Norman v. Trison Development Corp.

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Norman v. Trison Development Corp.
1992 OK 67
832 P.2d 6
63 OBJ 1444
Case Number: 71452
Decided: 05/12/1992
Supreme Court of Oklahoma


Appeal from the District Court, Oklahoma County, Charles L. Owens, J.

Certiorari to the Court of Appeals, Division 1.

¶0 In an action for damages against a discharged receiver and apartment owners for harm occasioned by their negligence in maintaining the apartment premises, the District Court, Oklahoma County, Charles L. Owens, Judge, gave summary judgment to the receiver. The Court of Appeals reversed. On certiorari previously granted,


Arthur S. Bay, Oklahoma City, for plaintiff-appellant.

W.D. Greenwood, Brently C. Olsson, Huckaby, Fleming, Frailey, Chaffin & Darrah, Oklahoma City, for defendant-appellee.

OPALA, Chief Justice.

[832 P.2d 7]

¶1 The dispositive issue on certiorari is whether the absence of notice to an unknown or unascertainable tort plaintiff, who claims to have sustained an injury on property in receivership as a result of negligence in its maintenance, requires us in this case to condemn as facially void the order discharging the receiver and terminating the receivership. We answer in the negative, holding that the discharge and termination order is not subject to a collateral attack on grounds of facial infirmity for want of notice.


¶2 In a foreclosure suit the trial court appointed Trison Development Corporation [Trison] as receiver to manage the Chateau Gardens Apartments on May 23, 1986. The property was sold at a sheriff's sale on March 17, 1987 and the sale was confirmed March 31, 1987. The trial court discharged the receiver and terminated the receivership on May 13, 1987. Before the sale's confirmation, Ronald Norman [tort plaintiff or Norman], plaintiff, claims to have sustained injuries on March 23, 1987 when he fell down a stairway at the apartment complex. The record is clear that Norman was unaware of the then pending receivership. Norman concedes in his appellate brief that the receiver did not know of his on-the-premises injury.


¶3 After Trison's discharge qua receiver, Norman brought an action against Trison and the apartment owners for harm occasioned by the receiver's alleged negligent maintenance of the stairs. Trison moved for summary judgment, arguing that: (1) Norman failed to state a claim upon which relief can be granted, because Trison had been discharged and the receivership terminated, thus putting an end to the receiver's liability qua receiver; (2) Trison was immune from suit qua receiver inasmuch as a receiver is an officer of the court who has no personal liability, and (3) as a court-appointed receiver, Trison was an instrumentality of the State of Oklahoma and thus fell within the protection of the Governmental Tort Claims Act.

[832 P.2d 8]



¶4 Under our pleading regime,


¶5 In support of Trison's argument that no claim was maintainable against it qua receiver, because the trial court had terminated the receivership and discharged it as receiver, Trison appended to its motion for summary judgment copies of the (1) order appointing receiver, (2) order confirming sheriff's sale, and (3) order approving receiver's final report, discharge of receiver, release of surety, and termination of receivership. Norman responded that the receiver's discharge does not bar a tort claim for harm occasioned by negligence in maintaining the premises when notice of the application for discharge was neither given nor attempted to be made upon a party injured by a receiver's negligence.


¶6 We hold the trial court did not err in giving summary judgment to the discharged receiver.



¶7 When property or a business is placed in receivership, the court takes possession of the assets through its court-appointed receiver. A receiver is an officer of the court


¶8 The purpose and effect of a receiver's discharge and the receivership's termination is to release the receiver in his official capacity.

¶9 Much like any other judgment or order, receivership proceedings may be reopened and a discharge order vacated, inter alia, on § 1031(Third) grounds



¶10 This tort case comes postured as a collateral attack on the receiver's prior discharge order entered in another proceeding - the foreclosure action. The tort plaintiff seeks to avoid the legal effect of this order by asserting that it is void on the face of the proceedings for lack of advance notice to him. A decision is facially invalid if, on an inspection of the record proper, it is apparent that one or more of the requisite jurisdictional elements - the subject matter or in personam cognizance or the court's power to render a particular decision - is shown to have been absent.


¶11 Whether a tort claimant against the receiver may be entitled to notice of discharge proceedings depends on the circumstances surrounding the claim and on whether lack of notice would have an adverse effect on his interest.


¶12 When an interested party is known or ascertainable from the face of receivership proceedings, lack of notice to that party would facially invalidate a receiver's discharge. From an examination of the receivership proceedings included in this record,

¶13 The validity of the receiver's discharge was not properly litigable in this tort case. The face of the receivership proceedings does not make it apparent that the receiver's discharge is facially void as to Norman. We hence hold that because Norman, the tort plaintiff, was an utter stranger to the receivership proceedings - neither a party nor a person whose identity and claim are apparent from its face - lack of notice upon him did not render the discharge and termination order facially infirm.

¶14 We do not hold today that Norman lacks standing to invoke the § 1031 vacation remedy,

¶15 Certiorari previously granted; the opinion of the Court of Appeals is vacated; the trial court's summary judgment is affirmed.


¶17 KAUGER, J., concurs in result;

¶18 HODGES, V.C.J., and HARGRAVE, J., dissent.


1 See appellant's brief in chief, p. 8; appellee's answer brief, p. 4. Admissions in an appellate brief may supplement the appellate record. Kwikset/Emhart v. Mayberry, Okl., 800 P.2d 239, 240 n. 1 (1990); Reeves v. Agee, Okl., 769 P.2d 745, 754 (1989); Womack v. City of Oklahoma City, Okl., 726 P.2d 1178, 1181 n. 8 (1986).

2 51 O.S. 1991 §§ 151 et seq., 152(10).

3 The Court of Appeals adopted the rationale of Miller v. Everest, 212 N.W.2d 522 (Iowa 1973). Miller involved a tort claim against a discharged receiver. A tenant of a building in receivership had died of injuries sustained in a fall on ice in the building parking lot. The receiver was discharged before the executor brought suit. The trial court dismissed the action because the defendant, qua receiver, could not be sued after he had been discharged, and in his personal capacity he was not liable for passive negligence. The Iowa Supreme Court held that the discharge order was void as to the executor for want of notice. To hold a tort claimant barred under the circumstances of the case, the court reasoned, would "work injustice and cannot withstand close scrutiny. . . ." Id. 212 N.W.2d at 524. The lower court's decision exonerating the receiver from personal liability was affirmed.

4 Although the receiver's individual liability was not explicitly raised by the amended petition, Trison argued in its summary judgment motion that it was not personally liable. The Court of appeals agreed, holding that the receiver was not answerable in its individual capacity for the harm occasioned by the receiver's alleged negligence in maintaining the apartment complex stairway. Because Norman did not seek certiorari, the issue of the receiver's personal liability is not before us today. A party seeking corrective relief from an adverse Court of Appeals' opinion, if unsuccessful on rehearing or if no rehearing is sought, must seek further review by certiorari in this court. Teel v. Teel, Okl., 766 P.2d 994, 997 n. 4 (1988); Ford v. Ford, Okl., 766 P.2d 950, 952 n. 1 (1988); Johnson v. Wade, Okl., 642 P.2d 255, 257 (1982). The only issues properly tendered for our review here are those presented in the petition for certiorari, which, in this case, addresses solely the discharged receiver's liability qua receiver.

5 The Oklahoma Pleading Code, 12 O.S. 1991 §§ 2001 et seq.

6 The terms of 12 O.S. 1991 § 2012 (B) provide in pertinent part:

"* * * If, on a motion asserting the defense numbered 6 of this subsection to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by the rules for summary judgment. * * *" (Emphasis added.)

See in this connection, Silver v. Slusher, Okl., 770 P.2d 878, 881 n. 8 (1988).

7 Norman's response had appended to it a copy of the (1) docket pages in the foreclosure suit, (2) sheriff's return as to the time and manner of executing the order of sale, (3) affidavit of Ronald Norman, (4) motion to confirm sale, (5) motion for approval of final report and account, discharge of receiver, release of surety and termination of receivership, and (6) notice of motion for discharge of receiver, release of surety and termination of receivership to all parties and their counsel of record.

8 We need not, and do not, address here the issue of the owner's liability for the harm occasioned to the tort plaintiff.

9 Eckles v. Busey, 191 Okl. 644, 132 P.2d 344, 346 (1942); 1 CLARK LAW OF RECEIVERS § 11(a) at 13-14 (1959).

10 Miller v. Thompson, 91 Okl. 138, 216 P. 641, 644 (1923); Flynn v. Lowrance, 110 Okl. 150, 236 P. 594, 597 (1925).

11 In McNulta v. Lochridge, 141 U.S. 327, 12 S. Ct. 11, 35 L. Ed. 796 (1891), the Court said "[a]ctions against the receiver are in law actions against the receivership, or the funds in the hands of the receiver, and his contracts, misfeasances, negligences and liabilities are official and not personal, and judgments against him as receiver are payable only from the funds in his hands." Id. 141 U.S. at 332, 12 S. Ct. at 13.

12 McNulta v. Lochridge, supra note 11; Hanlon v. Smith, 175 Fed. 192, 197 (N.D.Iowa 1909); Peters v. Plains Petroleum Co., 43 F.2d 49, 50 (10th Cir. 1930); 3 CLARK, supra note 9, § 696 at 1281.

13 Hanlon v. Smith, supra note 12; Smith v. Jones Lumber & Mercantile Co., 200 Fed. 647, 650 (D.Ct.W.D.Wis. 1912); 2 CLARK, supra note 9, § 422 at 708; 3 CLARK, supra note 9, § 92.1 (b) at 1276; Best & Russell Cigar Co. v. William Reese Co., 210 S.W. 317, 318 (Tex.Civ.App. 1919).

14 The terms of 12 O.S. 1991 § 1031 provide:

"The district court shall have power to vacate or modify its own judgments or orders within the times prescribed hereafter:

* * * * * *

Third, For mistake, neglect or omission of the clerk or irregularity in obtaining a judgment or order. * * *" (Emphasis added.)

The pertinent terms of 12 O.S. 1991 § 1038 are:

"* * * Proceedings [to vacate or modify a judgment or order] for the causes mentioned in paragraphs 3 and 6 of Section 1031 of this title, shall be [commenced] within three (3) years. . . . A void judgment may be vacated at any time, on motion of a party, or any person affected thereby."

15 We need not, and do not, address here generally the issue whether an unknown or unascertainable tort plaintiff who had no personal notice of the receivership's termination is in a class of persons entitled to reopen the receivership proceedings. See in this connection Tulsa Professional Collection Services v. Pope, 485 U.S. 478, 108 S. Ct. 1340, 99 L. Ed. 2d 565 (1988); Matter of Estate of Pope, Okl., 808 P.2d 640 (1991).

16 Heiman v. Atlantic Richfield Co., Okl., 807 P.2d 257, 260 n. 11 (1991); Capitol Federal Savings Bank v. Bewley, Okl., 795 P.2d 1051, 1054 (1990); Hough v. Hough, Okl., 772 P.2d 920, 921 (1989); Mayhue v. Mayhue, Okl., 706 P.2d 890, 893 n. 8 (1985); Scoufos v. Fuller, Okl., 280 P.2d 720, 723 (1955); State ex rel Commissioners of Land Office v. Keller, Okl., 264 P.2d 742, 747-748 (1953).

17 12 O.S. 1991 § 1038 , supra note 14; Hough v. Hough, supra note 16.

18 Scoufos v. Fuller, supra note 16 at 725; Hough v. Hough, supra note 16 at 921; Capitol Federal Savings Bank v. Bewley, supra note 16 at 1054. If extrinsic evidence is necessary to show a judgment's invalidity, a motion to vacate must be presented within three years after entry of the decision. 12 O.S. 1991 § 1038 , supra note 14.

19 Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 657, 94 L. Ed. 865 (1950).

20 For some examples of persons who fall within a class per se entitled to notice of proceedings because they may be adversely affected in their property interests, see (1) Tulsa Professional Collection Services v. Pope, supra note 15, 485 U.S. at 490-491, 108 S. Ct. at 1348; Matter of Estate of Pope, supra note 15 (a creditor's claim in a probate matter is a property interest protectible by the Due Process Clause); (2) Mullane v. Central Hanover Bank & Trust Co., supra note 19, (known trust beneficiaries are entitled to notice of an action that settles their rights against the plaintiff trustee); (3) Harry R. Carlile Trust v. Cotton Petroleum, Okl., 732 P.2d 438, 443 (1986) (mineral interest owners are constitutionally entitled to notice when the formation of a drilling and spacing unit is sought); (4) Cate v. Archon Oil Co., Inc., Okl., 695 P.2d 1352 (1985) (owner of oil and gas lease is entitled to notice before the property can be sold at a sheriff's sale); (5) Prickett v. Moore, Okl., 684 P.2d 1191, 1193-1194 (1984) (a sui juris joint tenant is entitled to notice in a guardianship proceeding of an incompetent joint tenant's motion to partition the joint tenant estate).

21 Cate v. Archon Oil Co., Inc., supra note 20 at 1356; Jackson v. Ind. School Dist. No. 16 of Payne Co., Okl., 648 P.2d 26, 30 (1982).

22 Boddie v. Connecticut, 401 U.S. 371, 378, 91 S. Ct. 780, 786, 28 L. Ed. 2d 113 (1971); Bomford v. Socony Mobil Oil Co., Okl., 440 P.2d 713, 718 (1968); Cate v. Archon Oil Co., Inc., supra note 20, at 1356, n. 11.

23 For cases in which a decision was deemed vulnerable to a collateral attack because notice was not given to persons who, from the face of the proceedings, appeared to be adversely affected parties, see Prickett v. Moore, supra note 20 at 1193-1194 (in an appeal by a sui juris joint tenant from a partition decree with severance of the joint tenancy estate, we held that an order in guardianship authorizing partition of an incompetent ward's joint tenancy estate was facially void for lack of notice to the sui juris joint tenant); Harry R. Carlile Trust v. Cotton Petroleum, supra note 20 at 441-442 (in a quiet title suit, a corporation commission spacing order was successfully attacked as facially invalid by mineral interest owners who had been served solely by publication notice in the Corporation Commission spacing proceedings).

24 For the only paperwork available for our review from the receivership proceedings (which was appended to the summary judgment motion and response), see supra note 7 and the accompanying text.

25 The tort claimant's interest here is the right to recover money, a chose in action, which under Oklahoma law is considered intangible personal property. Shebester v. Triple Crown Insurers, Okl., 826 P.2d 603, 608 n. 16 (1992); Perkins v. Oklahoma Tax Commission, Okl., 428 P.2d 328 (1967) (syllabus 1). The terms of 60 O.S. 1991 § 312 provide: "A thing in action is a right to recover money or other personal property, by judicial proceedings."

26 By a "lawyer's argument" is meant an unsworn in-court statement of a forensic advocate. It does not rise to evidence or to a stipulated fact. State ex rel. Oklahoma Bar Ass'n v. Lacoste, Okl., 813 P.2d 501, 506 (1991).

27 For the pertinent text of 12 O.S. 1991 § 1031 , see supra note 14.