First Bank of South Dakota (National Ass'n) v. VonEye

(NA BANK FIRST OF SOUTH DAKOTA ASSOCIATION), MILLER,

TIONAL DAKOTA, Banking Corpora

SOUTH

tion, Appellee, Plaintiff and

Barney Evelyn VonEYE and Mae Von

Eye, Wife, Husband and Defendants Appellants. America, acting

United States of

through the Small Business

Administration, Appellee.

No. 15636.

Supreme Court South Dakota.

Argued Sept. 1987.

Decided June

Bradley Heidepriem, Widmayer Zell of G. Zell, Miller, plaintiff appellee. for & and Miller, Michael and Todd C. J. McGill Beresford, appellants. for defendants and Hansen, Atty., Mikal G. Asst. U.S. Pierre, appellee. for MORGAN, Justice. N.A., Bank of South Dakota Miller

First (Bank), Barney VonEye Branch sued Evelyn May VonEye (VonEyes) prom- on a note, agree- issory security secured ment, ancillary for claim and filed an action delivery subject to seize farm collateral agreement. ap- security judgment in peal from the final favor of part, affirm in reverse and re- Bank. We part. mand VonEyes are farmer/ranchers who had twenty- with Bank for transacted business through years, spring of 1985. five real loan from jury dire, had a secured estate service. Prior to voir de- provided operating with Bank and Bank requested fense a blanket VonEyes, secured line of credit to cause depositors to all and borrowers of livestock, security agreement on Bank on the principal/agent theories of equipment. Von- feed, inventory and crops, (SDCL 15-14-6(3)),1 or that real estate secured other Eyes also had potential those jurors had an interest in the (FLB) Land Bank loans with Federal (SDCL 15-14-6(5)).2 action VonEyes’ coun- (FmHA). Farmers’ Home Administration phrased sel their concerns as follows: pertinent facts will be com- Any other Any ... banking individual who is at upon analysis in of the mented issues. might First Bank have the even unknown complaints, to Bank’s Von- response In bias in the back of their if mind that we answer and and filed an Eyes served money award a judgment it could be counterclaim and an amended counterclaim. affecting safety or status of our de- alleged The counterclaim three counts: bad positors at By First Bank. the same faith, breach of contract and commercial token, you where any potential disposition unreasonableness of the jury member of the currently that collateral. obtaining, operating or funds at First Bank, we feel danger there is a real perceive We the half dozen issues prejudice particular in juror think- VonEyes’ enumerated brief fall into four ing, my goodness, if I render a verdict in categories and can be set out as follows: favor of First Bank what’s the reaction 1. The failure court of the trial to allow going go to be when I into the bank six jury challenge to all bank customers months from now to renew a note. We by pretrial when raised motion and potential prejudice feel these are items of course of voir dire. against my client. 2. granting The trial court’s error in directed verdict on cause of challenge court denied the at that action for obligation good breach of for time, granted but that individual voir dire dealing faith in commercial transaction would be allowed on the issue of or bias per SDCL 57A-1-203. dire, prejudice. During VonEyes voir chal- 3. Exclusion by the trial court of evi- lenged two for cause. The court trucking dence of unreasonable fees and granted challenge one on the basis of famil- insufficiency of the other evidence to relationship. ial The court denied cause as support jury disposi- verdict that the (Hurd). Larry Hurd had used tion of the collateral was a commer- peremptory challenges their three before cially reasonable manner. Hurd was called. 4. The allowance the trial court of brief, In VonEyes complain their that of attorney Bank’s fees incurred in both selected, the twelve veniremen five had a security agreement enforcement of the relationship business with Bank. Of these and the claim delivery action. five, VonEyes challenged only for Hurd We will consider these issues in the order cause. It must be noted juncture at this enumerated. that South Dakota cases which deal with juror qualification contend that the trial impartiality court or are crimi- denying nature, committed reversible error in their nal in analyses but we believe the motion to excuse all of Bank’s applicable customers those cases are equally here. 15-14-6(3) provides, pertinent part: Challenges 1. SDCL may for cause be taken on one or Challenges following grounds: may more of the for cause be taken one or following grounds: more of the (5) juror Interest on the in the (3) principal That the of ... action, event of the or in main agent juror any party exists between the action, except involved in the his interest as a to the action.... municipal corpora- member or of a citizen tion[.] 15-14-6(5) provides, pertinent part: 2. SDCL speaks directly impor- standing opinion, A 1958 case such act impartially and cause. State v. challenging for fairly upon tance the matters to be submitted to ” Flack, (1958). 77 S.D. him[,]’ he should not disqualified as a juror. Flack, A 77 S.D. at compelled defendant should not be 89 N.W.2d at peremptory challenges upon Finally, impartiality to use his must be based prospective jurors upon who should have been the whole voir dire examination and Prejudice pre- single excused for cause. responses will be isolated are not determi- Hansen, Flack, disqualified if a supra; juror upon sumed is left supra. native. proper in the chal- face of reject VonEyes’ contention that We cause, lenge so that defendant must challenge to Hurd should have been peremptory either use one of his chal- Thomlinson, sustained based on State v. lenges permit juror to sit. N.W.2d In (emphasis 77 S.D. at at 32 N.W.2d case, we held that added). should have jurors been sustained as to VonEyes failed to exercise their membership who held a in cooperative a challenge four of the five venire association. The association had been bur panel. Right men who remained on the glarized by the defendant. The interest of appeal preserved has not been as to these the in this case does not rise to the Miller, jurors. See Bittner v. 226 Neb. level of those in Thomlinson. The interest (1987). (A party 410 N.W.2d 478 who in Thomlinson akin ownership to an challenge prospective jurors fails to jurors’ pecuniary interest where the fi disqualification passes and them for cause nancial directly interests were involved. any objection waives to their selection as Such is not the case here. Therefore, jurors.) appeal preserved is Upon an examination of the record in only VonEyes’ challenge as to for cause to case, this juror it is evident that Hurd was Hurd. thoroughly preju- examined as to bias and question remains whether the trial dice. After an examination counsel for denying court committed reversible error in Bank, VonEyes and both court conduct- VonEyes’ challenge potential to Hurd as a following ed the voir dire. 15-14-6(5) juror. provides that a in Larry, The Court: the course of the jurors may be taken questions, I detected some reluc- grounds juror of interest on the before, I tance. ... and as have asked in the or in the in- event main you panel, the event that are on this ruling volved the action. “The favor, to return a verdict in their voted disturbed, except trial court will not you that make uncomfortable then it, support the absence of evidence to going into the bank tomorrow or the next in which case it becomes an error at law.” day try and continue to to conduct busi- Flack, at 89 N.W.2d at ness with them? Hansen, See also State Hurd: No. Muetze, 368 (S.D.1987); State v. N.W.2d Volk, (S.D.1985); State v. you 575 331 N.W.2d The Court: Or do think that would (S.D.1983). your relationship affect bank? you Are concerned about that at all? expression predeter A “mere a Hurd: No don’t think it would affect opinion during mined ... voir dire does not my relationship. very professional. It is Hansen, per disqualify juror se.” Muetze, Okay. you prob- The Court: have no supra; So citing N.W.2d at case, being Flack, supra. sitting lem on the fair and potential juror A should be impartial letting to both sides excused for cause if he is unable to set chips they may upon fall where based preconceptions impar aside and render an Hansen, However, supra. you, jury, tial verdict. facts as will determine declared, instructions; potential juror apply once a has under them and them to the “ oath, will, ... ‘that he can and notwith- is that correct? Hurd: That’s correct. commercial transactions under SDCL 57A- Secondly, 1-203.3 they argue that the trial you weigh And would The Court: by directing court erred against a verdict testimony, going and I'm to tell witness’ them on their theory. claims under that testimony you you how view the of wit- response, Bank’s as to aspect, the first is nesses, you would follow those instruc- that the trial court accepted VonEyes’ ar- tions? gument permitted were to intro- Hurd: Yes. evidence duce on that issue. appears That Thereafter, the court denied cause and to be accurate. Bank has not asked for seated Mr. Hurd on the When voir issue, therefore, review on this it is obvi- juror subject dire examination of a “... ‘is ously ripe for review. There is no construction, finding by to more than one settled law on that issue South Dakota way upon the trial the chal- court either ” split and there is a of authority elsewhere. Flack, lenge appeal.’ is conclusive on We will therefore judgment reserve on that (citation S.D. at 89 N.W.2d at 32 omit- issue for another properly time when it is ted). support We conclude there was us, argued before briefed and re- the evidence for the trial court’s decision spective meantime, sides. In the the exist- accordingly affirm on this issue. ence of such a cause of action in tort is the issues, remaining In order to discuss the only. law this case necessary it posture to establish the proceedings at the time trial court We then turn to the aspect second personal ruled. The property had been of the issue. Did the trial court err in seized, Bank, directing delivered to against VonEyes? and sold at auc- a verdict Von- sought Eyes’ tion. In this action Bank a deficien- claim of obligation breach of the of cy judgment. answer, counterclaim, By good premised alleged faith is on two viola counterclaim, VonEyes First, and amended Bank, tions. contend that sought recovery against previous Bank on three years’ practices violation of and involving agreements, counts: bad faith the 1985 wheat had refused to advance monies crop; breach of permit contract to advance the to payment them to make the due 1984 FLB payment; dispose November, 1984, and failure to FLB in which resulted in of commercially collateral FLB initiating reasonable the proceedings. foreclosure Second, manner. VonEyes’ brought claim was on they allege that Bank refused to jury. to trial At the close of all of the money permit advance sufficient to them to evidence, the trial court crop directed a verdict harvest their 1985 and even threat against VonEyes favor of Bank and prosecution on ened them with if they utilized involving the issues of proceeds bad faith the 1985 the any crop pay from of the to crop alleged wheat and the of con- harvesting expenses, breach such as a result of payment. tract to advance 1984 FLB crop which the rotted the field. The returned a verdict in favor of When faced with a motion for directed against VonEyes Bank and on the remain- verdict, accepts the court as true the evi ing commercially dispo- issue on reasonable presented dence by non-moving party sition. indulges legitimate all inferences in VonEyes’ second party against issue is bifurcated in favor of the whom the mo First, they argue their brought. brief. that there is Kreager tion is v. Blomstrom Co., a cause of action for the tort of the (S.D.1985); breach 379 Oil N.W.2d 307 Bu obligation good dealing faith Associates, dahl v. Gordon & David 323 provides: Ass’n, 3. SDCL 57A-1-203 Prod. Credit the issue of bad faith was not properly Every duty impos- before this contract or within this title court because the trial obligation good performance es specifically faith in its court had found that Jensen had or enforcement. admitted there had been no bad faith exercised part on the of PCA. Nor was the issue decided regard, distinguish In this we Yankton Prod. Jensens, in Federal Land Bank Omaha v. Jensen, (S.D. Credit Ass’n v. 416 N.W.2d 860 (S.D.1987). N.W.2d 155 1987), present from the action. In Yankton (S.D.1982); Quenzer, Myers apparently v. N.W.2d 853 set out position Bank’s on 110 N.W.2d the motion. That memorandum is not a if there is court must determine sub the record either. We do not wish discourage stantial evidence to sustain cause of to courts and counsel from us- ing telephone If there is evidence as action. such conference calls wherever differ, possible, minds to simply allow reasonable case but it is sloppy prac- trial go jury. Haggar Olfert, make, v. tice to fail properly notice, and file (S.D.1986); Sabag N.W.2d v. motions to Continen be considered the court. Nor Dakota, (S.D. 374 N.W.2d 349 is this a say tal South case where we can that on a 1985); Lytle Morgan, record we presume silent will that the trial (S.D.1978). correctly. court acted per- Bank cannot be gain by mitted to practices deleterious found, directing What the trial court of its counsel. Bank, the verdict in favor of was presented suggests had not sufficient evi- Bank grant- that the trial court present dence to the matter to the ed the motion payment because trucking Specifically, beyond the court found that there was fees is control may no evidence of consideration for Bank to Bank. That have been the trial FLB transcript continue to advance funds for the court’s reason. In the we find payment saying: Bank would have been court placed position by releasing in a worse going grant your am motion that it is harvesting expenses. collateral to meet correct and the sheriff controls those Further, many the record indicates that proceedings actually, the creditor VonEyes’ allegations as to Bank’s lack of say has no in what the sheriff does. We good by any faith were unsubstantiated run into that over here. good evidence that would indicate a lack of We are rather disturbed the cavalier See, 57A-1-201(19).

faith. We af- judge displayed attitude Bank and the trial firm the trial court on this issue. VonEyes’ complaint. disagree toward We thesis. The third issue centers around Bank, did, of commercially proceeding acting reasonable itas disposition of authority the collateral. first under of SDCL 57A-9-504 which complain provides proceeds disposition that the trial court evi the excluded of dence applied expenses of what claim to excessive shall be to the be reasonable charged by retaking. fees provides: the truckers who loaded of The statute further the VonEyes’ yard security livestock from and deliv “If the interest secures an indebt- edness, ered yard pursuant party the same to the auction the secured to account and, to any surplus, the sheriffs Before trial the debtor for directions. unless apparently agreed, Bank in li- sought, by motion otherwise the debtor is for liable mine, preclude presenting any deficiency.” 57A-9-504(2). to In VonEyes from evidence on that excessive of it their claim view the fact that was Bank that trucking charged. VonEyes ap proceeding possession rates undertook this of were parently collateral, charges responsibility claimed the were three the it is Bank’s to regulations. times by may that allowed PUC take such action as deemed neces- be sheriff, sary anyone acting The motion in if limine is not a of the the or his record, behalf, overpayment trucking nor is there semblance of an authorized sustaining order the responsibility trial the mo fees. That cannot be thrust court except gleaned upon hapless foregoing tion as can from a tran the debtor. The is be script telephonic hearing say of a held not to that there was indeed an exces- motion prior case; trucking charge to the date in this set for trial. It is difficult sive made but transcript say properly to determine from the what the rather to the issue although perhaps by VonEyes, basis was for Bank’s motion. The trial raised not right court noted that there no in the in the context. It is their contention was motion kept referring file it but to a memorandum that it is a factor to be considered 636 commercially disposi Supermarket Inc., reasonable

issue of ban v. Wait’s 294 opinion, (S.D.1980); In our tion of collateral. how 793 N.W.2d Robinson v. Mud ever, (S.D.1979); for commercial reason lin, the criteria N.W.2d 273 753 Nebraska disposition or sale attach to the ableness Co-op Elec. Generation & Transmission collateral, process retaking. 253, Walkling, 90 241 v. S.D. 150 N.W.2d Clark, Bank v. 231 Kan. Westgate State “We must consider the evidence in (1982), 81, approv 642 P.2d 961 cited with light most prevailing favorable to Motor Topeka al in Datsun Co. Strat Robinson, party_” 273 at 755. N.W.2d ton, (1987); Kan.App.2d 12 736 P.2d 82 substantial, “The test is whether there is Leasing Corp. v. Diamond Timber Service evidence credible which ... would tend to (S.D.N.Y.1983). Inc., F.Supp. 559 972 .. Urban, sustain verdict.” 294 at N.W.2d possession a creditor has he must act ‘Once 795. “... ‘The are the exclusive toward commercially manner reasonable in a weight of the judges of the evidence and * ” permis sale, lease, retention where proposed credibility of the witnesses *.’ sible, disposition.’ ...” Farmers other 90 Walkling, S.D. at 241 at N.W.2d 161, 167, Otten, Bank v. State (citation omitted). (1973) added). (emphasis N.W.2d party’s A dispose secured trucking charges The amount of is more 57A-9-504(3) collateral under SDCL is sub- properly by the to be considered trier of requirements: (1) ject to two creditor must principal fact in the Bank’s action for defi sale, (2) method, send notice of the ciency judgment. Preclusion of introduc manner, time, place, and terms of the sale tion of error. that evidence was commercially must be reasonable. Von- argue in- then that there was Eyes argue was inade- do not that notice support jury’s sufficient evidence to quate. determining In whether a sale is upholding position verdict Bank’s that dis- commercially reasonable position property was otherwise aggregate ‘... “it is the of the circum- commercially reasonable. specif- stances in each case—rather than support

To their claim of commer ic details of the sale taken isolation— cially disposition, VonEyes unreasonable emphasized that should in a review arguments. First, advance four manner, method, the sale. The facets of timing public time, sale of the cattle was place, and terms cited the Code unreasonable because the cattle would necessary, as in- are be viewed brought higher price if parts Bank had terrelated transac- whole ’ spring waited until the of 1986 to sell the tion.” (The February cattle. cattle were sold Dairy First Bank v. Haberer Farm& 1986.) Secondly, argument interrelated (S.D.1987)(ci Equip., 412 N.W.2d argument, with the first the seizure of the omitted); Ltd., tation In re Zsa Zsa cattle, left them in a state stressful which 665, (S.D.N.Y.1972), F.Supp. 670 475 aff'd Third, proceeds reduced the at sale. (2d Cir.1973). F.2d 1393 It is uncontested per-pound slaughter cattle were sold on a in the record that the cattle market was basis, cattle, reducing rather than as bred at the time of the down sale due to weather proceeds pri at Finally, sale. that the conditions and cattle had that vate sale of feed was made before all bids poorly. VonEyes requested wintered had were received. keep that Bank allow them to the cattle spring they adequate Commercial of the sale of until as to reasonableness feed collateral is a of fact. United sustain the cattle until that time. How ever, Co., States v. Conrad 589 F.2d Bank felt it Publishing was the best (8th Cir.1978); repossess 949 Leasing parties John Co. interests of all to Deere Fraker, (Iowa 1986). possible. v. 395 It and sell soon In N.W.2d 885 cattle as as appeal Bond, is not this court’s Massey Ferguson Corp. function on to Credit weigh 217, (1985), Ga.App. the evidence or to substitute this 176 335 S.E.2d 454 judgment equipment court’s for that of the farm auctioned off at a Ur- was when, dealer, time as testified to a party, guilty third of some fault which equipment market for used farm was “ter- foreseeably plaintiff’s contributed to dam- The court rible.” noted that the claim of ages. words, In other preclud- a debtor is commercially unreasonable sale established ed recovering from for accidental loss or only equipment that had the been sold at damage, and a claim for recovery of dam- might brought another time it a bet- ages allege acts or omissions of a price. ter The court reiterated the estab- rising nature gross negli- level of that, lished rule “the fact that a better gence. The evidence here does not support price could have been obtained a sale at finding. such a different time a different method is VonEyes ... not of itself sufficient to establish next claim that sale was not made in a commercial- damaged were because the cattle were not reasonable manner.” ly Ga.App. at sold as bred cows. The manner in which 217, 454; Farmers Bank v. collateral is 335 S.E.2d at price, sold can affect the but a Hubbard, 431, 247 Ga. 276 S.E.2d 622 price low proof not conclusive that a sale (1981); 57A-9-507(2). has not been commercially reasonable. However, large discrepancy between sale investor, A bank is not an but rather a price and fair signals market value a need lender with the to define and limit the scrutiny for close procedures. of the sale’s Extebank, accept. risks it will Sumner v. Press, Connex Inc. v. International Air (1982), 88 A.D.2d 452 N.Y.S.2d 873 Inc., motive F.Supp. (D.C.1977); In grounds, on other 58 N.Y.2d modified Ltd., supra. re Zsa Zsa N.Y.S.2d 449 N.E.2d 704 adopt have us the view of the Connex VonEyes’ argument ignores also court that a creditor possessing particular two factors: To continue to feed the cattle expertise regard depletes supply upon the feed the collateral must which Bank and, higher be held to a also had a lien standard than one not importantly per- more haps, believe, so well daily the interest continues versed the trade. We to accrue however, during agree that interim. We that when a reasonableness creditor finds position, itself an insecure manner of the sale in this instance is better assurances, adequate and without standpoint preparation it need viewed from the speculative not wait for a price. authority better for sale. There is that when the preparing cost of the collateral for sale is argue next that if the small, comparison price to the additional placed cattle great had not been under such likely generate, it is the creditor should stress, in repossession, they the course of money. Westgate spend State the extra brought price would have a better at sale. Bank, (1982), 231 Kan. 642 P.2d 961 repossession The evidence that the approval in Topeka cited with Datsun Mo difficult, extremely hours, cattle was took Stratton, supra. tor v.Co. cattle, and caused stress to the is uncontro- verdict, support In we note that might verted. We also note that the cattle three witnesses testified for Bank that the requisite days were held for the three generally poor pri- cattle were in condition presumably some of the stress effects repossession. or to the The record further should have worn off. The risk of acciden discloses that in order to sell the cattle as damage tal loss or is on the debtor when cattle, they bred would have had to party’s pos collateral is the secured pregnancy tested at a cost of 57A-9-207(2)(b). session. $3.00-$4.00 In each. The auctioneer who sold the Adams Barnett Bank Polk County, cattle of opinion testified that in his (Fla.App.1985), the cattle would appellant So.2d sought damages brought price not have a arising out of the better had loss and pregnancy security alleged damage value of due to been tested. A bank officer repossessed. caused when it also testified that the cattle sold in a was were Adams generate court in found that there was no manner which would the most creditor, evidence hiring money. that in that of, VonEyes’ next contend that are unaware failure to make commercially adequate unreason

sale of feed was reference to the record waives days the feed was sold two the issue. able because let out and that several after the bids were it

requests MILLER, J., came in after for the feed concurs. 57A-9-507(2) applies been sold. SDCL WUEST, C.J., specially. concurs are com sealed bids here as well. Private is HENDERSON, J., Bank not re mercially reasonable and in concurs price. VonEyes quired part. to wait for a better in and dissents any of the later bids do not claim that SABERS, Justice, dissents. brought higher price. a Testi WUEST, price received mony (concurring spe- indicates that the was Chief Justice cially). realm of reasonableness. within the jury except verdict that a com- I regard-

We affirm concur for the comments mercially ing sale held and con- reasonable counsel. is

clude there substantial credible evidence HENDERSON, in record to sustain such a (concurring verdict. Justice in part, dissenting part). VonEyes’ Finally, we consider claim that allowing join court erred in Bank I aspect majority opinion the trial attor- of the ney III, incurred in namely, fees both the enforcement which reverses on Issue a fail- security agreement disposing of the and the claim ure of collateral a commer- delivery brief, In cially action. their Von- reasonable manner. Eyes state that the trial court ruled that However, join Justice Sabers’ dissent in Supreme Dakota the South Court has ruled firmly that I am convinced that small pursuant attorney fees are recoverable Miller, County, communities such as Hand language security agreement provid- Dakota, South customers of the bank ing for such recovery. briefs do juror. should not sit on the bank’s case as a specify in the record this trial where County primarily agricultural Hand an occurred, judg- error and our review of the county, only and there are two banks locat- ment and the various orders the record Miller, 3,000 community ed in of less than attorney does not reveal allowance people. interrelationship An between a fees the trial court. SDCL 15-26A-64 very personal. debtor and creditor-bank is requires that whenever reference is made many There have been bank foreclosures record, any part it briefs throughout Midwest, County and Hand particular part of shall be made to the exception. agricultural is no Times in the record, designated, spe- suitably and to the community tough. very have been It is pages specific cific or- thereof. Absent juror difficult for a to owe a bank a sub- fees, allowing judgment attorney der or money stantial amount of and sit on a case adequate to the record for the reference open mind, in a free and state of oblivious judge’s alleged ruling, deem the trial we testify to the debt. Bank officers would issue waived. do who business with them. When one “interest,” meaning

We directed verdicts as to considers the affirm the bad as set contract, 15-14-6(5), faith and and the forth in SDCL breach it would reason- sale, commercially outcome, ably encompass verdict as to reasonable an interest in the depositors but we and remand for a new trial and the and the reverse borrowers portion judgment granting the bank would have an interest in an Therefore, deficiency judgment VonEye Bank a due to the outcome of the loan. precluding regarding error in the evidence for cause for all of the trucking charges. holding excessive In the ab- a customer with this bank, sence of judgment attorney an order or small-town where customers know fees, can, course, well, very there no issue. If the officers and the officers are there judgment keenly relationships is such an order or that we aware of their customers, bearing and there is a direct depositors cause to all and borrowers of soundness, the bank’s fiscal not to mention Bank on principal/agent theories of a reía- practices, jurors its five eventual should (SDCL tionship 15-14-6(3)) and that those jury panel. have been stricken from the potential jurors had an interest in the ac- so, By doing had, VonEyes would have (SDCL 15-14-6(5)). tion Every prospective whatsoever, jury without doubt a juror who is a customer at the bank is in a allegiance had no alliance or with one of relationship debtor/creditor with that bank. parties to lawsuit. words, In other either the bank owes them Also, join in Justice Sabers his dissent money owe money. the bank This II, namely, on Issue the trial court debtor/creditor relationship is substantial granted should not have a directed verdict even without considering the need for that against on their cause of ac potential juror to seek a loan in the future pleaded obligation tion for breach of an of or an payments. extension for loan In the good concerning faith commercial transac present economy, probabili- these were real tions under SDCL 57A-1-203. Under the ties, just potential of prejudice sources presented case, in evidence this there is a against VonEyes or bias for the Bank. statutorily implied obligation good faith. indicated, As jurors five of the Libby First Nat’l Bank twelve Twombly, (Mont.1984). 689 P.2d 1226 a Good faith is debtor/creditor 57A-1-201(19) defined under SDCL as be Bank. The fact VonEyes challenged ing “honesty fact in the conduct or only one of these five for during cause trial Enough transaction concerned.” evidence is not crucial here as it inwas State v. presented jury so that the should have Flack, 176, (1958). 77 S.D. 89 N.W.2d 30 permitted bring judg been to its collective VonEyes challenged all of the bank cus- play ment into general on the bank’s obli by pretrial motion, tomers for cause which gation good “Thus, faith. there are over was denied the trial court. The to years compelling precedent that this challenge these jurors bank customers as reviewing Court must examine the evi preserved. require has been To dence in light most favorable to the again challenge jurors four of these nonmoving party on a motion for directed jurors require front of all of the give verdict and to said nonmoving party put useless act which would them in even the benefit of all reasonable inferences more disfavor with Bank’s customers. therefrom.” Lovell v. Coop., Oahe Elec. judge Under South Dakota the trial law 396, (S.D.1986) 382 N.W.2d exercise his discretion the selection (Henderson, J., dissenting).

of a Gregg, Bartlett v. 77 S.D. SABERS, (dissenting). Justice (1958) states that “The trial attorneys, usually court knows the most of majority opinion reverses on Issue jury panel, type community and the III. I would also reverse on Issues I and Bartlett, in which the trial is held.” II, of: because charged N.W.2d at 659. The trial court is 1. The trial jury court’s failure to allow obligation with the that the insure challenges to all bank customers when panel impartial. is fair and 47 Am.Jur.2d by pretrial raised motion and 23; Dowd, Jury Irvin v. 366 U.S. course of voir § dire. (1961). duty S.Ct. 6 L.Ed.2d 751 This 2. The trial granting court’s error in is even more crucial when the number of directed verdict on cause of are who bank customers will be so obligation action for breach of the good dealing proportionately large impartial jury faith that an commercial transac- pursuant tions to SDCL 57A-1-203. cannot selected. City Olson v. Sioux Falls, 262 N.W. 85 It 1. Bank Customers As Jurors always is almost wise for the trial court to disqualification The trial court err on the side of granted should have for even Von- Eyes’ request removed, for a if juror wrongly blanket the worst

the court have done in most obligation good will cases is to performance faith in its replaced impartial juror one with an or enforcement.” The trial court erred in Ternes, other. State v. 259 N.W.2d 296 granting a directed verdict (N.D.1977). cause obligation of action for breach of good questions concerning: faith because of jury nothing to a trial means if 1) involving bad faith crop, the 1985 wheat jurors the have an interest in the action or 2) involving bad faith the refusal to ad- (Bank’s in the main involved liabil- payment, vance a 1984 Federal Land Bank ity). Jurors who are debtors and creditors 3) dispose failure to of collateral in a com- excluded, of a especially bank should be mercially manner, including reasonable jurors where the number with connec- necessity pregnancy testing eighty bred forty percent tions to the bank exceeds cows, 4) trucking charges, 5) excessive jury fifty percent entire and constitutes timing public cattle, sale of number of needed for a ver- 6) dict. That the reasonableness did have a fair and timeliness of the jury following ques- is evident from repossession of the cattle which ex- Hurd, tions and answers of Juror who sat tremely stressful to the cattle. juror objection as a over for cause. As stated majority opinion, “The Hurd, Counsel: Mr. if at the conclusion court must determine if there is sub you of the evidence felt that the Von- stantial evidence to sustain the cause of Eyes position had established that their If action. there is such evidence as would prevail, should you’ve would the fact that allow reasonable differ, minds to the case a business with the bank go jury. Haggar to the Olfert, v. make it difficult or uncomfortable with (S.D.1986); N.W.2d 45 Sabag v. Continen you returning as far as a verdict in favor Dakota, (S.D. tal South 374 N.W.2d 349 VonEyes? 1985); Lytle Morgan, Well, maybe Juror: a little bit uncom- (S.D.1978).” (emphasis added) It is obvi fortable. But— ous this case that the evidence was such you Counsel: It would cause prob- some to allow reasonable minds to differ and your coming lem in mind as far as back gone therefore the case should have saying you if felt the evidence was It was reversible error for the trial know, justified, you that the bank was court to direct a verdict under these cir wrong in this case? cumstances. Yeh, Juror: it could. In view of the reversible error on Issues Counsel: You feel that could influence II and the error reversible as decided your decision-making ability, Mr. Hurd? majority opinion respect Maybe just Juror: a little bit. III, questions Issue all of the issues and showing No further should have been re- go should back for a new and fair trial. quired Hurd, in this case to dismiss Juror showing and no further required should be impar- reverse and remand for a fair and

tial in the retrial. Obligation Good Faith Of provides: “Every 57A-1-203 con- duty

tract or imposes within this title

Case Details

Case Name: First Bank of South Dakota (National Ass'n) v. VonEye

Court Name: South Dakota Supreme Court

Date Published: Jun 1, 1988

Citation: 425 N.W.2d 630

Docket Number: 15636

Court Abbreviation: S.D.