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In Re Estate of Griffith

OPINION FILED DECEMBER 12, 1986.

IN RE ESTATE OF GLEN DALE GRIFFITH, DECEASED (BOBBIE CALCOTE, ET AL., CLAIMANTS-APPELLANTS,

v.

ESTATE OF GLEN DALE GRIFFITH, DECEASED, RESPONDENT-APPELLEE).



Appeal from the Circuit Court of Jasper County; the Hon. Richard G. Hodson, Judge, presiding.

JUSTICE JONES DELIVERED THE OPINION OF THE COURT:

The instant appeal arises out of certain estate claims filed by Frank and Bobbie Calcote against the estate of the decedent, Glen Dale Griffith, who, during his lifetime, was a partner with Frank Calcote in a partnership for the production of oil and gas. The trial court, finding that the claims of Bobbie Calcote for moneys advanced to the partnership and for expenses and salary owed by the partnership were not legitimate partnership debts, ruled against Bobbie Calcote as to those claims. On appeal from this judgment denying her claims, Bobbie Calcote contends that the trial court's ruling was against the manifest weight of the evidence where there was no showing that she was either paid back for moneys advanced to the partnership or compensated for services rendered to the partnership. We affirm.

In May or June 1979 the decedent and Frank Calcote, Bobbie Calcote's husband, entered into a partnership named Glenco pursuant to an oral agreement. The purpose of this partnership was to obtain oil and gas leases, secure investors for drilling oil and gas wells on these leases, and drill, complete, and operate such wells for the benefit of the partnership and the investors. The partners agreed to share income and expenses of the partnership on a 50/50 basis.

The partnership began to drill and produce oil wells, drilling approximately 22 wells in the partnership name. The partners subsequently had a "falling out," and on July 3, 1981, the decedent, Glen Dale Griffith, filed a complaint for dissolution of the partnership. The decedent died approximately nine months later on April 2, 1982, while the action for dissolution of the partnership was still pending.

Frank and Bobbie Calcote subsequently filed joint estate claims against the estate of the decedent for moneys allegedly owed to them by the partnership as well as by the decedent. Items one and three of the joint claims related to Bobbie Calcote's claims for "1. Moneys advanced to Glenco Petroleum [sic]" in the amount of $165,167.50 and "3. Expenses and salary due Bobbie Calcote from Glenco Petroleum [sic]" in the amount of $63,937.50. The estate filed a petition to wind up the affairs of Glenco, and trial was had simultaneously on the Calcotes' estate claims and the petition to wind up the affairs of Glenco.

At trial Frank Calcote, the decedent's partner in Glenco, testified that he and the decedent had operated partnership leases together from May or June 1979 until October 1980 when they had had a dispute regarding the partnership. Frank Calcote, who had possession of partnership records, had kept track of operating expenses from the time the first well went on pump on November 4, 1979. He had not billed investors for operating expenses on this or other wells drilled in 1980 until November 19, 1980. Unbilled operating expenses as of the date of the decedent's death on April 2, 1982, totaled $168,629.53, and this amount was uncollected as of the time of trial.

Frank Calcote testified that from the fall of 1981 to the present, he had deposited checks from his wife, Bobbie Calcote, into Glenco's banking account. It was his understanding that Bobbie Calcote would be repaid for these amounts, but no goods or services had been provided to Bobbie Calcote from Glenco during this time.

Frank Calcote testified further that he and his wife had performed secretarial services for Glenco in preparing mailings to potential investors before wells were drilled by the partnership. Approximately 100 mailings, consisting of 50 to 60 pages each, had been made on the shallow wells, and an average of 175 to 200 mailings had been made on the deeper wells. During the year prior to trial, the partnership had been charging investors a management fee of $100 per month and a bookkeeping fee of $75 per month for each producing well, plus $30 to $60 per month in miscellaneous expenses. The partnership had also been charging investors $22 per load to haul salt water away, which amount was paid to Bobbie Calcote, who owned the truck used for this purpose. The billing and collection of operating expenses on partnership wells had been turned over to Oil Producers Association, Inc., which would buy the oil from Glenco's wells and subtract the investors' portion of operating expenses from the oil proceeds.

Bobbie Calcote, Frank Calcote's wife, testified that the amounts collected from Glenco investors by Oil Producers Association, Inc., were paid to Dempsey Management, an oil well management service owned solely by Bobbie Calcote. For its services, Dempsey Management received both the $100 management fee and the $75 bookkeeping fee charged to Glenco investors. Dempsey Management had an oral management agreement with Frank Calcote by which it was responsible for all operating debts of Glenco.

Bobbie Calcote testified that beginning on December 31, 1981, she had made loans to Glenco out of her personal account. As evidence of these loans, Bobbie Calcote introduced cancelled checks dating from December 31, 1981, to January 7, 1984. Six of the checks were dated prior to the decedent's death on April 2, 1982, while the remaining 31 checks for which she sought reimbursement from the partnership were dated after the decedent's death. The checks were made payable to "Glenco Petroleum" and signed by Bobbie Calcote. In some instances the checks or deposit slips bore notations indicating that they were personal loans or loans to pay bills. Attached to the cancelled checks were deposit slips showing deposits into the Glenco account of the same date. Bobbie Calcote introduced nine other checks written from her personal account to various third parties, which she testified were for the payment of Glenco bills. These checks were dated from December 2, 1982, to May 3, 1984.

Bobbie Calcote additionally introduced 12 demand notes bearing the signature of "Glenco Petroleum, Frank Calcote, and Frank Calcote." These notes were dated from December 31, 1981, to October 25, 1983, and, except for the date of the first note, did not correspond either in date or amount to the checks written by Bobbie Calcote to Glenco as "personal loans." Bobbie Calcote testified that these notes, which were not produced until the time of trial, were from her personal records and that there were no copies of the notes in the records of Glenco. The note of December 31, 1981, included $10,000 that Bobbie Calcote had loaned to "Glenco and Frank Calcote" to buy out an investor's interest. This amount was to have come from each partner's funds individually, and Bobbie Calcote testified that this $10,000 never went through a partnership account.

On cross-examination Bobbie Calcote stated that she had first become aware of the decedent's suit to dissolve the partnership in October 1981 before she had begun making loans to the partnership in December 1981. None of the demand notes from the partnership and Frank Calcote had been signed by the decedent, and she at no time during the decedent's lifetime had received any payment on any of the alleged loans or any of the salary allegedly owed to her by the partnership. Bobbie Calcote had first come into possession of the partnership records in October 1980, and she and her husband had been responsible for keeping the books since that time.

Regarding the notations on the cancelled checks indicating that they were personal loans to the partnership, Bobbie Calcote testified that she "could have added" the notations later when she had gone through her checks to clarify them for tax purposes. On several of the checks the notation was in blue ink while the check was written out in black ink. Bobbie Calcote had at no time consulted with the administrator of the decedent's estate about the loans made to the partnership.

Bobbie Calcote testified further that the services that she had performed for the partnership included typing, answering the telephone, running copies, and fixing reports to go to the shareholders with regard to drilling and completion. In addition, she had furnished all of the paper for the reports and had provided money for entertaining investors as well as for traveling expenses. She stated that approximately 100 reports and solicitations of 8 to 10 pages each had been mailed out on the wells drilled to depths of 2,700 feet, while approximately 300 mailings of the same length had been made on the wells drilled to depths of 4,200 feet. On one of the wells drilled in 1980, the report sent to investors estimated the cost of "administrative [sic] and office supplies" at $1,500 to $2,500. Bobbie ...


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