Case 08-02077 Doc 24 Filed 12/29/08 Entered 12/29/08 11:07:36 Desc Main

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RONALD S. GEORGE, P.A.

389 N. Mink Creek Road
Pocatello, ID 83204
(208) 232-2515

Ronald George, #7721 attorney Wade Sleater

UNITED STATES BANKRUPTCY COURT

CENTRAL DISTRICT OF UTAH

In re:
Chapter 7
BEDROCK MARKETING, LLC Bankruptcy No. 08-20308

Honorable
Gary E. Jubber, Chapter 7 Bankruptcy Trustee of Bedrock William T. Thurman
Marketing LLC, and Chapter 7 Bankruptcy Trustee of
Enlightened Management, LLC. Adversary No. 08-02077

v.

WESTON WADE SLEATER

MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT

I. CONTESTED FACTS.

A. Disputes to Plaintiffs Statement of Undisputed Material Facts.

Defendant contests plaintiffs’ STATEMENT OF UNDISPUTED MATERIAL FACTS

below. Defendant addresses plaintiffs’ STATEMENT OF UNDISPUTED MATERIAL FACTS,

paragraphs 1-11. All facts disputing plaintiffs’ claims are found in the Sworn Declaration of

Weston Wade Sleater that is attached to this memorandum as Exhibit “A”. All references will be

(Weston Declaration par. 1-24)

Plaintiffs’ Undisputed Facts paragraph 1. Defendant does not contest that beginning
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in June 2006 plaintiff advanced funds in excess of $4 million, but disputes the balance of the

allegations, and disputes that any funds were advanced to Sleater or his affiliate:

A. All funds were advanced only to Atlas Capital, LLC. (Weston Declaration

par. 4,5,6,7)

B. Sleater owes nothing because Atlas Capital was the maker of the note or in

the alternative that there was no consideration for the note. (Weston Declaration par. 7, 8,9,10,

11, 12, 13, 14, 15, 16,17,20,21,22,23,24; Also see copies of the notes attached to plaintiff’s

Motion for Summary Judgment as Exhibits “A” and “B” )

C. Sleater owes nothing because there was no consideration for the guarantee of

Sleater. (Weston Declaration par.7,8,9,10,11,12,13,14,15,16,17, 20,21,22,23,24)

Plaintiffs’ Undisputed Facts paragraph 2. Sleater admits that he signed the notes, but claims

that he executed the note as the maker only as the manager of Atlas Capital, LLC. Sleater admits

that he signed a guarantee of the note, but claims there is no consideration for the making of the

note of signing the guarantee. (Weston Declaration par. par.(7,8,9,10,11,12,13,14, 15,16, 17,20,

21,22,23,24)

Plaintiffs’ Undisputed Facts paragraph 3. Sleater admits that plaintiffs correctly specify the

terms of the note but deny any obligation pursuant to any of the terms specified. (Weston

Declaration par. 3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24)

Plaintiffs’ Undisputed Facts paragraph 4. Admit these allegations.

Plaintiffs’ Undisputed Facts paragraph 5. Admit that there was a balance owed as specified,

but state that the balance was owed only by Atlas Capital, LLC, and that nothing was owed by

Sleater. (Weston Declaration par. 3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24 )

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Plaintiffs’ Undisputed Facts paragraph 6. Admit that plaintiffs advanced funds in the amount

specified, but only to Atlas Capital, LLC, and not to Sleater and that Sleater has no legal

obligation for the funds advanced. (Weston Declaration par. 3,4,5,6,7,8,9,10,11,12,13,14,15,16,

17,18,19,20,21,22,23,24 )

Plaintiffs’ Undisputed Facts paragraph 7. Sleater admits that he signed the notes, but

claims that he executed the note as the maker only as the manager of Atlas Capital, LLC. Sleater

admits that he signed a guarantee of the note, but claims there is no consideration for the making

of the note of signing the guarantee. (Weston Declaration par. 3,4,5,6,7,8,9,10,11,12,13,14,15,

16,17, 18,19,20,21,22,23,24 )

Plaintiffs’ Undisputed Facts paragraph 8. Sleater admits that plaintiffs correctly specify the

terms of the note but deny any obligation pursuant to any of the terms specified. (Weston

Declaration par. 3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24)

Plaintiffs’ Undisputed Facts paragraph 9. Admit that there was a balance owed as specified,

but state that the balance was owed only by Atlas Capital, LLC, and that nothing was owed by

Sleater. (Weston Declaration par. 3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24)

Plaintiff’ Undisputed Facts paragraph 10. Admit that after March 15, 2007, Enlightened

made additional advance of $355,000.00, but state that such advances were made only to Atlas

Capital, LLC, and not to Sleater and that Sleater has no legal liability for such advances.

(Weston Declaration par. 3,6,7,12, 13, 14, 15,16,17,)

Plaintiffs’ Undisputed Facts paragraph 11. Admit that the balance owed to enlightened on

November 30, 2008, is the amount of $410,776.79, but that amount is owed only by Atlas

Capital, LLC, and not by Sleater. (Weston Declaration par.) 3,6,7,12, 13, 14, 15,16,17 )

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B. Material Disputed Facts that Preclude Summary Judgment.

1. Sleater is not the maker of the Bedrock or Enlightened Notes. (Weston

Declaration par. 3 ,4, 5, 7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,)

2. There is a lack of consideration for the making of the Bedrock or

Enlightened Notes by Sleater.(Weston Declaration par. 7,8,9,12,13,14,15,16,17,20,21,24)

3. There is a lack of consideration for Sleater’s guarantee of the Bedrock

or Enlightened notes.(Weston Declaration par. 7,8,9,12,13,14,15,16,17,20,21,22,23)

4. Sleater was not unjustly enriched and there is no claim for unjust

enrichment against Sleater. (Weston Declaration par. 6,7,12,13,14,15,)

5. All advances were made to Atlas Capital, LLC, which was a limited

liability company with an existence separate and apart from Sleater. (Weston Declaration par.

2,18,19,)

ARGUMENT

1. ATLAS WAS THE MAKER OF THE NOTES.

Although on the face of the notes it appears that Sleater signed the note for Atlas

Marketing, LC and Wade Sleater, Mr. Sleater states he did not intend to personally be a maker of

the note and that no such intention was evidenced by Bedrock or Enlightened. The strongest

evidence that he personally could not be a maker of the note is the guarantee by Sleater of the

very same note. In the case of Boise Cascade v. Stonewood, 655 P.2d 668 (Utah 1982), a

guarantor of a corporate note attempted to claim that he signed the guarantee in his corporate

capacity. The court dismissed this claim by stating that, “...otherwise the liability would result in

an absurdity, i.e., that the principal obligor also was the guarantor of his own obligation.” The

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reason it would be an absurdity is that one cannot guarantee their own note because by definition

a guarantee is of the obligation of another.

2. THERE MUST BE CONSIDERATION FOR A NOTE OR A GUARANTEE.

There must be consideration for a promissory note the same as any other contract.

Alexander v. Delacruz, 545 P.2d 518 (Utah 1976). Any consideration that would support and

ordinary contract will support a promissory note. id. A guarantee must also be supported by

consideration. Bray Lines, Inc. v. Utah Carriers, 739 P.2d 1115 (Utah 1987). Therefore even if

it is found that Sleater is a maker of the Bedrock and Enlightened notes he would not be liable on

the notes either as a maker or guarantor if there is lack of consideration. The mere fact that one

man promises something to another creates no legal duty and makes no legal remedy available in

case of non-performance." 1 A. Corbin, Corbin on Contracts § 110 (1963). Performance or a

returned promise must be bargained for." Miller v. Miller, 664 P.2d at 41 (citing Restatement

(Second) of Contracts § 71 at 172 (1981)).

It is the position of Sleater that he has no legal obligation on the notes and that the only

party with a legal obligation is Atlas Capital, LLC. As set out in Sleater’s declaration Bedrock

and Enlightened desired to and began advancing funds to Atlas Capital, LLC, in June, 2006.

From June, 2006, until March, 2007, the agreement between the parties was oral. In March,

2007, counsel for Bedrock and Enlightened sent two notes to Mr. Sleater for signature. By

mistake counsel used the name Atlas Marketing, LLC, instead of Atlas Capital, LLC.

The two notes reflected the terms of repayment originally orally agreed to, but also

contained a new terms that was never agreed to. The two notes contained a guarantee by Mr.

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Sleater and appears to show Sleater as well as Atlas as makers of the notes. Although Sleater has

the burden to show lack of consideration, the presumption of consideration exists only so long as

there is no evidence of lack of consideration. Dementas v. Estate of Jack Tallas, 764 P.2d 628

(Utah 1988) W hen evidence tending to prove lack of consideration is introduced, the issue of

whether there was valid consideration becomes a question of fact for the trier of fact. Id. Any

past consideration to Sleater, if any, is not sufficient because there was no bargaining at the time

the note was presented. Id.. Extrinsic evidence is allowed to show lack of consideration. Id.,

Wagner v. Bonucelli, 239 So.2d 619, 620 (Fla. 4th DCA 1970)

Summary judgment for the payee on promissory note cannot granted unless the payee

conclusively refutes the affirmative defense of lack of consideration. Charron v. Coachmen

Industries, Inc., 417 So.2d 1145 (Fla. 5th DCA 1982) Consideration is an act or promise,

bargained for and given in exchange for a promise. Resource Management Co. v. Weston, 706

P.2d 1028 (Utah 1985) Promises made by a party pursuant to a bilateral contract to do an act or

to forbear from doing an act that would be detrimental to the promisor or beneficial to the

promisee may constitute the consideration for the other's promise. Sugarhouse Finance Co. v.

Anderson, Utah, 610 P.2d 1369, 1372 (1980); Allen v. Rose Park Pharmacy, 120 Utah 608, 613,

237 P.2d 823, 825 (1951)

3. THERE WAS NO UNJUST ENRICHMENT.

In order to prove unjust enrichment plaintiff must prove, (1) a benefit conferred on one

person by another; (2) an appreciation or knowledge by the conferee of the benefit; and (3) the

acceptance or retention by the conferee of the benefit under such circumstances as to make it

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inequitable for the conferee to retain the benefit without payment of its value. SLW/Utah, Jeffs

v. Stubbs, 970 P.2d 1234 (Utah 1998) The $355,000.00, on which the unjust enrichment claim

is based, was loaned to Atlas Capital, LLC, just as all previously funds, and not to Sleater.

Sleater received none on these funds and did not benefit from any of the funds.

4. CONCLUSION.

Sleater was not the maker of the note and even if he is found to be the maker of the note

there was no consideration for Sleater making the note or guaranteeing the note. No benefit

flowed to Sleater and therefore there is no unjust enrichment. There are disputed material facts

that would preclude granting summary judgment to plaintiffs and their motion should be denied.

DATED: December 29, 2008.

/s/ Ronald George, attorney for Sleater

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CERTIFICATE OF SERVICE

I certify that on December 29, 2008, the MEMORANDUM IN OPPOSITION TO

SUMMARY JUDGMENT and DECLARATION UNDER OATH OF WESTON WADE
SLEATER IN SUPPORT OF OPPOSITION TO MOTION FOR SUMMARY
JUDGMENT was served by the VIA/ECF as follows:

Gary E. Jubber
Douglass J. Payne
Clint R. Hansen
FABIAN & CLENDENIN, a Professional Corporation
215 S. State St.
Salt Lake City, UT 84111

/s/ Ronald George