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08/21/92 EUGENE BEARD v. SOUTH MAIN BANK

August 21, 1992

EUGENE BEARD, APPELLANT
v.
SOUTH MAIN BANK, APPELLEE



Appeal from the Superior Court of the District of Columbia; (Hon. Noel A. Kramer, Trial Judge)

Before Rogers, Chief Judge, and Terry and Steadman, Associate Judges. Opinion Per Curiam. Concurring opinion by Chief Judge Rogers. Concurring opinion by Associate Judge Terry, with whom Associate Judge Steadman joins as to part II.

The opinion of the court was delivered by: Per Curiam

PER CURIAM: Appellee South Main Bank (SMB), a Texas corporation, filed this action in the Superior Court against appellant Beard, a District of Columbia resident, alleging that Beard owed SMB more than $75,000 as a result of his default on two promissory notes which he had executed and delivered in Texas. Beard moved to dismiss the complaint on the ground of forum non conveniens, but the trial court denied the motion. From that denial Beard brings this appeal. We remand the case to the trial court for further proceedings.

I

On September 10, 1982, Beard executed and delivered to SMB a promissory note in the amount of $12,075.51, payable in full on February 17, 1983. This loan was intended to finance the renovation of an apartment building in Houston, Texas, which Beard owned. As collateral for the loan, Beard assigned a $12,000 certificate of deposit to SMB. The proceeds of the loan ended up in the savings account of Derrick Beard, appellant Beard's nephew, who was apparently acting as the contractor for the renovation project. There is a dispute as to how this money made its way into Derrick Beard's account. Beard asserts that it was mistakenly placed there; SMB maintains, however, that appellant Beard directed it to credit Derrick Beard's account with the loan proceeds.

On December 28, 1982, Beard executed and delivered to SMB a second promissory note in the amount of $11,021.16, also due on February 17, 1983. This loan was secured by the same certificate of deposit used to secure the earlier note. These funds were also deposited in Derrick Beard's account, and, as before, appellant Beard claims that this was done by mistake. It is apparently undisputed that Derrick Beard took the proceeds of both loans without completing the renovation of the apartment building.

Neither loan was repaid by February 17, the maturity date for both notes. On March 22, 1983, Beard executed and delivered to SMB a third note in the amount of $22,500, but this time the loan proceeds were deposited in Beard's own account. This third loan was secured by the same certificate of deposit, as well as a lien on Beard's apartment building. Beard used the proceeds of this loan to pay most of what he owed on the September 10 and December 28 notes.

On July 20, 1983, the due date of the third note, Beard executed and delivered to SMB a fourth promissory note in the amount of $74,485.53. Some of the proceeds from this loan were used to pay the outstanding balance on the March 22 note, and the remainder -- approximately $49,000 -- was deposited in Beard's own account. This fourth note was renewed several times, the final maturity date being January 14, 1985.

On August 10, 1984, Beard executed a fifth and final promissory note. This note, in the amount of $16,199.70, was also payable on January 14, 1985. The proceeds from this loan were deposited in Beard's account. At this point Beard's total indebtedness to SMB on the fourth and fifth notes, the only two that were still outstanding, was $90,685.23. Beard did not pay what he owed on January 14, 1985, nor did he extend either of the two notes.

On January 19, 1985, the apartment building which was serving as partial collateral for the loans burned to the ground. Some time before that Beard's fire insurance on the property had been canceled, and SMB's lien on the property was extinguished by the claims of prior lienholders. Consequently, SMB did not recover any money from the building. On March 31, 1985, SMB set off the accrued value of the certificate of deposit that Beard had pledged as collateral against his outstanding loan balance, leaving an unpaid balance of $76,153.20.

In January 1988 SMB filed a complaint against Beard in the Superior Court of the District of Columbia, seeking the balance due on the two notes. *fn1 Beard filed a pro se answer in which he alleged fraud in the inducement as a defense to liability. Specifically, he claimed that SMB had mistakenly deposited the proceeds of the first two loans in Derrick Beard's account. Beard contended that he had been defrauded by Marvin Joubert, an employee of SMB, into executing the subsequent notes after having been assured that SMB would take responsibility for the funds mistakenly placed in his nephew's account.

After SMB served Beard with a discovery request, Beard retained counsel, who filed a motion to dismiss the complaint on the ground of forum non conveniens. *fn2 In support of his motion, Beard asserted that he needed to secure the live trial testimony of Derrick Beard and Marvin Joubert to support his defense of fraud. He theorized that his nephew and Joubert were involved in a scheme to defraud him into executing the promissory notes. Beard contended that these two witnesses would not appear voluntarily and that their live testimony was critical to his case. He acknowledged that the two men would deny his allegations of fraud, but maintained that the trier of fact would be able to Judge their credibility from their demeanor on the witness stand, and that the case should not be tried in the District of Columbia because the Superior Court could not compel the attendance of these two witnesses.

The statute of limitations applicable to an action on a promissory note in Texas expired on January 14, 1989. On February 9, 1989, SMB filed its opposition to Beard's motion to dismiss, in the course of which SMB noted that Joubert was no longer its employee.

The trial court denied Beard's motion to dismiss in a one-sentence order. Beard appeals. *fn3

II

The decision to grant or deny a motion to dismiss a complaint on the ground of forum non conveniens *fn4 is committed to the sound discretion of the trial court. Cresta v. Neurology Center, 557 A.2d 156, 159 (D.C. 1989) (citing cases). Such decisions "are entitled to receive considerable deference from this court." Jenkins v. Smith, supra note 3, 535 A.2d at 1369. Although on appeal we must make our own independent evaluation of the "public" and "private" factors discussed in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509,67 S.Ct. 839, 843,91 L.Ed. 1055 (1947), we nevertheless "will not reverse such a ruling unless presented with clear evidence that the trial court abused its broad discretion." Jenkins v. Smith, supra note 3, 535 A.2d at 1369 (citations omitted).

Our review in this case is severely hindered by the trial court's failure to state on the record the reasons for its decision. The order denying the motion to dismiss contained no statement of reasons and was not accompanied by an opinion, nor did it incorporate by reference the arguments advanced in SMB's opposition. Furthermore, there was no hearing at which the court might have given us some insight into the basis for its ruling. Although we have said that we "may examine the record and infer the reasoning upon which the trial court made its determination" when we review such an exercise of discretion, Johnson v. United States, 398 A.2d 354, 366 (D.C. 1979), it should normally be necessary to do so only when the trial court has been forced to "make rulings off the cuff . . . in the press and urgency of a trial . . . ." Id. at 365 n.8. In this case, however, there was no such "press and urgency," and the decision to be made was dependent on a number of discrete factors and could have gone either way. In such cases the better practice would be for the trial court to place on the record the reasons for its ruling, either orally from the bench or in a written order. By doing so, the court can obviate a remand ...


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