Court Opinion

ID: 9574253
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:03:42.325432+00
Date Added: 2024-06-11T12:44:17.195358
License: Public Domain

URBIGKIT, Justice,
dissenting.
This case is correlative to Rivermeadows, Inc. v. Zwaanshoek Holding and Financiering, B.V., 761 P.2d 662 (Wyo.1988) (Zwaanshoek I), as that case was tried by a jury. With dissent in Zwaan-shoek I, in part from court rejection of a portion of the jury verdict and decision, I again differ and dissent in this case (Zwaanshoek II), where the litigative resolution was denied total jury consideration.1 Issues now differ by virtue of the summary judgment conclusion, even though the same general scenario in business dealing is factually presented. I would find error in fact and precedent in entry of summary judgment in favor of plaintiffs’ (appellees) complaint and against defendants’ (appellants) similar, but differentiated, counterclaim issues.
SUMMARY JUDGMENT ON THE MERITS OF THE COMPLAINT AND COUNTERCLAIM
In preclusively determining the adequacy of argued issues of fact to deny summary judgment, the trial court, with extensively developed factual record, considered factual conflicts at a Cordova v. Gosar, 719 P.2d 625 (Wyo.1986) Stage Six. This is only to be done by considering movant’s evidentia-ry burden of demonstrating no genuine issue of material fact exists, respondent’s right to the benefit of reasonable doubt and to draw all favorable inferences form the record, and reflecting that credibility questions are to be resolved by trial. Cordova, 719 P.2d at 639-40. Considering the *1183actual but complex and interlaced contentions developed in appellants’ counterclaim, I do not find justification to conclude that the record is sufficiently barren or factually consistent to justify any summary judgment. Those contested issues, including not only fraud but also presented, although poorly documented, disingenuous transactional arrangements, cannot easily be separated within the proper confines of summary judgment unless this court will now countenance trial by affidavit. The benefit of trial testimony or jury review is simply not permitted. The broad scope of issues presented by this case cried to be tried, not shunted aside by summary judgment. Greenwood v. Wierdsma, 741 P.2d 1079 (Wyo.1987).
More justifiably, this court partially seems to apprehend the validity of its decision in generalized result—that it should affirm in the face of the heavily documented factual conflict by concluding that the real issue was failure of the pleadings to sufficiently state a claim. I cannot agree. This rationale accomplishes a juxtaposition of motion to dismiss, W.R.C.P. 12(b)(6), with an examination of the sufficiency of fraud pleadings to be direct and concise required by W.R.C.P. 8(e)(1) and 9(b). However, summary judgment under W.R. C.P. 56 and not a decision based on a pleading inquiry was actually entered in the face of a very exhaustive and conflicting record. Once material beyond pleading is received and considered, regression to the motion to dismiss is improper unless support for the pleading is absent in evi-dentiary conflict. Respondent is entitled to the benefit of the evidentiary support for his pleaded allegations. This majority’s stance only convolutes cases for conversion to summary judgment, where here, a summary judgment record was converted to a motion to dismiss. Torrey v. Twiford, 713 P.2d 1160 (Wyo.1986). Previously and directly, the trial court considered this case on a summary judgment perspective by reviewing evidence and not pleadings; thus, the present affirmation by this court on any other basis is improper.
In this suit responding to Zwaanshoek, as the named plaintiff within the Arab Group (appellees), Donald Albrecht and Jo Anne Albrecht (appellants), as individuals, filed a nine page answer and counterclaim. Appellees’ response to the counterclaim constituted a general denial with affirmative defenses of (1) failure to state a claim; (2) failure to state a punitive damage claim; (3) estoppel; (4) laches; (5) doctrine of clean hands; (6) waiver; (7) lack of reliance; (8) statute of frauds; (9) separately stating that appellants were barred, precluded and estopped by (a) availability of benefits; (b) underlying agreement performance; (c) inability to rescind and then restore parties to pre-agreement position; and continued by additional affirmative defenses of (10) lack of standing of Jo Anne Albrecht; (11) knowledge of corporate entities; and finally (12) adequate remedy at law.
No where in that thirteen page reply pleading document did appellees then, or by subsequent pleading later, contend that a failure of pleadings existed, and that appellants had not adequately presented their fraud allegations in the pleadings. Following complaint amendment, as not affecting appellants’ nine page cotmterclaim or the appellees’ thirteen page reply, the motion for summary judgment was pursued by appellees on its amended complaint and against the counterclaim based on “undisputed facts,” which were then categorized and unitized within a thirty-three page trial court brief, of which twenty-three and one-half pages involved generally contested factual recitations and contentions.
After review of the extended record of five volumes including the initially submitted affidavits, the essential fact issue is presented of an expected on-going business arrangement constituting the essence of the entire transaction. This was in the contemplation of appellants to be the “consideration for the execution of the bail-out of the prior failed transaction” with which the parties had been involved.
In evidentiary support for summary judgment, the principal participant averred that he did not participate in, witness, nor did appellants tell him anything about an *1184anticipated on-going arrangement. Likewise, stated in inquiry denial, Lebanese citizen Fuad Siniora and Teton Land Title Company president Larry Monk added nothing by affidavit and information on the subject. Other affidavits by Muhammad Baasiri of Lebanon and property owner Helen Murray did not address the subject. Consequently, the only actual offered evidence on the litigated issue intrinsic to defense and counterclaim was addressed in behalf of the movant only by the affidavit of Mustafa Razian, a citizen of Saudi Arabia. As a director in the intrinsic Arab Group companies, Razian spoke with first-person knowledge as follows:
4. I did not initiate any of the proposals for the restructuring transaction. I understand that Donald H. Albrecht (“Al-brecht”) made those proposals to Peter Hausmann and others representing Zwaanshoek Holding and Zwaanshoek Bouw in early 1982 before I became involved in the discussions. I further understand that those proposals were the subject of correspondence among Peter Hausmann, Klaus Naude, Joseph El-Khoury, Lina Naaman and Albrecht.
5. I first became involved in the discussions concerning the restructuring transaction in early 1982. At that time I travelled to the United States to inspect the Tarzana project and to meet with Citibank representatives to discuss the steps that could be taken to preserve and protect the two notes aggregating $3.5 million held by Zwaanshoek Holding and Zwaanshoek Bouw. I met Albrecht for the first time during that trip.
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9.I never told or represented to Al-brecht that, if he agreed to the restructuring transaction, Zwaanshoek Holding, Zwaanshoek Bouw or any other member of the MIG group would enter into any new or future business transactions in the United States or elsewhere with Al-brecht or that one or more of these companies would invest monies in transactions in the United States or elsewhere through Albrecht or his companies. It was not the purpose of my trip to California to consider any new investment opportunities for Plaintiffs or any other member of the MIG group. Furthermore, Albrecht never made any proposals through me to Zwaanshoek Holding and Zwaanshoek Bouw or to any other MIG group company for new business transactions after the restructing transaction. To my knowledge, Albrecht never presented any such proposals to Zwaanshoek Holding and Zwaanshoek Bouw or any other member of the MIG group.
10. Since the closing of the restructuring transaction on April 29, 1982, Al-brecht has never discussed with or mentioned to me or, to my knowledge, to Zwaanshoek Holding, Zwaanshoek Bouw or any other member of the MIG gr[o]up any alleged representations, statements or premises concerning future business or investments of the MIG gr[o]up to be conducted or made through Albrecht or his companies.
11. I have reviewed the allegations of Albrecht’s Answer and Counterclaims in this action regarding statements and representations purportedly made by me in connection with the restructuring transaction. Those allegations are contained primarily in paragraphs 21-31 of Al-brecht’s Answer and Counterclaims. I never made any such statements or representations to Albrecht or to anyone else, and those allegations are absolutely false.
What then, for the summary judgment motion response, did appellants provide? Affiant Donald Albrecht stated:
18. As a result of our unsuccessful negotiations with Citibank and the imminent foreclosure, Mr. Razian met with me and advised that Mr. Hariri did not wish to recognize the loss of the defendants’ $3,500,000.00 investment. Mr. Ra-zian then asked me if I would be willing to allow the defendants to go forward with a plan which they had conceived which would allow them to escape the impact of the loss. Mr. Razian acknowledged that the two “promissory notes” reflecting the defendants’ $3,500,000.00 investment were clearly of no value as a *1185result of the pending Citibank foreclosure.
19. It was proposed that I “purchase” the two “promissory notes” and trust deeds. The purchase price would be $2,000,000.00 and would be reflected by my personal promissory note which would be secured by my interest in certain valuable real property and corporate securities, which were worth well in excess of $2,000,000.00. This would allow the defendants not to recognize the loss because on their books they would be able simply to recognize the “sale” of the “promissory notes.” Such “purchase” was not only transparent due to the fact that the “promissory notes” were then valueless, but this entire transaction was contemporaneous with our agreeing to give the property to Citibank in lieu of foreclosure, part of which agreement required me in turn to transfer the two “promissory notes” and junior trust deeds which I had “purchased” to Citibank such that it obtained free and clear title unencumbered by the junior deeds of trust relating to the two “promissory notes.” That this would be required was apparent, since my “purchase” was concurrent with the transfer to Citibank which would have to obtain precisely the same clear title which would result from foreclosure.
20. To induce me to go along with the defendants’ plan, Mr. Razian made a number of representations. First was that the defendants would fulfill without question their obligations relating to the $1,000,000.00 financing of the Jackson Hole Project. I explained to Mr. Razian that the defendants were already so obligated. Mr. Razian then said that, in addition, and as the true consideration for my agreeing, was the defendants’ promise (specifically Mr. Hariri or his controlled companies) that they would invest tens of millions of dollars in real estate projects in the United States through me. Mr. Razian said that Mr. Hariri was fabulously wealthy on a scale beyond that even dreamed of by the prior Arab owners. I was assured of continuing investments on such a huge scale and that such investments would generate the $2,000,000.00 necessary to satisfy my promissory note for my asserted “purchase” of the defendants’ Tarzana Project “promissory notes,” as well as at least an additional $1,000,000.00 to satisfy one last inducement.
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22. Simply stated, the only reason I participated in the defendants’ scheme was as a result of Mr. Razian’s promises to me that all of the defendants real estate investments in the United States would be only through me, that such investments would be in the magnitude of tens of millions of dollars, and would, at a minimum, be sufficient to generate net profits to me sufficient to pay back the $1,000,000.00 “loan” which would become due on May 1, 1985, so that the bank of America letter of credit would never be called upon, and also sufficient to pay back the $2,000,000.00 promissory note such that I would never have to pay it out of my other assets and such that my security would never be at risk.
23. However, and completely contrary to Mr. Razian’s promises, the defendants never engaged in any additional investments with me, and they then breached their obligations to continue financing the Jackson Hole Project. This is detailed in Section 4, below.

Section 4-' The Defendants’ Breach

24. After inducing me to participate, the defendants never invested even a single additional dollar with me. Hence, all of the promised consideration never materialized, thus depriving me not only of such additional business, but also of the profits necessary to satisfy the $1,000,-000.00 loan which becomes due on May 1, 1985, and the $2,000,000.00 promissory note which becomes due in 1990.
Essentially, no other pre-summary judgment evidence addressed the subject of the contended fraud in the inception, since other participants in behalf of the Arab Group did not lend weight to presented affidavit information. Equally in conflict on the issue of the fraud in the inducement, is sim*1186ilar factual conflict of performance default by appellees in failure to advance the entire one million dollar commitment. There is no question in this record that the entire one million dollars to be loaned to appellants was not advanced. The record is in dispute as to nonpayment justification by appellees. If not justified, this was, as a matter of law, established to be a singularly significant default by appellees as a matter of fact. Sagebrush Development, Inc. v. Moehrke, 604 P.2d 198 (Wyo.1979); Quin Blair Enterprises, Inc. v. Julien Const. Co., 597 P.2d 945 (Wyo.1979). See also Western Plains Service Corp. v. Ponderosa Development Corp., 769 F.2d 654 (10th Cir.1985).
Essentially, one concludes from close reading of the summary judgment order and present majority decision that existence of issues of fact cannot be and were not denied, as essentially conceded by the summary judgment conclusion of the trial court in the statement:
The consideration given by the plaintiff is adequate. The defendant has the burden of proving fraud by clear and convincing evidence and he has failed to satisfy this burden. Summary judgment should be granted and the plaintiff should be allowed to foreclose on the mortgage. [Emphasis added.]
This statement constitutes the most direct recognition of a weighed evidence disposition by summary judgment proceedings. In further discussion, the trial court said:
A fraud claim must be established by clear and convincing evidence. Duffy, [v. Brown, 708 P.2d 433, 437 (Wyo.1985) ] * * *. The party alleging fraud must do so clearly and distinctly and prove the same so as to satisfy the mind and conscience of its existence. Reed v. Owen, 523 P.2d 869 (Wyo.1974). The only evidence submitted by Albrecht on the issue of fraud is his own declaration. This does not meet the clear and convincing evidentiary standard necessary to prove a claim of fraud.
The judgment of the trial court further stated:
17. Albrecht’s fraud claim is governed by Wyoming law, which requires proof by clear and convincing evidence of each of the following five elements: 1) a false representation made by the defendant, 2) which is relied upon by the plaintiff, 3) to his damage, 4) the asserted false representation must be made to induce action, and 5) the plaintiff must reasonably believe the representation to be true. Under Wyoming law, the party alleging fraud must do so clearly and distinctly and must prove the same so as to satisfy the mind and conscience of its existence.
18. Albrecht failed to come forward with clear and convincing evidence to establish each of the elements of his fraud claim which, in essence, alleged that Plaintiffs induced Albrecht to enter into the April 29, 1982 Agreement by falsely promising to invest million[s] of dollars through Albrecht. Albrecht’s fraud claim, which was premised solely upon an alleged vague oral promise not supported by a shred of documentary or other corroborative evidence, strains credulity!2]
19. Plaintiffs and their affiliates (and their respective agents and representatives) did not make any misrepresentations of fact to Albrecht or his agents or representatives in order to induce Al-brecht to enter into the April 29, 1982 Agreement. [Emphasis added.]
The character of the findings of the trial court cannot be justified in summary judgment where variant direct testimony con*1187flicts existed on critical issues. Obviously, the trial court tried a contested case in summary judgment decision by accepting one and rejecting another of two substantively detailed affidavits. This is a result that this court should not now countenance as unjustified by any past precedent or current logic. See W.R.C.P. 56 and a multitude of Wyoming cases. Parker v. Haller, 751 P.2d 372 (Wyo.1988).
With existence of issues of fact not really in doubt, this court now chooses to decide what was never considered by the trial court and is included here but not separately defined in the decision—the adequacy of the pleading to state a triable fraud case. Previously, I procedurally rejected this approach, and I also totally disagree substantively on this issue.
After pleading the failed California Tar-zana project, appellants alleged:
22. The Arab Group then represented to Albrecht that, for internal reasons, it was undesirable for them to “recognize” the loss of their $3,500,000.00 investment in the Tarzana Project. The Arab Group then asked Albrecht if he would allow them to go forward with a plan conceived by them and their counsel which would allow the Arab Group not to recognize the loss of their $3,500,000.00 investment (i.e., the Tarzana $3,500,000.00 Notes).
23. The plan proposed by the Arab Group required Alb[r]echt to “purchase” the illusory and valueless Tarzana $3,500,000.00 Notes. Albrecht’s “purchase” of Plaintiffs illusory and valueless Tarzana $3,500,000.00 Notes would be by way of the $2,000,000.00 Note secured by Albrecht’s interest in certain valuable real property and corporate securities. For such “purchase” and in consideration thereof, the Arab Group promised to invest tens of millions of dollars in real estate projects in the United States with Albrecht and/or his affiliated companies.
24. In reasonable and justifiable reliance upon representations by the Arab Group that they would engage in future multi-million dollar business transactions with Albrecht and/or his affiliated companies, Albrecht agreed to the Arab Group’s proposition. The parties accordingly entered into a Memorandum of Agreement on or about April 29, 1982 (the “Memorandum”). The terms of the Memorandum were effectuated by voluminous complex documentation. The Memorandum and the related documentation collectively constitute the agreement which the Arab Group induced Al-brecht to enter into their plan (the “April 29, 1982 Agreement”).
25. The only consideration for Al-brecht to enter into the April 29, 1982 Agreement was the representation by the Arab Group that they would engage in future multi-million dollar projects with him and/or his affiliated companies. The “purchase” of Plaintiffs’ illusory and valueless Tarzana $3,500,000.00 Notes reflecting the loss of their $3,500,000.00 investment in the Tarzana Project was devoid of substance, since the Tarzana $3,500,000.00 Notes were neither intended as nor were they in fact true promissory notes not did they have any value.
26. After inducing Albrecht to enter into the April 29, 1982 Agreement, the Arab Group failed to engage in any additional investment with Albrecht or his affiliated companies.
The essential elements for determining whether fraud in the inducement was properly alleged are (1) false representation; (2) reliance; (3) asserted false representation made to induce action; and (4) belief of defrauded party that the representations were true. See Garner v. Hickman, 709 P.2d 407 (Wyo.1985) and Duffy v. Brown, 708 P.2d 433 (Wyo.1985).
Accepting customary rules of pleading and evidentiary consideration, it cannot be logically questioned within a sufficiency-to-state-a-claim perspective, or for that matter summary judgment, that the pleading in evidence sufficiently stated the second, third and fourth fraud elements. The controlling inquiry is whether, in fraud cases, (a) an intent to defraud must exist when the representation of future action is made, Green Tree Acceptance, Inc. v. Doan, 529 So.2d 201 (Ala.1988), or (b) later conduct *1188can be utilized as evidence of original intent. Conversely, this raises the “I didn’t lie to you originally, since I only decided to cheat you later” defense. I do not accept this premise, either in morality, fraud pleading, or summary judgment inquiry. Wyoming has long recognized that intent can be inferred from subsequent action taken. Cullin v. State, 565 P.2d 445 (Wyo.1977).
Appellants alleged that “[t]he Arab Group promised to invest tens of millions of dollars in real estate projects * * * with Albrecht,” and that after inducing them by the incentive to enter into the agreement, the Arab Group subsequently failed to engage in any additional investment:
27. It was at all times reasonable and justifiable for Albrecht to rely upon the foregoing representations by the Arab Group and Albrecht had no reasonable means of ascertaining the Arab Group’s true intent, which was that they never intended to honor their representations and only made them to induce Albrecht unwittingly to participate in their fraudulent scheme. The Arab Group’s scheme was to transform their valueless lost equity investment in the Tarzana Project into either (a) the valuable $2,000,000.00 Note obtained from Albrecht, or (b) the valuable real estate and corporate securities securing said $2,000,000.00 Note, including the subject real property. In either case, Defendants would succeed in obtaining something valuable (e.g., valuable notes, real estate and/or corporate securities) for nothing (e.g., the valueless Tarzana $3,500,000.00 Notes), all as a result of defrauding Albrecht who would end up with nothing.
28. Public policy precludes allowing the Arab Group to succeed in their fraudulent scheme to victimize Albrecht by causing him to lose valuable assets to the Arab Group, thereby allowing the Arab Group fraudulently to convert their valueless lost investment in the Tarzana Project into valuable assets belonging to Albrecht.
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30. The Arab Group’s representations were made with the intent to induce Al-brecht to rely upon them and to enter into the April 29, 1982 Agreement and related transactions, notwithstanding the Arab Group’s true undisclosed intent not to perform any such representations.
It is a maxim that all evidence is to be weighed according to the proof which was within the power of one side to produce and in the power of the other to contradict. Mammoth Oil Co. v. United States, 275 U.S. 13, 51, 48 S.Ct. 1, 72 ¿.Ed. 137 (1927). Certainly circumstantial evidence is appropriate to prove the fraud elements. United States v. Mammoth Oil Co., 14 F.2d 705 (8th Cir.1926). It must be recognized that a logically connected train of circumstances may be as cogent to prove the existence of a fact as any direct evidence and, indeed, may at times outweigh opposing direct testimony. Tisthammer v. Union Pac. R. Co., 41 Wyo. 382, 286 P. 377 (1930). See Claus v. Farmers & Stockgrowers State Bank, 51 Wyo. 45, 63 P.2d 781 (1936). In discerning that issues of fact were to be tried by the jury, this court said in Broom v. State, 695 P.2d 640, 643 (Wyo.1985):
Circumstantial evidence, with proper inferences to be drawn therefrom, may be sufficient to establish fraud. United States v. Mammoth Oil Co., 14 F.2d 705, 717 (8th Cir.1926), affirmed 275 U.S. 13, 48 S.Ct. 1, 72 L.Ed. 137 (1927).
Since it is impractical to look into a person’s mind to ascertain his intention, it is necessary to consider surrounding circumstances. Since it is most difficult to prove intent by direct evidence, circumstantial evidence is necessary. The issue of actual fraud is commonly determined by recognized indicia, demonstrated badges of fraud, which are circumstances so frequently attending fraud; a concurrence of several will make out a strong case and be the circumstantial evidence sufficient to sustain a court’s finding.
Matter of Reed’s Estate, 566 P.2d 587, 590-91 (Wyo.1977).
It is noteworthy by logical pursuit of what is found in pleading and the record *1189that in the implicit counterclaim reply defense presented by the Arab Group of clean hands and high morality, the factual content of that defense was not a change in plans, but rather a direct dispute about the original understanding. Consequently, neither the trial court nor this court, as now by initial contemplation, can realistically examine this record without finding evidence of what actually occurred without considering the circumstantial proof which bears upon what initially was intended. Events provided more than a scintilla of confirming evidence of fraud. Reynolds v. Mitchell, 529 So.2d 227 (Ala.1988).
Without allowing trial, or perhaps even if trial had been held lacking contribution and evidence by several other persons directly involved in the negotiations, this court and third parties will not be able to accurately or even persuasively determine what happened. With this caveat, but in application of reasoned probabilities and known facts within a universe of a real world business dealings, the abject denial of appellees in this case of any agreement incentive to be derived from future business lacks conceivable credibility. Whether such contribution of the ultimate result was a future promise, puffing, idle conversation, or misunderstood nonpromissory discussion, it cannot be rationally discerned between the minimal contribution of this record of the “I didn’t—you did” construction of the only two informing affidavits available.
Perhaps this ends in the recognition for jurists of what we know as laypersons, negotiators, and litigants who have been exposed with frequency to the syndrome and professional attitude sometimes otherwise ascribed as the “I never said anything that you can now prove unless I put it in writing” standard of business morality. On this record, I would leave resolution or determination of fact and extraction of falsity to the common composite good knowledge and commonplace wisdom of the trial jury. This is the most fundamental reason why trials by affidavit are not justified in our system of jurisprudence. By statement, the trial court chose not to believe Donald Albrecht and to believe Mustafa Razian. Reviewing exactly the same documents as the trial court, arriving at a singularly different conclusion in at least two regards, and perhaps factoring in a greater direct exposure to human conduct after business problems and failure, the record directs my conclusion that we should let the jury determine credibility as a matter of fact, and not do it as a matter of law through the judiciary.
I would reverse and remand for trial on the merits.

. This is not the only litigation with which these developments have been involved. See Albrecht v. United States, 529 F.Supp. 135 (D.Wyo.1981), rev’d 831 F.2d 196 (10th Cir.1987).

. This statement is simply unsupported in this record. What the trial court actually says is that for whatever reason, in weighing the evidence, he chose to believe implicitly the Lebanese and Saudi Arabian witnesses and disbelieve the Albrechts, without listening to the actual testimony. A categorical, total, and actual weighing of the evidence was directly involved. Although at trial, absent jury participation, weighing of evidence is intrinsic to decision, weighing in summary judgment may occasion validation by source rather than substance which is the principal reason for trials. Thus, disposition by summary judgment affidavits was made where the actual speaker was the attorney who composed the text, and searching cross-examination was denied.