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Parties Involved:
Bank of Oklahoma, N.A.
Not Party
Jerry Courtney
Appellant
First National Bank
Not Party
Genmar Industries, Inc.
Not Party
Harris-Kayot, Inc.
Not Party
Charles Gary James
Not Party
Patricia K. James
Not Party
The Islands Marina, Ltd.
Not Party
Emery Urfer
Not Party
Wellcraft Marine
Appellee

Document Text:

• 

. FILED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

Umted Stat~ Court of Appeals 

Tenth Cirmit 

APR 19 1991 

ROBERT L. HOECKER 

BANK OF OKLAHOMA, N.A., Grove Branch, Clerk formerly Bank of Oklahoma Grove; 

GENMAR INDUSTRIES, INC., a Delaware 

corporation, 

Plaintiffs, 

v. 

THE ISLANDS MARINA, LTD., an Oklahoma 

corporation; CHARLES GARY JAMES; 

PATRICIA K. JAMES; HARRIS-KAYOT, INC.; 

EMERY URFER; FIRST NATIONAL BANK AND 

TRUST COMPANY OF VINITA, 

Defendants, 

and 

WELLCRAFT MARINE, a division of 

Genmar, Inc., 

Defendant-Appellee, 

JERRY COURTNEY, 

Defendant-cross-claimantappellant. 

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ORDER AND JUDGMENT* 

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No. 90-5118 

Nos .. 88-C-1335-E) 

& 

88-C-1499-E) 

( N. D. Okla. ) 

This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 90-5118 Document: 010110034260 Date Filed: 04/19/1991 Page: 1 
Before ANDERSON, TACHA, Circuit Judges, and KANE,** District 

Judge. 

**Honorable John L. 

District Court for 

designation. 

Kane, Senior District Judge, United States 

the District of Colorado, sitting by 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Appellant Jerry Courtney appeals from an order of the 

district court dismissing his negligence claim against appellee 

Genmar Industries, Inc. pursuant to Fed. R. Civ. P. 12(b)(6). We 

affirm. 

Background 

Genmar Industries is the parent corporation of Wellcraft 

Marine, a power boat manufacturer. During the period relevant to 

this appeal, the Islands Marina (Marina) of Ketchum, Oklahoma, was 

one of Wellcraft's customers. The litigation underlying this 

appeal began in June 1988, when various creditors of Marina filed 

an action claiming interests in property and seeking foreclosure. 1 

In this appeal, we shall set forth only those facts necessary to 

disposition of the issue presented. 

1 For a more complete recitation of the facts involved in the 

underlying litigation, see Bank of Okla., N.A. v. Islands Marina, 

Ltd., 918 F.2d 1476 (10th Cir. 1990). 

2 

Appellate Case: 90-5118 Document: 010110034260 Date Filed: 04/19/1991 Page: 2 
Beginning in March 1987, the First National Bank & Trust 

Company of Vinita (FNBV) began financing the Wellcraft boats sold 

to Marina. On March 31, 1987, FNBV's president sent a letter to 

Wellcraft stating, in part: 

We here at the bank are very pleased with the 

opportunity to work with Mr. James and the Wellcraft 

Corporation. It is our bank's procedure that on new 

boats shipped to [Marina], a copy of the invoice and the 

manufacturer's statement of origin should be sent to my 

attention here at the bank. Upon [Marina's] approval, 

our bank will make direct payment to your company. 

Rec. Vol. I doc. 1, exh. A. 

In July 1987, Wellcraft transferred certain boats to Marina, 

including a fifty-foot Meteor. Contrary to the written 

instructions in the March 31 letter from FNBV, however, Wellcraft 

sent an invoice and original manufacturer's statement of origin 

(MSO) 2 to Marina for this boat. In January 1988, Courtney loaned 

Marina $150,000. As security, he received the MSO for the 

fifty-foot Meteor. The boat was later sold, and Courtney received 

payment on his loan. 

At the time Courtney made the loan, and during all relevant 

periods, FNBV held perfected security interests in all Marina 

inventory, including the Meteor. When the litigation underlying 

this appeal began, FNBV asserted a claim against Courtney for 

return of the $150,000. The district court granted sununary 

judgment in favor of FNBV, and we affirmed. See Bank of Oklahoma, 

918 F.2d at 1480-81. 

2 An MSO is a document from 

first transfer of a new boat. 

the 

3 

manufacturer certifying the 

Appellate Case: 90-5118 Document: 010110034260 Date Filed: 04/19/1991 Page: 3 
In turn, Courtney filed this claim against Wellcraft alleging 

that its failure to send the Meteor MSO to FNBV as requested was 

negligent, and resulted in FNBV's judgment against Courtney. 

Courtney alleged he relied on the MSO in lending money to Marina. 

He asserted, in essence, that but for Wellcraft's failure to send 

the MSO to the bank, he would have no liability to FNBV. 

In response, Wellcraft filed a motion to dismiss pursuant to 

Fed. R. Civ. P. 12(b)(6). The motion asserted, inter alia, that 

because Wellcraft had no legal duty to Courtney, a negligence 

claim was not actionable. The district court granted the motion 

on June 1, 1990. This appeal followed. 

Discussion 

We review the sufficiency of a complaint de novo and apply 

the same standard as the district court. Morgan v. City of 

Rawlins, 792 F.2d 975, 978 (10th Cir. 1986). "Dismissal of a case 

pursuant to Fed. R. Civ. P. 12(b)(6) requires the legal 

determination that the plaintiff can prove no set of facts in 

support of his claim to entitle him to relief. To reach this 

conclusion, we clothe plaintiff's claim in such fashion to presume 

all allegations true." Id. (citation omitted). 

Three elements are required to establish a cause of action 

for negligence under Oklahoma law; "(l) (t]he existence of a duty 

on the part of the defendant to protect plaintiff from injury; (2) 

the failure of the defendant to perform his duty; and (3) the 

injury to plaintiff resulting from such failure." Nicholson v. 

Tacker, 512 P.2d 156, 158 (Okla. 1973). In this case, we must 

address whether Wellcraft owed a legal duty to Courtney. This is 

4 

Appellate Case: 90-5118 Document: 010110034260 Date Filed: 04/19/1991 Page: 4 
! 

a threshold issue in a negligence case, Rose v. Sapulpa Rural 

Water Co., 631 P.2d 752, 756 (Okla. 1981), and presents a question 

of law. Young v. Wheeler, 706 P.2d 552, 554 (Okla. Ct. App. 

1985). 

"[W]henever the circumstances attending [a] situation are 

such that an ordinarily prudent person could reasonably apprehend 

that, as the natural and probable consequences of his act, another 

person. will be in danger of receiving an injury, a duty to 

exercise ordinary care to prevent such injury arises ..•. " 

Lisle v. Anderson, 159 P. 278, 280 (Okla. 1916). If no harm is 

foreseeable, no legal duty arises. See Young, 706 P.2d at 554. 

To find duty in this case, the court would have to determine 

it was foreseeable that Wellcraft's failure to send an MSO to FNBV 

would cause harm to a distant third-party lender. Reasonable 

minds could not differ on this question. There simply is no 

foreseeable harm. Whatever the contract existing between 

Wellcraft and FNBV, it did not contemplate Courtney's existence. 

Further, the MSO did not confer title. See Okla. Stat. tit. 63 

S 804.1-804.4 (1984)(governing boat titles and registration in 

Oklahoma). 3 Therefore, it was not foreseeable that Courtney would 

wrongly rely on this one in deciding to lend money. If Courtney 

had conducted any investigation, he would have found FNBV's 

perfected·security interest. 

Courtney's arguments to the contrary are unavailing. In 

particular, his reliance on Keel v. Titan Constr. Corp., 639 P.2d 

3 These statutes were repealed effective January 1, 1990. They 

were in full force and effect, however, at the time these events 

occurred. 

5 

Appellate Case: 90-5118 Document: 010110034260 Date Filed: 04/19/1991 Page: 5 
• 1228 (Okla. 1981) is misplaced. There, the court found plaintiff 

was a third-party bene~iciary to a contract. Id. at 1231. 

Courtney meets none of the requirements for conferring third-party 

beneficiary status. See id. (outlining elements for conferring 

third party beneficiary status). 

Accordingly, the judgment of the United States District Court 

for the Northern District of Oklahoma is AFFIRMED. 

Entered for the Court 

Stephen H. Anderson 

Circuit Judge 

6 

Appellate Case: 90-5118 Document: 010110034260 Date Filed: 04/19/1991 Page: 6