Court Opinion

ID: 5165358
Source: CourtListenerOpinion
Date Created: 2022-01-02 03:28:36.873295+00
Date Added: 2024-06-11T13:57:10.855444
License: Public Domain

I respectfully dissent. The trial court's findings of fact adequately support its determination that Levitz was a "purchaser" under the Utah Uniform Securities Act (Securities Act). I would affirm the trial court's decision on Warrington's cross-appeal. In any event, I would reach the substantive issues raised by Levitz in his appeal as to damages.
 ANALYSIS Adequacy of the Findings
The issue before this court on Warrington's cross-appeal is whether Levitz, having never received stock despite losing $64,650 to Energex, has standing to sue as a purchaser under the Securities Act. The trial court made several findings concerning Levitz's position as a purchaser. I believe that, when properly construed, the findings are consistent with the trial court's determination that Levitz was a purchaser of stock.1
The findings clearly indicate that Levitz parted with $175,000 and received back only $110,350. Although Warrington failed to return $64,650, he did not issue stock to Levitz, nor did he provide any consideration in exchange for Levitz's $64,650. Thus, Levitz paid $64,650 toward Energex stock, but a stock certificate was never issued to him.2 *Page 1249 
Since Levitz paid Energex $64,650 in a stock deal, and received nothing in return, he has standing to sue as a purchaser.
The trial court's findings adequately support its determination that Levitz was a purchaser. Nevertheless, the main opinion remands the case for further findings. It does so without articulating what other findings are required. In view of the findings that the trial court has already made, I believe remand is unnecessary.
 Alternative Basis for Affirmance3
Assuming arguendo that the findings regarding an actual purchase are in some way deficient, there remains another basis for us to affirm. Section 61-1-22(1)(a) of the Securities Act provides that a person who offers or sells a security "is liable to the person . . . buying the security from him, who may sue either at law or in equity to recover the consideration paid for the security, together with interest at 12% per year from the date of payment, costs, and reasonable attorney's fees. . . ." Utah Code Ann. § 61-1-22(1)(a) (1993) (emphasis added). The Securities Act does not define a "buyer" or "seller"; however, since "securities laws are remedial in nature and should be broadly and liberally construed to give effect to the legislative purpose," Payable Accounting Corp. v.McKinley, 667 P.2d 15, 17-18 (Utah 1983), we should look to the legislature's definition of a "sale."4
Section 61-1-13(20)(a) defines a "sale" to include "every contract for sale of, contract to sell, or disposition of, a security or interest in a security for value." Utah Code Ann. §61-1-13(20)(a) (1993) (emphasis added). Thus, under the statute, there need be only a contract to sell and not necessarily an actual sale. The Utah Supreme Court has acknowledged the differences between an actual sale and a contract to sell.
 A sale involves a present transfer of the title in the goods from the seller to the buyer. A contract to sell implies that the title in the goods remains vested in the seller and is to be transferred to the buyer at some future time. Whether a contract is one of sale or an executory contract to sell depends always upon what the parties to it intend in regard to the time when the title in the property is to go to the buyer. If they intend the title to be transferred when the contract is made, it is a contract of sale; otherwise it is a contract to sell.
Jones v. Commercial Inv. Trust, 64 Utah 151, 163, 228 P. 896,900 (1924).
Executory contracts are contracts that have not yet been fully completed or performed, but there is an obligation to complete or perform in the future. See Wagstaff v. Peters,203 Kan. 108, 453 P.2d 120, 124 (1969). An executory contract to sell is a contract under which "something remains to be done by either party before delivery and passing of title." Martin v.John Clay Co., 167 S.W.2d 407, 411 (Mo.Ct.App. 1943). *Page 1250 
While title to the stock in the present case did not pass with the $175,000 transfer, title to the stock clearly would have passed upon Levitz's approval of the plant operations and financial statements, and the additional investment of $75,000.
Executory contracts must comply with contract formation requirements. See, e.g., Prudential Preferred Properties v. Jand J Ventures, Inc., 859 P.2d 1267, 1272 (Wyo. 1993). In the present case, Warrington, Pinder, and Cropper all stated that Levitz and Energex had an agreement concerning the purchase of stock.5 Levitz agreed to transfer $175,000 to Energex in exchange for stock in the company and further manifested his agreement by wiring $175,000 to Energex. See Restatement (Second) of Contracts § 19 (1981) (manifestation of assent may be made by acts). I believe these parties had at least an executory contract to sell stock. The trial court's determination that Levitz was a purchaser can therefore be sustained under the Securities Act on the basis that the parties had a contract to sell.
The main opinion urges that mere offerees cannot recover under the Securities Act, stating that the rationale for this rule is that mere offerees sustain no damages. I do not disagree with this position. Levitz, however, moved from being a mere offeree to being a purchaser when the parties agreed that Levitz would transfer $175,000 to Energex in exchange for stock in the company. Levitz's position as a purchaser is bolstered by his wiring $175,000 to the company and the company's retention of part of his money, which resulted in damages of $64,650. Levitz was therefore more than a mere offeree, and the trial court's determination that he was a purchaser can be sustained under the Securities Act.
 Inappropriate Directives
Despite the foregoing bases for affirming the cross-appeal, I recognize that this case will now be remanded for further findings. I believe that the main opinion improperly suggests that the trial court should conclude, on remand, that Levitz was not a purchaser. For example, the main opinion states:
 [T]he findings support the opposite conclusion that there was not a sale. . . . The only conclusions the trial court's findings can support are that Levitz was a potential purchaser and that Energex was a potential seller. Given that Levitz's remedy rests on the trial court's conclusion that he is an actual purchaser, not merely a potential purchaser, the trial court's findings of fact are inadequate.
Further, the main opinion states: "[W]e do not necessarily agree with the trial court's conclusion that Levitz is a purchaser. Thus, we do not intend our remand 'to be merely an exercise in bolstering and supporting the conclusion already reached.' "6 I believe that the main opinion has improperly suggested the result or conclusion the trial court should reach on remand.
Since it is possible that the trial court will again find that Levitz is a purchaser, the main opinion should address legal issues raised in Levitz's appeal. "We should . . . resolve issues which are squarely before us on appeal when we can reasonably anticipate the reemergence of those issues in other proceedings hereafter." Hiltsley v. Ryder, 738 P.2d 1024,1026 (1987) (Zimmerman, J., *Page 1251 
concurring) (cited with approval in State v. James,819 P.2d 781, 795 n. 42 (Utah 1991)).7 If the trial court bolsters its findings, the very issues that were argued to us in this appeal will again be before us. This is a waste of resources and time for both the parties and courts. In the interest of judicial economy, I believe we should resolve legal issues raised in Levitz's appeal since it is reasonable to anticipate the reemergence of these issues in a subsequent appeal.
 CONCLUSION
The trial court's findings of fact adequately support its determination that Levitz was a purchaser. Alternatively, Levitz was a purchaser under sections 61-1-13(20)(a) and61-1-22(1)(a) of the Securities Act. The main opinion improperly characterizes the facts, suggesting to the trial court that Levitz was something less than a purchaser.
I would affirm the trial court's decision on Warrington's cross-appeal. In any event, I would reach the substantive issues raised by Levitz in his appeal as to damages.
1 We are required to construe findings to be consistent with each other. See State v. Ramirez, 817 P.2d 774, 787-88 n. 6 (Utah 1991). In Ramirez, the Utah Supreme Court listed several reasons for affirming trial courts' decisions where the findings of fact may arguably be deficient.
 See, e.g., Sorenson v. Beers, 614 P.2d 159, 160 (Utah 1980) (trial court upheld where requisite factual findings that were not made would only make explicit what was already implicit in other findings); Seal v. Mapleton City, 598 P.2d 1346, 1348 (Utah 1979) (presumption that trial court found facts necessary to support judgment); Farrell v. Turner, 25 Utah 2d 351, 355, 482 P.2d 117, 119 (1971) (even without requisite findings, trial court will be upheld if there is competent evidence to support ruling); Mojave Uranium Co. v. Mesa Petroleum Co., 22 Utah 2d 239, 244 n. 7, 451 P.2d 587, 591 n. 7 (1969) (presumption that findings, if made, would be in harmony with decision); Mower v. McCarthy, 122 Utah 1, 6, 245 P.2d 224, 226 (1952) (absent findings we affirm if it would be reasonable to find facts to support conclusion).
Id., 817 P.2d at 788.
2 Warrington's cross-appeal is limited to the following argument: "At no time has [Levitz] ever taken possession or delivery of the stock in question. This position is, and has always been, fatal to his claim for relief under the Utah Securities Act." Warrington further argued:
 A plain and literal reading of Section 61-1-22 compels the conclusion that there is no right of recovery, and therefore no right of action, unless there has been a "tender" to the seller or a "disposition" of the security in question prior to the action. In other words, for [Levitz] to recover under the Securities Act, it is necessary that at some point in time he had the securities in his possession so that he could tender them back or dispose of them prior to the action.
Warrington's cross-appeal is therefore based solely upon the fact that the stock was never tendered to Levitz. This argument ignores basic principles of corporate ownership. See, e.g.,Norton v. Digital Applications, Inc., 305 A.2d 656, 659 n. 1 (Del.Ch. 1973) ("person may be stockholder without having in hand a certificate evidencing stock ownership"); Larry C.Iverson, Inc. v. Bouma, 195 Mont. 351, 639 P.2d 47, 58 (1982) (individual may be stockholder even though stock certificate has not been issued). In view of how Warrington argues the cross-appeal, remand on the broader question of Levitz's status is unwarranted.
3 Since appellate courts may affirm trial courts on any basis, this court may properly base its affirmance on an argument not relied on by the trial court. See State v. Elder,815 P.2d 1341, 1344 n. 4 (Utah App. 1991) (appellate courts may affirm trial courts on any basis, but cannot reverse trial courts on any basis); accord Mel Trimble Real Estate v. Monte VistaRanch, Inc., 758 P.2d 451, 455-56 n. 4 (Utah App.) (appellate court would not consider argument concerning judicial notice raised for first time on appeal "for the purpose of reversing
the trial court" even though it might have done so "if doing so would permit affirmance"), cert. denied,769 P.2d 819 (Utah 1988).
4 The Securities Act was "adopted and designed to restore investors' confidence in the financial markets." PayableAccounting Corp. v. McKinley, 667 P.2d 15, 18 (Utah 1983) (citing Bennett, Securities Regulation in Utah: A Recap ofHistory and the New Uniform Act, 8 Utah L.Rev. 216 (1963)). By its terms, the Securities Act covers much more than where there has been an actual transfer or tender of stock. It certainly should provide a remedy for an individual who parts with his or her money, especially in light of the misrepresentations by a company trying to sell its own stock. I believe the majority's decision in this case will severely limit the protections of the Securities Act.
5 The main opinion mischaracterizes the facts by stating that "the parties agreed not to form a contract." The parties actually formed an agreement; however, the agreement provided Levitz with a right to cancel. The fact that Levitz had a right to cancel the agreement (and actually exercised that right) cannot be the basis for claiming that there was no agreement, in light of Levitz's parting with $175,000 at the parties' assent.
6 The main opinion cites Woodward v. Fazzio, 823 P.2d 474 (Utah App. 1991). In Woodward, this court requested the trial court to address several issues on remand concerning a father's abandonment of his child, stating that it was "not altogether confident that the trial court's final decision was correct. . . ." Id. at 479. On remand, the trial court entered several additional findings, supporting its previous decision and reinstituting its order to terminate the father's parental rights. The father again appealed to this court. See State exrel. R.A.F., 863 P.2d 1331 (Utah App. 1993). In the second appeal, we affirmed the trial court's order terminating the father's parental rights despite our earlier pronouncement. In the present case, if the majority truly believes that the "only conclusion[ ] the trial court's findings can support [is] that Levitz was a potential purchaser," it should simply reverse the trial court rather than give the trial court the opportunity to merely bolster its decision, as was done in Woodward.
7 Rule 30(a) of the Utah Rules of Appellate Procedure provides that "if a new trial is granted, the court will pass upon and determine all questions of law involved in the case presented upon the appeal and necessary to the final determination of the case". Utah R.App.P. 30(a). Rule 30(a) applies directly to an outright retrial on remand, but the identical language of this rule has also been "interpreted to apply to a remand for additional proceedings. . . ." Hiltsley v. Ryder,738 P.2d 1024, 1026 (Utah 1987) (Zimmerman, J., concurring) (citing SaltLake County v. Salt Lake City, 570 P.2d 119 (Utah 1977)). The Utah Supreme Court has previously held that "when a new trial or further proceeding is ordered, it is our duty to pass upon questions of law which may be pertinent and helpful in arriving at a final determination of the case." Id. (citing Lopes v.Lopes, 30 Utah 2d 393, 395, 518 P.2d 687, 688 (1974)).