville of Barbara A. Moore's employment as treasurer of that 
town.

"2. That said bond 
provided coverage for losses up to and including the amount of $5,000.00 on an 
annual basis providing said losses were attributable to Barbara A. Moore in her 
capacity as Treasurer of the Town of Evansville."

Western Surety 
made further admissions in its statement of factual issues as 
follows:

"Defendant Western Surety 
Company does not dispute the amount of the loss claimed by the plaintiff nor 
that the losses are attributable to Barbara Moore. Neither does Western Surety 
Company dispute the findings stated in the offices [sic] of the State Examiner's 
report which is attached to the plaintiff's Complaint as an 
exhibit."

[¶6.]     Appellant, Western 
Surety Company, filed a motion requesting that summary judgment be entered in 
favor of the Town of Evansville in the amount of $15,000 and no more 
than this amount. Appellant took the position that the only losses established 
by the examiner's report were for the years 1978, 1979, and 1980; that losses 
due to misappropriation of funds by the town treasurer exceeded $5,000 in each 
of those years; and that the maximum coverage provided by the bond issued by 
Western Surety Company was $5,000 for each year. In essence, appellant's motion 
was an offer or confession of judgment in the amount of 
$15,000.

[¶7.]     Appellee filed an 
affidavit in opposition to the motion for summary judgment. The affidavit was 
prepared by a certified public accountant employed by appellee. Although the 
affidavit was entitled "in opposition of," it did not "oppose" but sought 
summary judgment in the amount of $30,000 or $15,000 more than the amount 
contended for by appellant. The parties raise no issue concerning timely filing 
of the affidavit, opportunity to respond to it or the propriety of entry of 
summary judgment. The dispute between them concerns only whether the summary 
judgment should be entered in an amount greater than 
$15,000.

[¶8.]     The affidavit prepared 
by appellee's certified public accountant stated the 
following:

"4. That your Affiant has 
reviewed the State Examiner's report dated March 16, 1980 regarding the books 
and records of the Town of Evansville including receipts and deposits for 
January 1, 1975 to February 29, 1980 inclusive.

* * * * * 
*

"6. That the Town of 
Evansville was 
on a June to June fiscal year and that the bond coverage on Barbara Moore began 
in 1974 and continued thereafter from June to June each 
year.

"7. That beginning in 
December of 1975, deposits of currency from the Town of Evansville court fund fell 
drastically and were apparently compensated by monies from the Town's water sink 
fund being placed into the Town's general fund from which funds were used to 
cover the shortages.

* * * * * 
*

"10. That your Affiant 
has reviewed the available bank records of the Town of Evansville for the period 
1975 through 1980 and it appears that there was over $5,000.00 loss in each year 
as a result of the cash deposit shortages and the water sink fund shortages for 
fiscal years 1975, 1976, 1977, 1978, 1979 and 1980."

The court 
entered summary judgment for the maximum loss covered under the bond in each 
year in a total amount of $30,000 in favor of appellee, Town of Evansville. Appellant 
contends the affidavit of the CPA should not have been considered because of its 
conclusory nature; that, in the absence of the affidavit, there was only the 
examiner's report for the court to consider; and that it was insufficient to 
support the entry of summary judgment for the six-year period in the amount of 
$30,000.

[¶9.]     We have before us the 
report of the examiner, the affidavit of appellee's expert, and all other 
material that was before the district court when it considered this motion for 
summary judgment. On review our duty is the same as that of the district court 
in determining whether and to what extent summary judgment should be entered. Dubus v. Dresser Industries, Wyo., 649 P.2d 198 
(1982).

[¶10.]  A party seeking summary judgment has the 
burden of proving that there is no genuine issue of material fact. Any doubt as 
to the existence of such an issue is resolved against the party carrying that 
burden. Underwater Storage, Inc. v. 
United States Rubber Company, 371 F.2d 950 (C.A.D.C. 1966), cert. denied 386 U.S. 911, 87 S. Ct. 859, 17 L. Ed. 2d 784 (1967). Thus,

"* * * The court, upon 
considering a motion for summary judgment is compelled to closely scrutinize the 
moving party's document; whereas, the opposing parties' papers, if any, should 
be treated with some indulgence. * * *" Continental Aircraft Sales v. McDermott 
Brothers Company, 316 F. Supp. 232, 236 (D.C.Pa. 
1970).

[¶11.]  In considering all of the materials 
presented, both in support of and in opposition to the motion for summary 
judgment, we view the record in a light most favorable to the party opposing the 
motion for summary judgment and give to that party the benefit of all favorable 
inferences that might be drawn from those materials. Schepps v. Howe, Wyo., 
665 P.2d 504 (1983); Dubus v. Dresser Industries, supra; Bender v. New Zealand Bank & Trust 
(Bahamas) Ltd., 67 F.R.D. 638 
(D.C.N.Y. 1974).

[¶12.]  Here appellant filed a motion for summary 
judgment, but it was more in the nature of a confession of judgment in the 
amount of $15,000. Appellee filed an affidavit seeking entry of summary judgment 
in the amount of $30,000. To the extent that appellee sought summary judgment in 
an amount greater than $15,000, it was the moving party; and it is the affidavit 
it presented that we closely scrutinize as we view the evidence in a light most 
favorable to appellant.

[¶13.]  Rule 56(e), W.R.C.P.1, requires that affidavits filed in 
summary judgment proceedings "shall set forth such facts as would be admissible 
in evidence," and shall have attached thereto "copies of all papers or parts 
thereof referred to" in the affidavit. Appellee employed a certified public 
accountant as an expert who presented an affidavit that was partly factual but 
mostly contained opinions based upon a review of certain documents and records. 
He concluded that

"* * * deposits of 
currency from the Town of Evansville court fund fell drastically and were apparently compensated by monies from 
the Town's water sink fund * * *," (Emphasis added.)

and 
that

"* * * it appears that there was over $5,000.00 
loss in each year * * *." (Emphasis added.)

No supporting 
documents were attached, nor even identified, nor were facts stated supporting 
the opinions. If deposits of cash were less than usual, how much less were they, 
how often did that occur, and in what amounts?

[¶14.]  Affidavits used in summary judgment 
proceedings must set forth such facts as are admissible in evidence, and that is 
especially true when the affidavit contains significant opinions and conclusions 
that may be critical in the outcome of the case. It matters not that the opinion 
of an expert may be admissible at trial without first revealing the underlying 
facts and basis for that opinion. This is a summary judgment hearing and the 
requirements are different. The fact finder must have the material facts, 
determine whether they are in dispute, and if undisputed, whether judgment 
results as a matter of law. Thus, whether a lesser amount of cash deposits so 
clearly establishes that cash was misappropriated and that summary judgment 
should follow is for the court to decide.

[¶15.]  Opinion testimony must always be 
evaluated by the fact finder who must determine whether to accept it at all; 
and, if so, what weight should be accorded that testimony. 
Thus,

"* * * Expert evidence 
normally will not constitute sufficient support for a motion for summary 
judgment and will be more useful as a means of raising an issue of fact, since 
the weight to be given expert evidence is normally an issue for the trier of 
fact. * * *" Castleberry v. Collierville 
Medical Associates, Inc., 92 F.R.D. 492, 493 (D.C.Tenn. 
1981).

[¶16.]  The rationale for this proposition is 
that,

"First, the trier of fact 
is entitled to weigh the credibility of the witness and to value his testimony 
in light of his demeanor on the stand * * *,"

and

"* * * Second, * * * the 
trier of fact is not bound by expert testimony and may substitute its own 
common-sense judgment for that of the experts. * * *" Webster v. Offshore Food Service, Inc., 
434 F.2d 1191 (5th Cir. 1970), cert. denied 404 U.S. 823, 92 S. Ct. 44, 30 L. Ed. 2d 50 (1971).

[¶17.]  There are some cases in which summary 
judgment may appropriately be entered upon expert opinion testimony. The cases 
generally are those in which the only issue is one requiring expert opinion, the 
case is of a highly technical nature, such that lay persons could not comprehend 
it, and expert testimony must be presented to decide the issue. If the expert 
opinion testimony, then, is not challenged by affidavit or otherwise 
controverted, it may form the basis for summary judgment. Especially is this 
true where the court or jury would not be at liberty to disregard the 
uncontroverted testimony of the expert. Cases generally satisfying these 
criteria have been in the field of medical malpractice. Moncrief v. Fuqua, Tenn. 
App., 610 S.W.2d 720 (1979); Castleberry v. Collierville Medical 
Associates, Inc., supra; Webster v. 
Offshore Food Service, Inc., supra.

[¶18.]  Appellee's expert stated his opinion that 
it appeared that there was in excess 
of $5,000 loss for each of the six fiscal years from 1975 through 1980. That 
opinion was based upon his examination of the receipts, deposits, bank records, 
and other documents, none of which were before the court. The affidavit was one 
stating conclusions based upon an analysis of the evidence. Conclusions from an 
analysis of evidence of this kind generally cannot be used to support a summary 
judgment, Peterson v. First National Bank 
of Lander, Wyo., 579 P.2d 1038 (1978), but rather are for 
the fact finder - in this case the trial court. Keyes Fibre Co. v. Chaplin Corp., 97 F. Supp. 605 (Me. 
1951). In this case, the affidavit of appellee's expert does not satisfy the 
requirements we have set out for affidavits used in summary judgments. It does 
not disclose facts or demonstrate that there is no genuine issue of material 
fact. The case is not one of a highly technical nature. It should not be decided 
upon opinion evidence, at least where the basic facts underlying that opinion 
are not disclosed.

[¶19.]  From all we have said, it is apparent 
that the affidavit presented by appellee, insofar as it presents opinions and 
conclusions resulting from an analysis of records not before the court, may not 
be considered for the purpose of awarding summary judgment. We look then to the 
balance of the material contained in the affidavit, the pleadings, answers to 
interrogatories, admissions, and report of the state examiner to determine 
whether summary judgment should be entered in this case, and, if so, in what 
amount. An examination of these materials discloses that the following is 
undisputed:

1. the Town of Evansville was on a June 
to June fiscal year;

2. the bond of appellant 
was in effect and renewed each year commencing in August 1974 and concluding 
early in 1980;

3. the findings contained 
in the report of the state examiner, including the total amount of the loss are 
correct;

4. the loss was 
attributable to the town treasurer in the performance of her duties as 
such;

5. the losses in each of 
the years 1978, 1979, and 1980 exceeded in amount $5,000.

[¶20.]  The bond of the town treasurer was 
renewed on an annual basis and was in effect for each fiscal year beginning in 
1974 and ending in 1980. We note from the state examiner's report that there was 
a shortage of funds in the amount of $193,447.66 in the Public Improvement Water 
Sink Fund. The report, with respect to that fund, indicates that through June 
1975 the exact amount of money received by the treasurer was deposited 
regularly, about two months after receipt. This practice of regular deposits 
continued into the next fiscal year, until fall of 1975, when the practice of 
regular deposits ceased. Thereafter, although monies were received each month, 
there were many months in which no deposits were made at all; then, later, large 
catch-up deposits would be made. During the fiscal year ending June 1976, there 
were seven months in which no deposits were made; and, at the end of that fiscal 
year, the treasurer had four months of receipts which were not deposited. And 
for the fiscal year ending June 1977, there were nine months in which no 
deposits were made; and, at the end of the fiscal year, ten months of receipts 
had not been deposited. Receipts averaged in excess of $6,000 each month, and, 
thus, the shortage for the fiscal year ending June 1976 was approximately 
$24,000; and for the fiscal year ending June 1977, the shortage exceeded 
$60,000.

[¶21.]  These are the material facts. There is no 
genuine issue concerning them, nor do they give rise to any inference in favor 
of appellant as would preclude entry of summary judgment. These facts 
demonstrate a failure of the treasurer to perform her duties as required by the 
terms of her bond causing the surety to become liable thereon. There is no 
inference other than that the loss to the Town of Evansville exceeded $5,000 in each of the 
fiscal years ending June 1976 and June 1977. Appellant has admitted that 
recovery should be had for the subsequent three years. The total summary 
judgment, therefore, should be in the amount of $25,000.

[¶22.]  As to appellee's claim for the fiscal 
year ending June 1975, monies for each month were deposited by the town 
treasurer regularly each month in the correct amounts, two months after being 
received. These material facts are not in dispute. However, they do not lead to 
summary judgment as a matter of law, for different inferences may reasonably be 
drawn from these facts. Viewing the evidence in a light most favorable to 
appellant, as we must do, a reasonable inference might be that the treasurer 
neither misappropriated funds nor was in default upon the condition of her bond 
during fiscal year 1975, for she deposited monthly the correct amount of each 
month's funds, two months after receipt of same. The two-month delay in 
depositing might have been the town's standard business practice. Additional 
evidence may indicate otherwise, but at this stage of the proceeding, summary 
judgment should not have been entered in favor of appellee for the year 1975 in 
the amount of $5,000.

"`It is only where it is 
perfectly clear that there are no issues in the case that a summary judgment is 
proper. Even in cases where the judge is of opinion that he will have to direct 
a verdict for one party or the other on the issues that have been raised, he 
should ordinarily hear the evidence and direct the verdict rather than attempt 
to try the case in advance on a motion for summary judgment, which was never 
intended to enable parties to evade jury trials or have the judge weigh evidence 
in advance of its being presented.'" Hughes v. American Jawa, Ltd., 529 F.2d 21 (8th Cir. 1976).

[¶23.]  We are cognizant of appellant's claim 
that deposits by the town treasurer over the six-year period, if applied to 
shortages during the first three years, would satisfy any claim as to receipts 
in those years - thus appellant's position that shortages exist for only the 
last three years. However, the bond here was one renewed annually providing 
coverage of $5,000 each year for losses in that amount occurring in any or all 
of the years covered. Therefore, we must look at each year separately to 
determine the losses covered by the bond. Shortages began after fiscal year 1975 
and accumulated each year thereafter until discovered in 1980. Catch-up deposits 
were from receipts of the town's own money, a portion of which was being 
regularly withheld. To hold that shortages in prior years could be satisfied by 
depositing the town's own money in later years would be untenable - a result we 
cannot accept. 

[¶24.]  For the reasons stated, we affirm entry 
of summary judgment in favor of appellee in the amount of $25,000 representing 
recovery upon its bond in the amount of $5,000 for each of the five fiscal years 
following the fiscal year ending June 1975, and we remand for trial upon 
appellee's claim for the fiscal year ending June 1975.

FOOTNOTES

1 Rule 56(e), W.R.C.P., 
states:

"(e) Supporting and 
opposing affidavits shall be made on personal knowledge, shall set forth such 
facts as would be admissible in evidence, and shall show affirmatively that the 
affiant is competent to testify to the matters stated therein. Sworn or 
certified copies of all papers or parts thereof referred to in an affidavit 
shall be attached thereto or served therewith. The court may permit affidavits 
to be supplemented or opposed by depositions, answers to interrogatories, or 
further affidavits. When a motion for summary judgment is made and supported as 
provided in this rule an adverse 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 that there is a 
genuine issue for trial. If he does not so respond summary judgment, if 
appropriate, shall be entered against him."