Title: Jones Land and Livestock Co. v. Federal Land Bank of Omaha

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Jones Land and Livestock Co. v. Federal Land Bank of Omaha1987 WY 21733 P.2d 258Case Number: 86-197Decided: 02/26/1987Supreme Court of Wyoming
JONES LAND AND LIVESTOCK CO., A WYOMING CORPORATION; AND 
HUGH W. JONES, INDIVIDUALLY, APPELLANTS (DEFENDANTS), WYOMING PRODUCTION CREDIT 
ASSOCIATION, A WYOMING CORPORATION; AND AMERICAN QUASAR PETROLEUM COMPANY OF NEW 
MEXICO, A TEXAS CORPORATION, (DEFENDANTS),

 
 
v.

 
 
FEDERAL LAND BANK OFOMAHA, A 
CORPORATION, APPELLEE (PLAINTIFF).

 
 
Appeal from the District 
Court, FremontCounty, Elizabeth Kail, 
J.

 
 
Philip Nicholas of 
Corthell and King, Laramie, for appellants.

 
 
Richard D. Gist of 
Richard D. Gist, P.C., Lander, for 
appellee.

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

 
 

MACY, 
Justice.

 
 

[¶1.]     This is an appeal from 
a summary judgment for foreclosure of lands mortgaged by appellants 
JonesLand and Livestock Co., a Wyoming corporation, and 
Hugh W. Jones, individually, to secure the payment of promissory notes held by 
Federal Land Bank of Omaha (FLB) and Wyoming Production Credit Association 
(WPCA).

 
 

[¶2.]     We 
affirm.

 
 

[¶3.]     Appellants present the 
following issues for review:

 
 
"1. Are there material 
facts in controversy regarding the issues raised in the complaint, crossclaim or 
the affirmative defenses such that granting summary judgment was 
inappropriate?

 
 
"2. Is there a material 
issue of fact concerning any of the following:

 
 
"a. Did appellees agree 
to give appellants releases for pieces and parts of the appellants' Baldwin Place in 
order that they could make land sales which would generate income to make 
payments to appellees?

 
 
"b. Were appellants' 
circumstances such that the regulations promulgated pursuant to the Farm Credit 
Act and incorporated in the mortgage given by appellants to appellees required 
appellees to provide or at least consider providing partial 
releases?

 
 
"c. Did appellees breach 
the terms of the contract with appellants by not providing promised partial 
releases?

 
 
"d. Did appellees pursue 
a course of dealing with appellants which prevented appellants from repaying the 
notes payable to appellees? 

 
 
"e. Are there facts which 
would justify treating appellees, the Wyoming Production Credit Association and 
the Federal Land Bank of Omaha, as the same entity for purposes of this action 
such that defenses against one are valid against the 
other?

 
 
"f. Did appellees act in 
concert or conspire in their acts against appellants such that defenses against 
one are valid against the other?

 
 
"3. Did appellees 
interfere with appellants' ability to perform, causing the default upon which 
appellees rely to bring this action to foreclose?

 
 
"4. Was there sufficient 
competent evidence on the issues of attorneys' fees and interest rates before 
the Trial Court to support the Court's Judgment?"

 
 

[¶4.]     On April 4, 1975, 
appellants borrowed $506,000 from FLB to refinance and expand their existing 
ranching operations and to pay for Mr. Jones' ranch house. The loan was 
evidenced by appellants' promissory note made payable to FLB and was secured by 
a mortgage on appellants' lands - a ranch known as the Beaver Creek ranch and a 
ranch located near Lander, Wyoming, known as the Baldwin place. The loan 
documents provided that the loan was to be repaid in 29 equal annual 
installments but gave FLB the option to require prepayment in full on January 1, 
1980, if FLB was not satisfied with appellants' financial 
progress.

 
 

[¶5.]     During the time 
appellants were negotiating the FLB loan, they borrowed an additional amount of 
money from WPCA for the purchase of more cattle and machinery, which loan was 
evidenced by appellants' promissory notes made payable to WPCA and was secured 
by another mortgage on appellants' ranch lands. This mortgage is the subject of 
WPCA's cross-claim against appellants. None of the loan documents mention the 
sale of the mortgaged land by appellants for the purpose of making their annual 
payments or otherwise; however, paragraph ten of the FLB mortgage 
provides:

 
 
"That the Mortgagee may extend and defer the 
maturity of and renew and reamortize said indebtedness, release from liability 
any party liable thereon, and release 
from the lien hereof portions of the 
property covered hereby, without affecting the priority hereof or the 
liability of Mortgagors or any other party for the payment of said indebtedness, 
all such extensions, deferments, renewals, and reamortizations to be secured 
hereby." (Emphasis added.)

 
 

[¶6.]     In 1979 appellants 
negotiated the sale of approximately 35 acres of their ranch lands and submitted 
a letter application to FLB for release of the acreage from the FLB mortgage. 
The letter also contained a proposal for making the FLB loan current and plans 
to sell additional parcels of the ranch lands in the future. FLB accepted 
appellants' request and reamortized appellants' loan, providing for a maturity 
date of January 1, 1983.

 
 

[¶7.]     None of the planned 
sales materialized, and appellants advised FLB that, due to high interest rates, 
it might be difficult to sell development property. During the month of June 
1981, appellants verbally informed FLB that they wanted to borrow enough money 
from the Yellowstone State Bank, Lander, Wyoming, to make the FLB and WPCA loans 
current and to finance anticipated subdivision development costs. They also 
informed FLB that they needed a release of 40 to 80 acres of their mortgaged 
lands so that Yellowstone State Bank would have a first mortgage to secure the 
loan. FLB refused to grant the requested release.

 
 

[¶8.]     On July 20, 1982, FLB 
advised appellants that, because of the delinquent status of the loan, it would 
consider legal action if the loan was not paid at maturity on January 1, 1983, 
or if other suitable arrangements were not made. Appellants failed to pay the 
FLB loan at maturity. FLB commenced foreclosure proceedings on February 10, 
1984, and added WPCA as one of the defendants by filing an amended complaint on 
March 2, 1984. WPCA answered the complaint, admitting that its mortgage was 
junior, and cross-claimed against appellants for foreclosure of its mortgage 
since the WPCA loan was not timely paid.

 
 

[¶9.]     Appellants answered 
FLB's complaint and WPCA's cross-claim by admitting the existence of the notes 
and mortgages and alleging that the notes were not in default, that the notes 
and mortgages did not constitute the entire agreement, and that FLB and WPCA 
were barred from recovery by the statute of limitations and by the doctrines of 
waiver, laches, and estoppel. After FLB and WPCA filed their motions for summary 
judgment, appellants filed for Chapter 11 bankruptcy. The automatic stay entered 
in the bankruptcy proceeding was lifted, and the motions were heard after two 
continuances.

 
 

[¶10.]  In support of their motions for summary 
judgment, FLB and WPCA submitted affidavits alleging the delivery of the notes 
and mortgages to them, appellants' subsequent defaults, and the amounts of 
principal, interest, attorney's fees, and costs owing by 
appellants.

 
 

[¶11.]  The affidavit and deposition of Mr. Jones 
filed in opposition to the motions for summary judgment stated, inter alia, that 
Mr. Jones became a real estate agent for the purpose of buying and selling the 
land so he could earn enough money to purchase a ranch; that he bought the 
Baldwin place to subdivide and sell in small parcels; and that he planned to use 
the income from those sales to pay for the Baldwin place and to aid in paying 
for the Beaver Creek ranch. Mr. Jones further stated that the lending agents for 
FLB and WPCA agreed his plan was feasible, loaned appellants the money to 
refinance the purchase of the Baldwin place and 
the Beaver Creek ranch, and further agreed that if the land sales were going 
smoothly, the FLB loan would not be called due in five 
years.

 
 

[¶12.]  In addition, Mr. Jones stated that WPCA 
forced the sale of appellants' cattle and that FLB did nothing to stop the sale, 
knowing that it would prevent appellants from raising money to make the mortgage 
payments. The affidavit also contained Mr. Jones' allegations that FLB, through 
its agents, broke express oral agreements to provide appellants with partial 
mortgage releases for subdivided lands, and, as a direct consequence, appellants 
were unable to make the FLB mortgage payments.

 
 

[¶13.]  The trial court ruled that there were no 
genuine issues of material fact raised by appellants and that FLB and WPCA were 
entitled to judgment as a matter of law. Summary judgment was entered on June 
13, 1986.

 
 

[¶14.]  Appellants support their contention that 
there is a genuine issue of fact by arguing that the proposed testimony of Mr. 
Jones concerning FLB's agreement to provide releases is consistent with the 
language of the mortgage in that the mortgage does not prohibit releases. 
Apparently, it is appellants' position that FLB was required to provide them 
with partial releases because there was an oral agreement to do so. We do not 
agree.

 
 

[¶15.]  When construing written contracts, we are 
guided by the black letter law reiterated in Shepard v. Top Hat Land & 
Cattle Co., Wyo., 560 P.2d 730, 732 (1977):

 
 
"If the language of the 
contract is plain and unequivocal that language is controlling and the 
interpretation of the contractual provisions is for the court to make as a 
matter of law. The meaning of the instrument is to be deduced only from its 
language if the terms are plain and unambiguous."

 
 
See also Williams v. 
Collins Communications, Inc., Wyo., 720 P.2d 880, 883 
(1986).

 
 

[¶16.]  The language of the mortgage is plain and 
unequivocal that FLB may, at its discretion, grant partial releases of the 
mortgage. We will, therefore, not consider whether extraneous evidence would 
alter this discretion.

 
 

[¶17.]  Appellants also assert that, while there 
is some discretion in FLB in providing mortgage releases, all requests had to be 
considered as they are contemplated in the mortgage and the Federal Farm Act, 
which act was incorporated into the mortgage by reference. Appellants' 
authorities do not support this contention. In any event, appellants have failed 
to demonstrate any instance in which FLB refused to consider granting a request 
for a mortgage release, and we are unable to find any in the record on appeal. 
The argument that a request for a release was not made because it would not have 
been granted does not create a substantial issue of fact which will avoid the 
entry of summary judgment. The refusal by FLB to provide a release so that 
appellants could get a bank loan does not mean that FLB did not consider 
granting the release. The record demonstrates that FLB considered the request 
and advised appellants that they could not borrow themselves out of 
trouble.

 
 

[¶18.]  Appellants' contention that an issue of 
fact exists as to whether the individual and concerted acts of FLB and WPCA 
caused them to lose their land is not sound. Appellants argue that FLB and WPCA 
officed together and worked out a plan which would force appellants to sell 
their cattle, prevent them from selling land, and force them to sell or lose 
both. Mr. Jones stated in his affidavit that, in addition to not providing 
appellants with partial releases, FLB did not lift a finger to prevent the 
forced and unjust sale of appellants' livestock by WPCA, knowing that, if 
appellants were out of the livestock business, they could not raise money to 
make the mortgage payments. Appellants' claim is conclusory and fails to 
demonstrate the existence of a genuine issue of material fact so as to defeat 
the motions for summary judgment. Roth v. First Security Bank of Rock 
Springs, Wyoming, 
Wyo., 684 P.2d 93 (1984); Gennings v. First National Bank at Thermopolis, Wyo., 654 P.2d 154 (1982); Moewes v. Farmer's Insurance Group, Wyo., 641 P.2d 740 
(1982).

 
 

[¶19.]  Appellants also contend that FLB and WPCA 
are not entitled to foreclose their mortgages because they failed to provide 
partial releases and forced appellants to sell their livestock in a commercially 
unreasonable manner, thereby causing appellants' inability to make the mortgage 
payments. Appellants' contention and cited authority are premised on the 
existence of a mandatory obligation to grant partial releases and the assertion 
that Mr. Jones set out competent underlying facts in his deposition or 
traversing affidavit to show that FLB and WPCA unjustly caused the sale of 
appellants' cattle. There is not a scintilla of evidence in the record to 
suggest that WPCA was required or refused to grant partial releases to 
appellants. In addition, as we previously stated, FLB was not obligated to 
consider or grant partial releases to appellants pursuant to the unambiguous 
terms of the mortgage. We also previously stated that appellants failed to set 
forth any genuine issue of material fact indicating that FLB or WPCA jointly or 
severally caused the failure of appellants to make their mortgage payments. We, 
therefore, hold that neither FLB nor WPCA is estopped from foreclosing its 
mortgage.

 
 

[¶20.]  Appellants correctly state that the 
burden is on the moving party to demonstrate that there is no genuine issue of 
material fact before a motion for summary judgment should be granted. 
Schutkowski v. Carey, 
Wyo., 725 P.2d 1057 (1986). 
However, once the movant has established a prima facie case, the burden then 
shifts to the opposing party to come forward with competent evidence of specific 
facts countering the facts presented by the movant. General allegations and 
conclusory statements are not sufficient. Roth v. First Security Bank of 
Rock Springs, Wyoming, supra.

 
 

[¶21.]  Appellants assert that issues of fact 
exist as to whether or not FLB agreed to provide partial releases, or at least 
consider providing such releases as required under the Farm Credit Act, and 
whether or not FLB and WPCA jointly and severally pursued a course of dealing 
which amounted to a conspiracy to cause appellants to default in the mortgage 
payments. We addressed these assertions in the context of whether or not FLB was 
estopped from foreclosing its mortgage, and our discussion in this connection is 
equally applicable to appellants' contention that the trial court erred in 
granting FLB's motion for summary judgment. Our examination of the record on 
appeal clearly shows that FLB carried the burden of proving that appellants were 
in default in making their agreed mortgage payments and that appellants failed 
to come forward with specific competent evidence to show a genuine issue of 
material fact to defeat the motion for summary judgment. Evidence presented in 
opposition to a motion for summary judgment must be admissible at trial. 
Conclusory statements and extrinsic evidence used to construe an unambiguous 
contract are not admissible. Madison v. Marlatt, Wyo., 619 P.2d 708 (1980); Bancroft v. Jagusch, Wyo., 
611 P.2d 819 (1980).

 
 

[¶22.]  Appellants further contend that there is 
insufficient competent evidence to support the trial court's judgment awarding 
interest on the outstanding debt. It is argued that the affidavit supporting the 
claim for interest is insufficient in that it does not state the basis upon 
which the parties agreed to pay interest, the method in which interest was 
determined, and the standard rates charged to others. Appellants reason that 
summary judgment is inappropriate where such facts are missing from the 
affidavit and cite Shanor v. A-Pac, Ltd., Wyo., 711 P.2d 420 (1986), as 
authority for this proposition. That case holds that the party must submit 
evidence which establishes a prima facie case, not that all of the evidence must 
be set out in the affidavit.

 
 

[¶23.]  We have examined the promissory notes 
which appellants admit signing. They provide that from time to time a variable 
interest rate on the outstanding indebtedness may be charged. The supporting 
affidavits, and the referenced accounting attached thereto, provide further that 
such interest was computed by a simple mathematical calculation. This is 
sufficient to present a prima facie case of the amount of interest due on the 
outstanding principal indebtedness. There was no need to show what interest 
rates were charged to other lenders. If the interest rate was improper or there 
was an inaccurate accounting of the interest charged, appellants should have 
supplied the trial court with evidence thereof. As we stated above, conclusory 
statements and categorial assertions are not sufficient to demonstrate the 
existence of a genuine issue of fact to defeat a motion for summary 
judgment.

 
 

[¶24.]  The trial court awarded FLB the costs it 
incurred in obtaining an MIA appraisal of appellants' lands for use in 
bankruptcy court to obtain an order modifying the automatic stay to permit FLB 
and WPCA to proceed with their foreclosure actions. Appellants assert that it 
was an abuse of the court's discretion to award these costs as well as 
attorney's fees for services rendered in obtaining the 
modification.

 
 

[¶25.]  Appellants do not question that these 
costs and fees can be incurred and awarded pursuant to the terms of the 
mortgage, but they do advance the argument that there was no evidence presented 
to show that the appraiser's fee was reasonable. They also argue that a mortgage 
provision providing for payment of attorney's fees by a debtor in a bankruptcy 
proceeding is void, unenforceable, and contrary to public policy. No authority 
has been cited to support these arguments. This Court has consistently refused 
to consider positions which are not supported by proper citation of authority. 
Trout v. Wyoming Oil and Gas Conservation 
Commission, Wyo., 721 P.2d 1047 (1986); Hance 
v. Straatsma, Wyo., 721 P.2d 575 (1986). We continue to take 
that position in this case, even though a search of authorities might 
substantiate appellants' argument.

 
 

[¶26.]  Appellants also contend that the 
supporting affidavit did not address the specific criteria for ascertaining the 
reasonableness of the attorney's fees awarded by the court as required by DR 
2-106 of the Model Code of Professional Responsibility of the American Bar 
Association and Supreme Court decisions. We acknowledge that there must be some 
evidentiary showing in order to make a determination of reasonable attorney's 
fees. Durdahl v. Bank of Casper, Wyo., 
718 P.2d 23 (1986). However, the itemization contained in DR 2-106, supra, of 
factors to be considered in determining the reasonableness of attorney's fees is 
merely a guideline to be followed by an attorney when charging a fee. It is not 
mandatory that a court consider and attempt to apply each and every factor when 
awarding a reasonable attorney's fee.

 
 

[¶27.]  The affidavits and attachments thereto 
relating to attorney's fees show an itemization of the nature of the service 
performed, the time expended, and the hourly fee customarily charged for such 
service. This information was adequate to form a basis for the court's finding 
that the time expended and the hourly fee charged for the itemized services 
rendered were reasonable. We, therefore, hold that the trial court did not abuse 
its discretion when it entered judgment against appellants for FLB's attorney's 
fees.

 
 

[¶28.]  Appellants also advance the argument that 
it is not appropriate to enter judgment awarding reimbursement for incidental 
expenses incurred in the conduct of the foreclosure proceedings, even though 
such reimbursement is allowed by the terms of the mortgages, unless there is 
documentation showing the necessity for and the reasonableness of the expenses. 
Appellants again fail to support their argument with the citation of any 
authority. We, therefore, decline to consider their 
argument.

 
 

[¶29.]  We also decline to answer the question 
presented by appellants as to Issue 2.e. for the reason that they failed to 
present any argument, cogent or otherwise, or cite any authority addressing the 
issue.

 
 

[¶30.]  For all of the reasons stated above, we 
find that the district court did not err in granting summary judgment for FLB 
and WPCA on all of the issues presented by the pleadings.

 
 

[¶31.]  Affirmed.