Court Opinion

ID: 994451
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:23:11.977246+00
Date Added: 2024-06-11T13:22:08.558072
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DARRELL A. DRESSER,
Plaintiff-Appellant,

v.

W. MERIL BACKUS; RICHARD BACKUS;
BACKUS ASSOCIATES, INCORPORATED;
UNIVERSAL LIFE ASSOCIATES,                                          No. 96-2099
INCORPORATED,OF MARYLAND,
Defendants-Appellees,

and

MARJORIE BACKUS,
Defendant.

Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
J. Frederick Motz, Chief District Judge.
(CA-94-1643-JFM)

Submitted: February 20, 1998

Decided: March 18, 1998

Before MURNAGHAN and WILLIAMS, Circuit Judges, and
PHILLIPS, Senior Circuit Judge.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Ralph Gordon, GORDON & SIMMONS, Frederick, Maryland; Gove
L. Allen, Mesa, Arizona, for Appellant. George B. Huckabay, ORT-
MAN, LOVE & HUCKABAY, Bethesda, Maryland, for Appellees.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Darrell A. Dresser appeals from the district court's order granting
summary judgment to the Defendants on his action seeking recovery
of 300 shares (50%) of the stock of a closely-held corporation, Uni-
versal Life Associates of Maryland (ULA/MD). For the reasons that
follow, we affirm.

In December 1982, Dresser joined W. Meril Backus in an insur-
ance marketing effort designed to recruit insurance agents and brokers
to sell life insurance products for particular insurance companies and
for which they received "marketing overrides" (which, in turn, were
based on a percentage of sales commissions paid to agents and bro-
kers). Dresser and Backus later incorporated the business in Washing-
ton, D.C., as Universal Life Associates ("ULA/DC"), with Dresser
initially owning 600 shares. He then sold 200 shares to Backus for
$10,000. In January 1987, Backus purchased an additional 300 shares
of stock from Dresser, leaving Dresser with 100 shares and Backus
with 500 shares.1

Dresser became ill in 1986, and Backus incorporated Universal
Life Associates of Maryland ("ULA/MD") in August 1987. ULA/MD
issued 300 shares of stock each to Dresser and Backus. In early 1989,
Dresser assigned and transferred his 300 shares of ULA/MD stock to
_________________________________________________________________
1 There is a dispute, not relevant to the outcome of the case, as to
Backus' belief regarding the parties' relative ownership interests in
ULA/DC. According to Backus, Dresser led him to believe that he
(Dresser) actually owned substantially more stock in ULA/DC than he
did and that Backus purchased the additional 300 shares of stock in Janu-
ary 1987 based on his (false) assumption that the purchase was necessary
to make Backus an equal owner with Dresser. According to Dresser,
however, Backus was fully aware of exactly how much stock each of
them held before and after the sale of Dresser's 300 shares.

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Marie Arient. Dresser and Arient married in Arizona the following
month. After the couple separated in 1991, Dresser filed suit in Ari-
zona state court seeking a divorce from Arient and the return of the
ULA/MD stock. The suit also named ULA/MD and Backus, among
others, as additional respondents.

In early 1992, Arient transferred her 300 shares of ULA/MD stock
to Backus. In July 1992, Dresser obtained a default judgment against
Arient in the divorce proceeding. However, the order dismissed with
prejudice the claims against ULA/MD and Backus for lack of per-
sonal jurisdiction. Nevertheless, the Arizona state court awarded
Dresser fifty percent of the stock in ULA/MD and all dividends or
benefits paid thereon since September 1, 1991. The court's order was
based on Dresser's allegation that he had not transferred the stock to
Arient; but rather that he had placed title of the stock in Arient's name
solely for estate planning purposes and that Arient had agreed to
return the stock if the parties ever separated. At the time the underly-
ing action was filed, Arient's motion for relief from the default judg-
ment was pending in the Arizona state court.2 ULA/MD was
dissolved in April 1992.

Dresser filed this action in June 1994 against Backus, Backus' son
(Richard Backus), Backus Associates, Inc., and ULA/MD, in which
he alleged breach of fiduciary duty, misrepresentation, and conspiracy
to defraud. Dresser sought $500,000 in compensatory damages plus
punitive damages and various equitable remedies. The district court
granted summary judgment in favor of the Defendants based on the
conclusion that Dresser had unconditionally transferred his interest in
the stock to Arient in 1989 and, therefore, lacked standing to bring
this action. Alternatively, the district court found that Dresser was
barred from any relief under the doctrine of "unclean hands." Dresser
noted a timely appeal.

This court reviews the granting of summary judgment de novo. See
Higgins v. E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th
Cir. 1988). The party moving for summary judgment has the burden
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2 On February 10, 1998, the Arizona Court of Appeals held that the
trial court properly awarded the stock to Dresser and that Dresser's
action against Arient for conversion was improperly dismissed.

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of showing that no genuine issue of material fact exists and that it is
entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c);
Barwick v. Celotex Corp., 736 F.2d 946, 958 (4th Cir. 1984). The
party opposing the motion must come forward with some minimal
facts to show that summary judgment is not warranted. See Fed. R.
Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
We construe all facts and draw reasonable inferences in the favor of
the nonmovant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
255 (1986). With this standard in mind, we find that summary judg-
ment was properly entered in favor of the Defendants.

Backus submitted unrefuted documentary evidence that (1) Dresser
notified ULA/MD by letter of his desire to transfer his stock to Ari-
ent; (2) ULA/MD's Board of Directors approved the transfer (condi-
tional upon Arient entering into a Voting Trust Agreement in favor
of Backus); (3) the stock was assigned and transferred by Dresser to
Arient on March 1, 1989; (4) dividends on the stock were paid to Ari-
ent; (5) Backus purchased the stock from Arient in April 1992; (6) the
Maryland State Department of Assessments and Taxation approved
the Articles of Dissolution of ULA/MD on April 9, 1992; and (7) all
of these events occurred prior to the default judgment obtained by
Dresser in Arizona.

Dresser maintains that, despite these facts, the district court was
required to give full faith and credit to the Arizona judgment against
Arient awarding him the ULA/MD stock. Federal courts are required
to give a judgment of the rendering court the same full faith and credit
as that judgment would have in the rendering state. See 28 U.S.C.
§ 1738 (1994). However, the Arizona judgment is valid only against
Arient. Backus was not a party to that action and the Arizona court
had no personal jurisdiction over him. Accordingly, the district court
properly concluded that Dresser unconditionally transferred his inter-
est in the ULA/MD stock on March 1, 1989, and that the Arizona
judgment provided no grounds for relief with respect to the named
Defendants. Therefore, summary judgment was properly entered in
favor of the Defendants.

The district court also concluded that Dresser was not entitled to
equitable relief under the doctrine of unclean hands. Based on evi-
dence presented by Backus that Dresser, while under oath, misrepre-

                    4
sented his credentials in the Arizona state court proceedings in order
to be qualified as an expert and that he had also misrepresented his
percentage of ownership interest in ULA/DC, we cannot say that the
district court's conclusion was erroneous.

We therefore affirm the district court's order awarding summary
judgment to the Defendants.3 We dispense with oral argument on
motion of the parties and because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid the decisional process.

AFFIRMED
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3 In light of this conclusion, we deny as moot Dresser's motion to have
the case transferred to a different district court judge upon remand.

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