Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-03207/USCOURTS-ca10-89-03207-0/pdf.json

Parties Involved:
Charles G. Koch
Appellee
David H. Koch
Appellee
William I. Koch
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

CHARLES G. KOCH; and DAVID H. KOCH, 

Plaintiffs-Appellees, 

. PILED 

Umred States Court of Appeals 

Tenth Circuit 

MAY 2 3 1990 

.ROBERT L. HOECKER 

Clerk 

v. 

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) 

) 

) 

) 

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) 

) 

) 

No. 89-3207 

WILLIAM I. KOCH, 

Defendant-Appellant. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF KANSAS 

(D.C. No. 88-1320-K) 

Clifford L. Malone (Larry D. Spurgeon, of Adams, Jones, Robinson & 

Malone, Chartered, Wichita, Kansas; Roger D. Stanton & Mark D. 

Hinderks, of Stinson, Mag & Fizzell, Overland Park, Kansas; John 

C. Aisenbrey, of Stinson, Mag & Fizzell, Kansas City, Missouri; 

and Joseph F. Ryan, of Lyne, Woodworth & Evarts, Boston, 

Massachusetts, with him on the briefs), of Adams, Jones, Robinson 

& Malone, Chartered, Wichita, Kansas, for defendant-appellant. 

Robert L. Howard (James M. Armstrong & Timothy B. Mustaine, with 

him on the brief), of Foulston & Siefkin, Wichita, Kansas, for 

plaintiffs-appellees. 

Before TACHA and SETH, Circuit Judges, and KANE, District Judge.* 

TACHA, Circuit Judge. 

* The Honorable John L. Kane. Jr., District Judge, United 

States District Court for the District of Colorado, sitting by 

designation. 

Appellate Case: 89-3207 Document: 010110560476 Date Filed: 05/23/1990 Page: 1
I I 

\ 

This appeal is from an order granting summary judgment in 

favor of plaintiffs Charles G. and David H. Koch and decreeing 

specific performance of a written contract by which the parties 

agreed to convey certain real estate to plaintiffs and an interest 

in a valuable gold coin collection to defendant William I. Koch. 

The district court granted specific performance of the contract, 

dismissed defendant William Koch's counter-claim seeking money 

damages-for alleged fraudulent misrepresentations with respect to 

a separate stock purchase agreement, and established the value of 

the coin collection and stock to be transferred under the 

contract. Defendant William Koch appeals on the grounds that the 

district court erred in granting summary judgment where there was 

a genuine issue of material fact regarding the alleged fraudulent 

inducement by plaintiffs of the real estate and coin transfer 

contract. Defendant William Koch further contends that the 

district court erred in establishing the value of the real estate 

and coins to be transferred under the court's equitable power 

rather than according to the terms of the contract. We affirm. 

I. 

Plaintiffs Charles and David Koch and defendant William Koch 

entered into two contracts. One contract was for the purchase and 

sale of a substantial amount of stock in Koch Industries, which 

had been previously held by defendant William Koch. That contract 

has been the subject of several lawsuits by defendant William 

Koch, one of which is currently pending in this circuit. In the 

second contract, signed on the same day as the purchase and sale 

agreement, defendant William Koch agreed to transfer to the 

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Appellate Case: 89-3207 Document: 010110560476 Date Filed: 05/23/1990 Page: 2
plaintiffs, Charles and David Koch, his interest in family owned 

real estate in Wichita, Kansas, in exchange for plaintiffs 

transferring to defendant their interest in a valuable family gold 

coin collection. 

When defendant William Koch refused to perform under the real 

estate and coin contract, plaintiffs Charles and David Koch sought 

specific performance, invoking the district court's diversity 

jurisdiction. Defendant William Koch counterclaimed, alleging 

fraud in the inducement and sought both damages and rescission of 

the real estate and coin contract. The district court granted 

summary judgment in favor of plaintiffs Charles and David Koch on 

the counterclaim and ordered specific performance of the real 

estate and coin contract. As part of the specific performance 

decree, the district court ordered an appraisal of the coin 

collection and real estate, and when the appraisers differed on 

the amount of the valuation, the court decreed the final appraised 

value. Defendant William Koch appeals from the district court's 

denial of his counterclaim and its handling of the appraisal 

procedure. 

II. 

Defendant William Koch contends that he refused to perform 

because he was fraudulently induced to enter into the real estate 

and coin transfer contract by fraudulent misrepresentations made 

with respect to the stock purchase and sale agreement that was 

executed on the same day by the same parties. We disagree. 

We review grants of summary judgment on the same basis as the 

district court, determining whether there is any disputed issue of 

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Appellate Case: 89-3207 Document: 010110560476 Date Filed: 05/23/1990 Page: 3
material fact and, if not, whether the substantive law was 

correctly applied. Osgood v. State Farm Mutual Auto. Ins. Co., 

848 F.2d 141, 143 (10th Cir. 1988). We agree with the district 

court that the contract for the transfer of the real estate and 

gold coins should be specifically enforced and that none of 

defendant William Koch's allegations with respect to the stock 

purchase and sale agreement bar enforcement of this contract. The 

real estate and coin transaction is an entirely separate and 

distinct transaction from the stock purchase and sale agreement. 

Cf. Blakesley~ Johnson, 608 P.2d 908, 913 (Kan. 1980) (holding 

stock purchase agreement severable and independent from employment 

agreement where both contained in same contract form). We will 

not look beyond the four corners of the contract where the parties 

have reduced their agreement to written form and the document is 

unambiguous on its face. Short~ Wise, 718 P.2d 604, 606 (Kan. 

1986); Brown~ Lang, 675 P.2d 842, 846 (Kan. 1984). But see Hall 

v. Mullen, 678 P.2d 169, 174 (Kan. 1984) (two agreements executed 

at same time will be construed together). Nothing on the face of 

the contract states a contingency or reliance upon the stock 

purchase and sale agreement. See Blakesley, 608 P.2d at 913. The 

real estate and coin contract is clearly supported by adequate 

consideration. Cf. State ex rel. Ludwick~ Bryant, 697 P.2d 858, 

861 (Kan. 1985); Shepard~ Dick, 453 P.2d 134, 138 (Kan. 1969). 

We affirm the district court's holding that the real estate and 

coin contract is a complete and unambiguous document which does 

not refer in any way to any other agreement and therefore is not 

dependent on the stock sale agreement. 

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Appellate Case: 89-3207 Document: 010110560476 Date Filed: 05/23/1990 Page: 4
We further note our support for the concern expressed by the 

district judge that defendant William Koch has attempted to raise 

similar allegations in several actions brought in separate courts. 

We do not look with favor on these multiple efforts to raise the 

same issues in separate forums. 

III. 

After dismissing defendant William Koch's fraudulent 

inducement defense, the district court decreed specific 

enforcement of the real estate and coin agreement. The court 

required both plaintiffs Charles and David Koch and defendant 

William Koch to submit appraisal reports on the real estate and 

coin collection involved here. After submission of these reports, 

the district court established the value of both the real estate 

and the coin collection. The district court did not, however, 

utilize the appraisal procedure established in the contract. The 

contract required that the appraiser appointed by the plaintiffs 

and the appraiser appointed by the defendant would select a third 

appraiser and that the three appraisers would then establish the 

appraised, or contract, value of the property involved. Defendant 

William Koch now contends that the district court should have 

followed the contract procedures in setting the appraised values 

of the coin collection and real estate. We disagree. 

We review the district court's decree of specific performance 

for abuse of discretion. See McKinney~ Gannett Co., 817 F.2d 

659, 670-71 (10th Cir. 1987). We hold that the district court did 

not abuse its discretion in decreeing specific performance and 

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Appellate Case: 89-3207 Document: 010110560476 Date Filed: 05/23/1990 Page: 5
setting the final appraised value. At the summary judgment 

hearing, counsel for defendant William Koch told the court: 

What I'm suggesting, Judge, is that you have the 

power as the Court sitting in equity to resolve [the 

difference in appraised values] in a fair fashion and as 

you deem appropriate. There are a number of ways you 

can go about doing it and you know them as well or 

better than I do, sir. You can do as you started out 

talking about following the contract. Say, "No, I don't 

want to do that. Let them both submit somethTng,-! will 

decide what it is worth." You can do that. You have 

that power as-the CourtsTtt'Ing in equity. Whatl'rn 

urging you to do, sir, as the Court sitting in equity is 

to do that which is fair, and it is not fair, Judge, to 

tell a man that a one-sixth ownership interest in 

$4,175,000.00 worth of the property is $145,000.00. 

That's not fair. What I'm asking the Court to do is use 

the Court's judicial temperament, judgment, cognizance 

and resolve this matter in a fair fashion, and if you do 

that, then -I-think wewiil have come a long way here, 

sir, we really will. 

Record, vol. II, at 18-19 (transcript of summary judgment hearing, 

June 5, 1989) (emphasis added). The district court specifically 

asked the parties if they needed to have the appraisers present at 

the summary judgment hearing. Neither party requested their 

presence. Counsel for defendant William Koch then urged the 

district court to resolve the matter itself and not to follow the 

contract. We will not now hear the defendant appear before this 

court and attack the district court's exercise of equitable 

discretion in the very manner urged by defendant below. In any 

event, district courts retain substantial discretion in ordering 

specific performance, and the district court did not abuse its 

discretion under the circumstances of this case. See generally 

McKinney, 817 F.2d at 670-672; El Paso Natural Gas Co.~ Western 

Bldg. Assocs., 675 F.2d 1135, 1142 (10th Cir. 1982) (specific 

performance granted under general equity principles); Shepard, 453 

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Appellate Case: 89-3207 Document: 010110560476 Date Filed: 05/23/1990 Page: 6
P.2d at 137 (specific performance rests in sound discretion of 

court). 

IV. 

We find no error in the district court's grant of summary 

judgment on defendant William Koch's counterclaim and hold that 

the district court did not abuse its discretion in ordering 

specific performance. Accordingly, the judgment of the district 

court is AFFIRMED. 

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