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Hopkins AG Supply LLC v. First Mountain Bancorp

United States District Court, W.D. Oklahoma

May 24, 2017

FIRST MOUNTAIN BANCORP, a Nevada Corporation,, Defendants.


          ROBIN J. CAUTHRON United States District Judge.

         In June 2012, Plaintiff Hopkins AG Supply LLC entered into a contract with Defendant Turhan's Bay Export & Import Co. (“Turhan”) for the sale of wheat. Turhan agreed to purchase Plaintiff's wheat for $269, 001.52. Plaintiff required a bond to guarantee the purchase price so Turhan acted independently to hire Defendant Brunswick Companies (“Brunswick”), a broker, to locate a surety to supply the guarantee. Brunswick, working with consultant company Defendant Phenix Services (“Phenix”), owned by Defendant Larry Wright (“Wright”), selected Defendant First Mountain Bancorp (“FMB”) as surety.

         FMB contractually agreed to guarantee payment of the funds due to Plaintiff, up to $300, 000.00. Although Plaintiff received $25, 000.00 from Turhan on August 23, 2012, a balance of $244, 001.52 remains unpaid. FMB subsequently failed to pay the balance pursuant to the guarantee and Plaintiff brought this suit, alleging breach of contract, fraud, and conspiracy to commit fraud.

         Plaintiff asserted claims of conspiracy and unjust enrichment against Wright, Phenix, and Brunswick. Plaintiff also brought breach of contract and negligence claims against Brunswick. Now before the Court is Defendants Wright, Phenix, and Brunswick's (collectively, the “moving Defendants”) Motion for Summary Judgment (Dkt. No. 203). Plaintiff has responded and the Motion is now at issue.


         The standard for summary judgment is well established. Summary judgment may only be granted if the evidence of record shows “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movants bear the initial burden of demonstrating the absence of material fact requiring judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A fact is material if it is essential to the proper disposition of the claim. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movants carry this initial burden, the nonmovant must then set forth specific facts outside the pleadings and admissible into evidence which would convince a rational trier of fact to find for the nonmovant. Fed.R.Civ.P. 56(c). All facts and reasonable inferences therefrom are construed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).


         Plaintiff asserted a claim of civil conspiracy to commit fraud against Wright, Phenix, and Brunswick. Defendants argue for favorable summary judgment because Plaintiff cannot prove the claim by clear and convincing evidence. The moving Defendants believed FMB would honor its guarantee, and therefore they did not participate in any fraud, if it occurred.

         Plaintiff must meet the elements of a civil conspiracy, which is “a combination of two or more persons to do an unlawful act, or to do a lawful act by unlawful means.” Brock v. Thompson, 1997 OK 127, ¶ 39, 948 P.2d 279, 294, as corrected (Apr. 3, 1998) (citation omitted). Unlike criminal conspiracy, a civil conspiracy itself does not create liability; the conspiracy's purpose or means must be independently unlawful. Id.

         Plaintiff claims the purpose of the conspiracy was to defraud Plaintiff of the funds owed pursuant to the guarantee. “Actual fraud is the intentional misrepresentation or concealment of a material fact, with an intent to deceive, which substantially affects another person, ” and constructive fraud is defined as “a breach of a legal or equitable duty to the detriment of another, which does not necessarily involve any moral guilt, intent to deceive, or actual dishonesty of purpose.” Croslin v. Enerlex, Inc., 2013 OK 34, ¶ 12, 308 P.3d 1041, 1045-46 (footnote omitted) (citations omitted). Both have the same legal consequence and are generally questions of fact. Id. Additionally, “[w]hen fraud is alleged, every fact or circumstance from which a legal inference of fraud may be drawn is admissible.” Id. at ¶ 11, 308 P.3d at 1045; Berry v. Stevens, 1934 OK 167, ¶ 16, 31 P.2d 950, 955 (stating the court will allow a “great latitude of proof” in regard to fraud claims).

         Plaintiff argues Brunswick acted as a communication liaison between Turhan, Phenix, and FMB, isolating Turhan from the negotiations. Plaintiff shows Turhan paid a $15, 000.00 brokerage fee to Brunswick, who retained $2, 250.00 and tendered $12, 750.00 to Phenix. Phenix then retained $2, 250.00 and tendered the remaining $10, 500.00 to FMB. Plaintiff argues the typical rate for similar services is 10% of the amount of the performance bond or guarantee, but Brunswick told Phenix the rate was too high and negotiated the amount to 5%, or $15, 000.00. When Plaintiff notified FMB of Turhan's nonpayment, FMB provided instructions for Plaintiff to contact Wright or his business, which was supposedly a brokerage consultant in this transaction.

         Plaintiff also offers as evidence a history of lawsuits brought against Wright and his businesses. Plaintiff states Brunswick must have known about the lawsuits and business dissolutions; therefore, collaboration with Wright must have occurred. Defendants argue this evidence is inadmissible pursuant to Rule 56(c)(2). Some of the evidence presented may be inadmissible, but the Court will make the determination with full briefs on the issue. See Fed.R.Civ.P. 56(e)(4). The Court finds there are sufficient facts in dispute to deny summary judgment on this claim.


         Plaintiff asserted an unjust enrichment claim against Wright, Brunswick, and Phenix, arguing the commission paid by Turhan should be awarded to Plaintiff on an equitable basis. The moving Defendants argue such an award would be unjust ...

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