Moe v. John Deere Co.
516 N.W.2d 332
S.D.
1994
Check Treatment

*1 (S.D.1982). Stagnant claims should not provides: “No holder of 21-7 which by either an maintain be allowed claim an estate shall executor/executrix thereon, claim a trial court. SDCL 30-21-28. action unless the is first chapter.” in this sented or filed as all Imposing a constructive trust on assets to the extent that we have It is not modified Green, at the time of her owned Carrol precedent abandoned or forsaken state death, keeping the intent of both with Statutory we. probate code. Nor should they prepared Green when Miles and Carrol filing contesting periods for claims and wills nephews mutual will because the and their general rule is that must be observed. they original- nieces of both of them share as judicially recognize must all courts of state contemplated. ly apply the state. In re and the statutes of WUEST, J., I am authorized to state (1927). Gibbs, 464, 214 51 S.D. N.W. 850 joins writing. simply change cannot the en- This Court statutory probating tire scheme of wills. joint took under the last will

Carrol Green of herself and deceased hus- and testament mutual, joint, reciprocal It and band. was right, will. Green had the once the Carrol hers, property spend dissipate was all— game it in a card she it all—lose —whatever MOE, Appellant, Ted Plaintiff and that, point ac- so chose. But the critical joint, reciprocal cording to the mutual and will, property that not all of the she had COMPANY, DEERE Defendant JOHN death, dissipated upon disposed of or Appellee, and will, reciprocal the terms of that “residue personal of all our real and and remainder

property” which was to be shared Day County Implement Company, nephews nieces of Miles W. Green and Defendant. Green, one-half thereof to each set of Carrol nephews and nieces. Carrol Green’s brother No. 18308. not mentioned in the 1964 and sister were Supreme Court of South Dakota.

mutual/reciprocal will. After Miles W. Green on, sought, passed by her last Carrol Green on Briefs Dec. Considered will and testament of Decided joint change provisions and mutual sister, by favoring will her brother and Theo- Myrtle Thompson

dore Isakson. greatly This case has concerned me for opened being up fear of estates which have via a “constructive been closed for decades case, theory. example, trust” This as an is a fall collateral attack instituted of 1990 going meaning joint back to the mutual will into on June entered By joining probated which will was express prac- opinion, I wish to ticing Bar should not assume that old estates willy-nilly by opened up

can creative con- ceptualizations. It is a fundamental rule of

statutory provisions construction state given possible. if statutes must be effect Mines, King Matter Silver *2 Merkle, Offices, Samp

Bret Chancelor Law Falls, plaintiff appellant. Sioux for Wiederrich, Woods, Fuller, James M. Smith, Falls, Shultz & Sioux for defendant appellee. MOSES, Judge. Circuit (Moe) appeal by This is an Ted Moe from a summary judgment granted by Third Judi- cial Circuit Court in favor of John Deere (Deere) Day County Imple- Company (Implement). ment We reverse.

FACTS 29, 1983, September bought

On Moe Day County farm tractor from Equipment in Watertown, purchased South Dakota. He $121,- price John Deere D8850 for a cash transaction, financing 268.00. Moe traded two old tractors for the amount of $77,543.00 $59,802.40 agreed pay to $11,- equal difference five installments of years 960.48 each due on October 1st for the 1984, 1985, 1986, 1987 and 1988. After the completed assigned contract was it was September Deere on paying Moe was two months late in his $11,- paying first installment. Rather than $12,- paid 960.48 on October Moe 212.87 on December 1984. On October 1,_ again timely pay Moe was unable his second installment. Deere waived full ment and extended the time in Moe which payment. January was to make this On partial payment Moe made a $6,200.00, amount of over three months late. Moe and Deere that Moe was to a second amount on March 1986 in the complete amount of the second March Deere installment. On sent indicating notice to Moe Moe’s second past installment was due and that he had Mehus, bring please M.K. Man- ter contact us. March 1986to until ager Financial Again Services. current. Moe missed his account payment deadline. Implement tractor on sold the $44,000.00. Implement paid for delinquent up on the Deere did not follow pro- in full on the contract and representative until a from Deere *3 the excess ceeds to the debt and turned over or the first contacted Moe sometime (2) by mailing proceeds to Moe’s lender two over seven months after of June $2,616.77 totalling to the Farmers and checks originally due. the second installment Merchants Bank on December representative and Moe Deere’s Implement on the Moe sued Deere and $6,389.48 $2,000.00 the Moe would of (1) following wrongful re- causes of action: plus owing to Deere and Deere interest (2) (3) possession; repossession; fraudulent pay the balance when he would allow Moe to (4) sale; commercially fail- unreasonable representative to harvest. Deere’s started surplus. ure to account for the specify the due date for and Moe failed $2,000.00 payment or when the either the partial summary judg- Deere moved for was due. Moe had no further balance issues of com- ment on the third and fourth representative from with the versations mercially unreasonable sale and failure to the until after Deere Deere about granted surplus. account for The trial court July repossessed tractor on Then, Deere’s motion. Deere moved for summary judgment on the first and second Moe, at the time of who was Oklahoma wrongful repossession issues of and fraudu- from repossession, did not receive notice 5, 1993, repossession. February lent On that the tractor was representative Deere’s granting trial court issued an order Deere’s going repossessed to be because his summary judgment motion on both issues. reassigned delinquent. were Deere ments appeals. Moe Implement following the contract to Moe’s 1, 1986, repossession. Deere On STANDARD OF REVIEW Minneapolis, Minnesota a certi- mailed from grant summary reviewing of 1986 to Moe which fied letter dated 6—56(c), judgment under SDCL we must 15— necessary that Deere “[found] indicated moving party has determine whether possession equipment involved.” gain of genuine demonstrated that there is no issue to Deere apparently This letter was returned judg of material fact and he is entitled to Thus, to Moe. Deere hand-ad- undelivered a matter of law. Breen v. Dakota ment as and sent it to Moe who dressed a new letter Co., 221, 223 Gear & Joint 433 N.W.2d up August The letter picked it Tenneco, Inc., 1988); Intern. Inc. v. Groseth indicated: (S.D.1987); v. 410 N.W.2d Wilson reassign your contract to the We intend to Ry. N. 83 S.D. Great it, reassign named dealer. Once we above (1968). N.W.2d The evidence must letter, you two weeks from the date this favorably nonmoving par viewed most to the concerning all will contact them on matters ty should be resolved and reasonable doubt equipment or the disposition Groseth, moving party. They under the contract. amount owed (citing Trapp at 164 v. Madera Pa N.W.2d by pub- dispose of said collateral intend to Inc., (S.D.1986); cific, 390 N.W.2d 558 Wil you private lic or sale. If wish to redeem 21). son, Summary judgment at 157 N.W.2d you equipment, must to John remedy which should be is an extreme plus ex- only clear and all when truth is awarded repossession, in penses incurred from this touching the existence of a reasonable doubts funds, reassign before we cash certified against the fact be resolved material should the contract. Mueller, v. movant. Tucek (S.D.1994). principal purposes pay this “One of hope you will be able to We summary judgment rule to isolate and If prescribed period. amount within factually unsupported claims.” regarding dispose mat- you questions Catrett, 317, 323-24, Corp. Celotex v. 477 U.S. In Breckenridge, the Colorado Court (1986). stated, Appeals 91 L.Ed.2d 265 S.Ct. “Whether there has been a procedure The rules of favor the breach of a resolution of contract is an issue for the fact summary Breckenridge, trial finder.” cases the merits 851 P.2d at 216. In Inc., judgment Development, than on Bator v. Mines rather failed or unartful Miller, Wright (Colo.Ct.App.1973), accusations. 5 C. & Federal the court stated that “[djetermination Procedure, (1971); Practice party of whether a has Press, 875, performed Viking under a ultimately Janklow contract is (S.D.1985). (citation question of fact.” Id. at 225 omit

ted). ISSUE Here, promissory note definition of default: *4 DO GENUINE ISSUES OF MATERIAL The borrower shall be in default FACT AS TO WHETHER MOE WAS any occurrence of one or more of the fol- IN “DEFAULT” PRECLUDE THE (1) lowing events: the Borrower shall fail GRANTING OF SUMMARY JUDG- due, pay, any when amount MENT? hereunder, any or other of indebtedness in recognized We First Nat. Bank Black of the borrower any to the Lender of third 893, Beug, Hills v. 896 (2) parties; the Borrower shall be in de- 1987),that term ‘default’ is not defined “[t]he performance fault in any of covenant Code, in the Uniform Commercial thus we obligation or under the line of credit or must look to other for a sources definition.” equivalent agreement for future advances Then, Id. at we turned hornbook law (if applicable) any agree- or document or for a definition of default: (3) thereto; any warranty ment related or triggers ‘Default’ the secured creditor’s representation by made the Borrower shall rights Part under Five of Article Nine. prove misleading any respect; false or But ‘default?’ what is Article Nine does (4) any the Borrower or Guarantor of this word; not define the it instead leaves this promissory liquidate, merge note shall dis- parties any scraps to the of common solve, existence, suspend terminate its lying Apart law around. from the modest (if operations, individual), business die imposed by limitations the unconscionabili- appointed any have a receiver for all or ty requirement good doctrine and the of property, of assignment its make an faith, security default is ‘whatever the creditors, for the benefit of file or or have says agreement it is.’ any petition filed under ex- Summers, (quoting Id. at 896 J. White & R. isting bankruptcy insolvency or future or Uniform Commercial Code 26-22 at 1085- (5) law; any change that occurs in the (2d 1980)). ed. (financial otherwise) condition or affairs or of the Borrower or Guarantor of this jurisdictions recognize that Several which, promissory opinion note of the determination of default is not a matter lender, impairs, security the Lender’s of law for the court to decide. Whether a respect or increases its risk with to this question breach or default exists is a of (6) promissory note or an event of default Spada Distributing fact. Palmiero v. Com any agreements shall occur under intended (9th Cir.1954). pany, 217 F.2d 561 “[I]t is repayment promissory to secure the of this equally parties’ well-settled whether the law, prohibited by note. Unless the Lend- ‘presents pure conduct a breach constitutes may, option, er at its declare the entire question of fact that the trier of fact alone ” unpaid principal balance of and interest may decide.’ Concise Oil & Gas v. La. immediately payable due and without no- Corp., Interstate 986 F.2d Gas tice or demand at time after default as (5th Cir.1993) (quoting Turrill v. Ins. Life paragraph. such term is defined America, Co. North 753 F.2d. of (5th Cir.1985)); Breckenridge Technically, Town there securi- was breach Inc., Golforce, (Colo.Ct.App. ty agreement promissory 851 P.2d 214 note contract, all statements and conduct payment on October not make his Moe did determining parties are essential paid it on December but instead default, an modification or whether there was oral find Moe 1984. One could security 57A-9-503, promissory note or waiver of the would under SDCL John Deere. repossess the tractor. Howev- had er, or remedies to a default Deere’s of contract can be modified under breach A CLAUSE WHETHER NON-WAIVER parties.

waived the conduct IN CONTRACT IS THIS ENFORCEABLE? opinion in- The trial court’s memorandum of the written con- dicated that “The terms ad issue that needs to be second Further the ‘course of tract should control. the “non-waiver clause” dressed whether persua- parties is not dealing’ between in this contract. Deere’s brief enforceable However, there is a here sive.” clause as an “anti-waiver” refers to this and conduct of Did the oral statements fact. refer to it as a “non- clause but we will modify agreement? written parties City Lewis v. National waiver” clause. See Fin., v. Fairco Alaska Statebank (N.D.Ill.1993) Bank, F.Supp. (Alaska 1983), par- issue was if the dealing (referring to the clause with waiver and conduct between ties’ oral statements clause). The provisions as a “non-waiver” and November September security agreement between Moe and Deere *5 agreement so that modified the written following provisions: contained the required. The court possession notice (as In the event of default defined on held: hereof), may pos- take reverse side holder may contract be of a written [Modification any and exercise oth- session of the Goods through subsequent con- either effected provided by law. er remedies agreements. Whether a modi- duct or oral (we) if I contract shall be in default This of fact. fication has occurred is pay any shall fail to installment parties superior court found due.... modification, “[g]iven agreed to such had (default) may In such event the holder dealings par- the course of between immediately and without notice declare ” ties .... of this contract due and entire balance (quoting Nat. Bank Alaska v. Id. at 292 expenses payable together with reasonable Alaska, Inc., K. 546 P.2d J.B.L. & of security realizing on the inter- incurred (Alaska 1976)). 53-8-7 See SDCL 586-87 hereunder, including granted reason- est (1990); Jury also South Dakota Pattern See attorney’s fees. able 47-16 for Modification of a Instruction No. or or condonation of breach Waiver by Subsequent Agree- Oral Written Contract a waiver of default shall not constitute ment. subsequent other or breach or default. through affidavits and The record reveals jurisdictions’ inter- We now turn to other depositions that the oral statements and pretations of the “non-waiver” clause. parties herein between October duct modify adopted have two basic rules for appear 1986 to Courts 1984 and repeated late interpreting situations where agreement. Deere sent notice to written accepted by a pay payments have been creditor he had until March 1986 to Moe that (i.e., “non-waiver” charges. who has the contractual including late Moe admits (i.e., clauses) statutory right SDCL he or the first week of June 1986 that 57A-9-503) repossess to the collateral with pay in two agreed to the March installment held that the notice. courts have to with the out Some parts. He acceptance payments of late does not waive when he com- due 1986 balance right of a creditor to affect the harvest. There was no or otherwise menced his wheat subsequent after repossess without notice by which Moe was to date certain Westinghouse Credit $2,000.00. payment late defaults. determining if there was (10th Shelton, Corp. 645 F.2d 869 Cir. complying with v. on the of Moe default

337 1981); Co., Tillquist v. Ford Motor Credit pattern evidenced the continual of irregu- (D.Conn.1989); F.Supp. 714 607 payments. Wade v. lar and late Co., F.Supp. Ford Motor Credit 455 147 right The debtor has rely (E.D.Mo.1978); Hale v. Ford Motor Credit performance continuation of the course of Co., (Ala.1979); 374 So.2d 849 Van Bibber v. right and rely satisfy is sufficient to Norris, (Ind.1981). 419 N.E.2d 115 Other Waters, the reliance element. See supra. imposed duty courts on the creditor to rely supported This policy notify the compliance debtor that strict with of the Uniform Commercial Code which en the time for will be courages development the continual of “com may future else the contract remedies practices through, mercial custody, usage, See, e.g., invoked. Recovery Cobbv. Midwest parties.” between the See (Minn.1980); Bureau 1-102(2) 57A-1-102(2). U.C.C. or SDCL Washington, Ford Motor Credit Co. adaptation South Dakota’s of the Uniform (Tex.Civ.App.1978); S.W.2d Lee v. Wood Commercial Code is found in Title 57A of the Union, Products Credit 275 Or. 551 P.2d South Dakota purpose Code. The of Title (1976); Huff, Nevada Nat. Bank v. 57A is found in SDCL 57A-1-102 and states (1978); Nev. Pierce v. pertinent part as follows: Intern., Inc., Leasing 142 Ga.App. 1) This title liberally shall be construed (1977); S.E.2d Ford Motor Credit Com promote underlying its Waters, pany v. 96 (Fla.App.1973); So.2d purposes polices. Summers, See also J. White & R. Uniform (2) Underlying purposes polices (3d Code, § Commercial 27-2 at 563-65 ed. this title are (a) simplify, clarify To and modernize urges adopt position us to governing the law commercial transac- acceptance payments of late does not tions; waive or otherwise affect the of a credi- *6 (b) permit To expansion the continued repossess tor to without notice after subse- practices, custom, commercial through quent payment stating late defaults to do so usage parties; of the would mean that the “non-waiver” clause is 57A-1-102(1) (2) (1988). SDCL The Uni nullity. — form Commercial liberally Code should be majority A of states who have considered promote construed and its under general the issue adhere to the rule that “a lying purposes policies. First Nat. Bank party secured upon who has not insisted v. John Deere compliance past, accept- strict who has course, payments ed late as a matter of Adopting give the rule that a creditor must must, may validly rely upon before he such a pre-possession notice modification of a repos- clause declare a default and effect contract results both the debtor and the session, give notice to the ... debtor being protected. creditor The debtor would compliance strict with the terms of protected surprise be from and from a dam- repos- tract will be demanded henceforth if aging repossession by being forewarned that Huff, session is to be avoided.” 582 P.2d at payments longer late acceptable. would no be (citations omitted) (emphasis original). Likewise, protected the creditor would be imposing duty The basis for utilizing on the the device of “one letter.” The party party totally secured is that the secured preserve creditor can his remedies so estopped asserting default, rights from his contract that if the account continues in re- because possession pursued his conduct has induced the debtor’s could be as justified believing reliance in that late the contract without further demand or no- acceptable. recognized ments were 57A-1-103 SDCL tice. It this rule does preserves estoppel. place the law of The in slightly position acts the creditor worse repeated which induced reliance are the ac- if because a creditor sends out a letter to ceptance payments. preserve of late rights again The reliance is his and then once ac- another notice would be

cepts payments late FOLTZ, notice re- required. Appellant, The would be second Claimant and John acceptance late quired because again letter the initial could after rights asserted act as a waiver of TRANSPORTATION, WARNER letter. Employer Appellee, repeated acceptance We hold that by a creditor payments late who has repossess property contractual Cigna Insurance of North notify duty the creditor to imposes America, Appellee. Insurer and compliance with the con that strict debtor No. 18372. tract terms before the credi will lawfully repossess the collateral. tor can Supreme Dakota. Court South dispositive plaintiff is if the issue on Briefs Considered Jan. a default exists is a default. Whether properly factual not resolved on Decided judgment. summary motion for Defendant’s Rehearing Denied repossess turns on this default.

Therefore a “breach of the what constitutes peace” repossessing collateral is mature at We reverse this order this time. judgment circuit court and

remand for trial.

MILLER, C.J., and HENDERSON and SABERS, JJ., concur.

WUEST, J., in result and concurs concurs specially.

MOSES, AMUNDSON, Judge, for Circuit J., disqualified.

WUEST, result, (concurring in Justice *7 concurring specially). result, write specially

I concur in point out that we do law South regarding whether the Dakota existence question of contract is a of fact. See breach Jensen, Yankton Ass’n v. Prod. Credit (S.D.1987) (determining N.W.2d question there a breach of whether fact); question of of contract Swiden Appliance & Bank Furniture National (S.D.1984) S.D., (stating N.W.2d of breach contract is a

legal resting “upon conclusion substantial is- rightfully jury of material fact that are

sues questions.”).