25 N.W.3d 257
S.D.2025Background
- Anderson Industries (SD) custom-built 30 V1.5 industrial heaters for Thermal Intelligence (TI, Canadian corp.), using TI’s specifications and logo.
- Initial agreement was for 21 heaters, secured by a 20% down payment; soon after, parties extended to all 30 units, with payment and delivery structured as installments.
- TI made partial payments and accepted delivery of 17 heaters, but raised ongoing complaints about product performance.
- In November 2019, TI stopped making payments; Anderson withheld further shipments, and TI declared the relationship terminated.
- Anderson sued for breach of contract, seeking full payment; TI denied contract’s existence or, in the alternative, asserted Anderson had breached first due to defective heaters.
- Circuit court granted summary judgment for Anderson, finding an enforceable contract and breach by TI; TI appealed.
Issues
| Issue | Plaintiff's Argument (Anderson) | Defendant's Argument (TI) | Held/Outcome |
|---|---|---|---|
| Existence of contract for 30 heaters | Express & implied agreement was reached by emails, payments, and conduct | No enforceable contract; essential terms were open & negotiations were ongoing | Contract existed; emails & conduct show clear agreement |
| Breach of contract by nonpayment | TI breached by stopping payments & canceling order | Anderson’s product defects justified withholding payment & cancellation | Fact issue remains—possible substantial impairment by defects |
| Application of UCC to dispute | UCC Article 2 governs; TI accepted goods and did not reject as nonconforming | Relied on common law, not UCC; focused on lack of contract & prior breach | UCC governs; installment contract principles apply |
| Adequacy of summary judgment | No general issues of material fact exist; Anderson entitled to judgment | Material facts around product defects & breach precluded summary judgment | Affirmed contract formation; reversed summary judgment on breach; remanded |
Key Cases Cited
- Healy Ranch, Inc. v. Healy, 978 N.W.2d 786 (S.D. 2022) (summary judgment standard: de novo review and absence of genuine issues of material fact)
- Davies v. GPHC, LLC, 980 N.W.2d 251 (S.D. 2022) (summary judgment proper if no material fact remains and movant entitled as matter of law)
- Moe v. John Deere Co., 516 N.W.2d 332 (S.D. 1994) (existence of breach under UCC is a question of fact)