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SLAGELL v. BONTRAGER

August 26, 1985

GOLDIE SLAGELL, Plaintiff
v.
JOHN BONTRAGER, JR. t/d/b/a OKLAHOMA ENERGY INVESTMENTS, Defendant



The opinion of the court was delivered by: WEBER

 AND NOW this - of August, 1985, in accordance with the accompanying Opinion IT IS ORDERED that defendant's motion for summary judgment is GRANTED, and the within action is DISMISSED with prejudice. This ruling renders the pending discovery motion moot.

 GERALD J. WEBER United States District Judge.

 WEBER, D. J.

 In this action alleging a violation of Section 12(1) of the Securities Act, 15 U.S.C. § 77l(1), defendant has filed a motion for summary judgment with an affidavit claiming that the action is barred by the statute of limitations, that the plaintiff's complaint is insufficient, and that venue is improper. Plaintiff has responded in opposition to this motion and the issues have been fully briefed. Since we believe that the statute of limitations argument is dispositive we will deal solely with that issue.

 Plaintiff's complaint alleges that plaintiff purchased a security from defendant on June 9, 1981 for $12,000 which security was not registered with the Securities Exchange Commission, and on which plaintiff has received no income. Plaintiff filed her complaint on June 8, 1984.

 Defendant has filed evidentiary material to show that plaintiff actually purchased and paid for the security on April 29, 1981. Furthermore, the facts necessary to decide this motion are stated in the affidavits of John Bontrager, Jr. and Goldie Slagell, and are essentially uncontroverted:

 
1) In April 1981, H. Ralph Hernley approached Goldie Slagell regarding an investment opportunity in an oil and gas limited partnership formed by Mr. Bontrager;
 
2) On April 29, 1981, pursuant to Mr. Hernley's advice, Goldie Slagell sent her check for $12,000 to John Bontrager, Jr. at his address in Alden, New York;
 
3) On or about June 9, 1981, John Bontrager, Jr. sent to Goldie Slagell a copy of the Oklahoma Energy Investment Contract Participating and Operating Agreement by United States mail.
 
4) Before that time Goldie Slagell had received no prospectus or written offering statement of any kind regarding the nature of the investment, and relied solely on Mr. Hernley's advice and judgment.

 The law is equally clear. Section 13 of the Securities Act entitled "Limitations of Actions", 15 U.S.C. § 77 m, provides as follows:

 Defendant argues that the one year limitation period applicable to section 77l(1) began to run on the date the investment contract was entered into. Defendant provides a copy of plaintiff's cancelled check dated April 29, 1981, and argues that any section 77l violation, which would consist of an offer or sale of a security in violation of section 77 e, had to have taken place on or before that date. Plaintiff counters this argument by indicating that section 77 e is violated when the mails or interstate commerce are used to offer, sell, or deliver unregistered securities. Since defendant used the mails only once, on or about June 9, 1981, to deliver the Participating and Operating Agreement, ...


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