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OJ of Stillwater v. Visiontrade AG, 99-6270 (2000)

Court: Court of Appeals for the Tenth Circuit Number: 99-6270 Visitors: 1
Filed: Nov. 30, 2000
Latest Update: Feb. 21, 2020
Summary: F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS NOV 30 2000 TENTH CIRCUIT PATRICK FISHER Clerk O. J. OF STILLWATER, INC., f/k/a Oklahoma Joe’s, Inc., Plaintiff, v. No. 99-6270 (D.C. No. CIV-98-534-M) VISIONTRADE AG, (W.D. Okla.) Defendant-Third-Party Plaintiff- Appellant, v. JOE DAVIDSON; BARRY L. ELLER; and JERRY CARPENTER, Third-Party Defendants, and W. C. BRADLEY CO. and NEW BRAUNFELS SMOKER COMPANY, INC., Third-Party Defendants- Appellees. ORDER AND JUDG
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                                                                        F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                        UNITED STATES COURT OF APPEALS
                                                                         NOV 30 2000
                                     TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk

 O. J. OF STILLWATER, INC., f/k/a
 Oklahoma Joe’s, Inc.,
           Plaintiff,
 v.                                                     No. 99-6270
                                                  (D.C. No. CIV-98-534-M)
 VISIONTRADE AG,                                        (W.D. Okla.)

           Defendant-Third-Party Plaintiff-
           Appellant,

 v.


 JOE DAVIDSON; BARRY L. ELLER;
 and JERRY CARPENTER,

           Third-Party Defendants,

 and


 W. C. BRADLEY CO. and NEW
 BRAUNFELS SMOKER COMPANY,
 INC.,

           Third-Party Defendants-
           Appellees.

                              ORDER AND JUDGMENT        *




       This order and judgment is not binding precedent, except under the
       *

doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Before BRORBY , McKAY , and MURPHY , Circuit Judges.



       This diversity action pits an estranged barbecue distributor against both its

manufacturer and a purchaser of the manufacturer’s assets. All claims between

the distributor and manufacturer have been settled. However, the distributor

maintains third-party claims against the asset purchaser for tortious interference

and fraudulent conveyance. The district court granted summary judgment in favor

of the purchaser. We exercise jurisdiction pursuant to 28 U.S.C. § 1291.

       We review the district court's grant of summary judgment de novo, applying

the same legal standard used by the district court.        See Byers v. City of

Albuquerque , 
150 F.3d 1271
, 1274 (10th Cir. 1998). Summary judgment is

appropriate “if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.” Fed. R. Civ. P. 56(c). When applying this

standard, we view the evidence and draw reasonable inferences therefrom in the

light most favorable to the nonmoving party.          See Byers , 150 F.3d at 1274.

       Appellant Visiontrade AG is a corporation that imports and distributes

American leisure products in Europe. In 1993, Visiontrade’s Managing Director

discovered a set of barbecue grills produced by O.J. of Stillwater, Inc., under the

                                             -2-
trade name “Oklahoma Joe’s.” Intrigued, Visiontrade began purchasing grills,

sauces, and related goods from OJ and reselling them in Europe. In 1995,

Visiontrade concluded an agreement with OJ to serve as OJ’s exclusive European

distributor for a minimum of six years.

      Initially, the relationship was a resounding success. Although OJ had never

previously sold its products in Europe, its sales surged to $1.3 million in 1997 and

were projected to reach $2.5 million in 1998. Visiontrade became OJ’s largest

customer, and the two began negotiations for an extended, exclusive distribution

agreement.

      However, problems arose both within OJ and between the two companies.

OJ had traditionally strained to obtain adequate financing. In 1995, two investors

loaned substantial sums of money to keep the business afloat; their financing

increased until they eventually became OJ’s sole shareholders. In 1997, new

financial challenges caused OJ to have difficulty in making its payroll. In

addition, OJ was forced to cease production for long periods that year. The

Stillwater National Bank called its loans to OJ, and the investors were required to

pay $1.8 million out of their personal funds. They were either unwilling or

unable to provide the additional money OJ needed to survive.

      Meanwhile, the relationship between OJ and Visiontrade worsened, even as

Visiontrade’s European order flow increased. OJ was almost constantly


                                          -3-
delinquent in meeting its production requirements, shipped containers of

incomplete or defective products, and had trouble tracking Visiontrade’s

accounts. On the other hand, OJ complained that Visiontrade was severely past

due on its payments, adding to OJ’s financial woes. Visiontrade declared OJ in

breach of their agreement. OJ threatened to terminate the agreement altogether.

      OJ approached a number of investors to bolster the company, generally with

little success. Finally, in 1998, OJ concluded an agreement with W. C. Bradley

Co. through its subsidiary, New Braunfels Smoker Company, Inc. While Bradley

was aware of OJ’s relationship with Visiontrade, it nevertheless chose to purchase

OJ’s trade name and a number of other assets from the company to expand its own

distribution in Europe. Bradley loaned OJ $200,000 to keep OJ solvent until the

transaction was finalized. Immediately after the purchase was completed, OJ

terminated its relationship with Visiontrade.

      Litigation commenced between OJ and Visiontrade, resulting in a dismissal

with prejudice of all claims between the two and a settlement in favor of OJ.

Visiontrade asserted a third-party complaint against Bradley on a number of

claims. The district court granted Bradley’s motion for summary judgment, and

Visiontrade appeals. On appeal, only the claims of tortious interference and

fraudulent conveyance persist.

      Under Oklahoma law, a party claiming tortious interference with contract


                                         -4-
or business relations must prove that (1) it has a business or contractual right that

was interfered with; (2) the interference was malicious and wrongful and neither

justified, privileged, nor excusable; and (3) the “damage was proximately

sustained as a result of the complained-of interference.”   Morrow Dev. Corp. v.

American Bank & Trust Co. , 
875 P.2d 411
, 416 (Okla. 1994);      James Energy Co.

v. HCG Energy Corp. , 
847 P.2d 333
, 340 (Okla. 1993). Oklahoma cases describe

proximate cause as “‘the efficient cause which sets in motion the chain of

circumstances leading to the injury.’”    Dirickson v. Mings , 
910 P.2d 1015
, 1019

(Okla. 1996) (quoting Thur v. Dunkley , 
474 P.2d 403
, 405 (Okla. 1970)). After

Bradley has met its burden on motion for summary judgment, Visiontrade must

show that a genuine issue of fact exists as to whether Bradley set in motion the

chain of circumstances leading to OJ’s termination of its agreement with

Visiontrade. The district court held that Visiontrade did not meet its burden to

show proximate cause.

       In its motion for summary judgment, Bradley argued that Visiontrade

presented no evidence indicating that Bradley proximately caused OJ’s eventual

termination with Visiontrade. In addition, Bradley pointed out that, according to

Visiontrade’s own pleadings, OJ was in breach and threatening termination of the

agreement prior to engaging Bradley as a potential investor. Finally, Bradley

showed that OJ had severe financial problems, which caused payroll shortages,


                                            -5-
production shutdowns, and bank foreclosure. The undisputed evidence is that

only when shareholders, banks, and other investors refused to support OJ further,

OJ reached out to Bradley, and Bradley accepted OJ’s offer of sale.

      In its response to Bradley’s motion, Visiontrade declared that Bradley’s

loan to OJ prior to closing the asset purchase had bailed OJ out financially and

that the actual purchase days later was an act of interference which induced OJ to

sever its contractual relations with Visiontrade. Visiontrade seeks to bifurcate the

set of transactions between Bradley and OJ to show that OJ would have been

willing and able to perform the agreement but for Bradley’s “second act” of

interference. However, there is nothing more than speculation to rebut Bradley’s

evidence that Bradley did not tender the loan as a separate act, but in

contemplation and to insure the success of its imminent purchase. Bradley would

not have provided the loan absent the asset purchase.

      Other than the Bradley loan, Visiontrade presented only three “plausible

scenarios” by which OJ could have avoided bankruptcy without selling its assets

to Bradley. These conjectures did not meet Visiontrade’s summary judgment

burden.

      To defeat a properly supported motion for summary judgment, “the

nonmovant cannot rest upon his or her pleadings, but ‘must bring forward specific

facts showing a genuine issue for trial as to those dispositive matters for which he


                                         -6-
or she carries the burden of proof.’”     Simms v. Oklahoma ex rel. Dep’t of Mental

Health & Substance Abuse Serv.       , 
165 F.3d 1321
, 1326 (10th Cir.),   cert denied , __

U.S. __, 
120 S. Ct. 53
(1999) (quoting      Jenkins v. Wood , 
81 F.3d 988
, 990 (10th

Cir. 1996)). In doing so, the nonmovant must identify sufficient evidence

pertinent to a material issue by reference to affidavit, deposition transcript, or

specific exhibit.   See United States v. Simons , 
129 F.3d 1386
, 1388 (10th Cir.

1997). Mere speculation of plausible alternative scenarios will not suffice.        See

Swanson v. Leggett & Platt, Inc.     , 
154 F.3d 730
, 734 (7th Cir. 1998).

       We affirm the district court’s holding that Visiontrade failed to meet its

summary judgment burden. Visiontrade failed to show that a disputed issue of

fact existed as to whether Bradley set into motion the chain of events leading to

OJ’s termination. Speculation as to OJ’s financial options was insufficient, and

facts regarding events prior to and independent of Bradley’s appearance show that

the OJ-Visiontrade relationship was damaged, if not broken, and that OJ was in

desperate financial straits. Visiontrade even fails to show that, but for Bradley’s

involvement, OJ would have performed its obligations under the agreement; it is

entirely irrelevant what OJ   might have done. Visiontrade’s failure to meet its

burden on proximate cause makes it unnecessary to discuss the remaining

elements of tortious interference.      See Koch v. Koch Indus., Inc. , 
203 F.3d 1202
,

1212 (10th Cir.), cert. denied , __ U.S. __, 
121 S. Ct. 302
(2000).


                                             -7-
      Visiontrade’s second claim seeks to void Bradley’s purchase of OJ’s assets

as a fraudulent conveyance. Oklahoma has adopted the Uniform Fraudulent

Transfer Act, O   KLA .   S TAT . tit. 24, §§ 112-123 (2000). The Act voids a “transfer

made or obligation incurred by a debtor [that] is fraudulent as to a creditor . . . .”

tit. 24, § 116. The statute defines a “creditor” as “a person who has a claim.” tit.

24, § 113(4). “Claim” is defined as “a right to payment, whether or not the right

is reduced to judgment . . . .” tit. 24, § 113(3).

      Visiontrade does not have a claim against OJ, and is therefore not a creditor

and not entitled to maintain an action of fraudulent conveyance against Bradley.

All claims asserted against OJ were dismissed with prejudice by the district court

on June 18, 1999, pursuant to a settlement agreement entered into by Visiontrade,

OJ, and the two investors. Visiontrade can no longer claim to be a creditor of OJ.

In fact, OJ is now a creditor of Visiontrade. Pursuant to the agreement, the

district court entered judgment against Visiontrade and in favor of OJ in the

amount of $78,000 plus attorneys’ fees. The dismissal of Visiontrade’s claims

against OJ renders Visiontrade’s claim of fraudulent conveyance moot.

      In the parties’ briefs, there is a great deal of dispute as to whether

Visiontrade adhered to the district court’s Local Rule 56.1(c). Having affirmed

for Bradley and New Braunfels on the merits, we need not reach that issue.

      AFFIRMED.


                                             -8-
      Entered for the Court



      Monroe G. McKay
      Circuit Judge




-9-

Source:  CourtListener

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