*1 496 objective, purpose collateral outside clear of SDCL 32-35-52 is
some protect people highways on our scope operation process to —not attempting judg- aid creditors to coerce has consummat- employed, a tort been ed_ pay claims based on fraud. debtors According to Prosser ... purpose improper involved actions process This claim of abuse is similar ‘usually takes the form of nature Vreugdenhil to that in v. First Bank of advantage, coercion to obtain collateral S.D., 756, (S.D.1991), 467 N.W.2d 760 properly proceeding involved writing major- where Justice Wuest itself, property such as the surrender of legal ity community stated: “[T]he payment money, by the use of or the years procedural due known process as a threat a club. There process requires hearing person before words, extortion, is, in other a form of any significant deprived property is in- By token, lawyers terest.” the same throughout the state have understood for level, At the trial court the two essential years purpose the intended of the Financial factually legally must con- elements be Responsibility Act. Furthermore, appellants sidered. advocate there has been “extortion.” Was there? effect, permitted the circuit court It must determined below. This Court prevail defendant to of an basis jury jump cannot into box. “good “advise of counsel” or faith” defense hearing even the facts. This is 180 without alleged Affirmative defense to the tort of degrees contrary every summary solid process may presented abuse of below judgment case this state. Breen v. See asserting may party same. This Co., Inc., Gear 433 Dakota & Joint (but suggested include that which has been (S.D.1988); Koeniguer N.W.2d v. i.e., briefed), fully advice of counsel Eckrich, (S.D.1988); 422 N.W.2d law) (under settled and the reliance our Ass’n, Blote v. First Fed. Sav. & Loan Judge of Circuit the actions Dobber- (S.D.1988); Int’l, N.W.2d Groseth faith). Only puhl (going good testimony Tenneco, Inc. Inc. may establish the elements or and exhibits (S.D.1987)(Groseth I); Wilson v. N. Great defenses. We reverse on the affirmative Co., Ry. 83 S.D. issue three. part; remand- Affirmed in reversed and part. ined
MILLER, C.J., and WUEST and
AMUNDSON, JJ., concur. Rusch, Arthur L. RUSCH Lana K. SABERS, J., specially concurs. wife, husband and SABERS, (specially concurring). Justice Appellants, III, specially on Issue abuse of write that: process point out Michael L. and Judith KAUKER clearly granting erred in The trial court Kauker, wife, husband and J. summary judgment to Northland Insurance Appellees. Defendants and the acts of Northland bound because No. 17438. agents, which under these cir- its collection Supreme Court of South Dakota. cumstances, attorney include Northland’s attorney gen- an assistant may include 24, 1991. Considered on Briefs Oct. Department official of the eral and an Decided Dec. the circuit court’s “ex Commerce. As for Rehearing Denied Feb. of Northland’s collec- parte” activity aid efforts, the best can be said simply mistake—he had no it was a activity. in such taking part business *2 McCulloch,
James E. Minick & McCul- loch, Vermillion, plaintiffs appel- lants. Nelson, Bierle, Mi-
Robert R. Nelson & chels, Yankton, appel- for defendants and lees.
SABERS, Justice. appeals judgment
Rusch from a in favor claiming court of Kauker concluding erred in Offer binding agree- ment to was not a parties. We reverse and remand.
FACTS (Rusch) Arthur Lana Rusch owned a Vermillion, Canby, house at 620 S.D. in this 1976 until lived house from he a new residence in Vermillion moved to had bal- in 1982. The house a $20,000. This mort- approximately ance of gage on sale” clause contained “callable request full allow the bank to which would mortgage if became payment of the title person. Rusch listed other vested sale when he moved the house for residence, made dur- new no sale was defray expenses, Rusch ing year. To nine period leased house months. This lease was later converted month basis to increase a month to marketability of the house.
In
Rusch relisted
September
(Roach)1 Century
house
Roach
with Sue
requiring
$67,500
provision
21 at
financing.”
buyers
“arrange own
(Kauk-
1983, Dr.
July,
Michael
er)
Memphis, Ten-
from
came to Vermillion
looking
employment
into
with
nessee
of Medi-
School
University of South Dakota
interested
his wife were
cine. He and
area.
housing in the
obtaining
Vermillion
agent was a real estate
Kauker’s wife
changed
Christensen.
later
her name
1. Roach
married
Memphis,
caused them Kauker insisted on the addition of two sen-
Century 21
Century 21
in Vermil-
tences to the standard form:
to contact the
office
However, Kauker returned to Ten-
lion.
Appliances mechanically functioning
&
making any decision as to
nessee without
working
systems to be
order
clos-
housing.
ing day.
contingent
This
offer
Buyers’ approval
Deed.
Kauker met
On October
*3
added).
(emphasis
During
for the second time.
with Roach
houses
shown to
meeting, several
following
this
a discussion
Roach testified that
Kauker, including the Rusch house. Roach
Kauker,
that this
with
she informed Rusch
had informed her of
that Rusch
testified
approval contingency
apply
was to
to form
she
mortgage on the house and that
only.
accepted
Rusch
On October
12, 1983,
Kauker. On October
informed
offer,
signed by
parties and
it was
be-
offer on the Rusch house
Kauker made an
agreement (Agreement). The
came their
n
financing by means
required seller
which
possession
closing
December
closing/posses-
and a
of a contract for deed
unchanged. Following the
date remained
1, 1983. Rusch
sion date of December
signing
Agreement,
gave
Rusch
rejected this offer.
to meet the
tenants notice of termination
possession
December
date.
17, 1983, Kauker made a
On October
on the Rusch house. Prior to
second offer
As a result of some confusion between
offer,
Rusch informed
expiration
responsibility
for
Rusch and Roach as
pro-
that the interest rate on the
Kauker
Deed,
for
preparing
Contract
was not
posed
satisfactory
for deed was
contract
15,1983.
prepared until
Kauker
November
purchase price was not.
Octo-
but the
On
testified that he did not receive the draft
20, 1983, Kauker made a third offer on
ber
respond-
until November
1983.
house. This offer was satisfac-
the Rusch
approxi-
for Deed
ed to the Contract
tory
in interest rate and
to Rusch
mately
objections on
ten
November
price.
objection
primary
1983. The
to the Con-
Deed,
contracts for deed are
tract for
prepared on a standard
The offer was
apparently
opinion
illegal,
resulted from an
agreement form
contained
offer and
attorney.
per-
from a Tennessee
Roach
following language:
Rusch
De-
suaded Kauker and
to meet on
accepted by
8.
If this offer is
acceptable
1983 to work out an
cember
contingent upon
or if offer
Seller
deed.
FHA,
obtaining
or other
buyer
VA
qualify
he is
loan and
unable
1 meeting,
At the December
Kauker ex-
loan,
agree-
such
then this
or obtain
pressed
mortgage
concern over the
case)
(in
abrogat-
ment
either
shall be
during
house.2 Roach
Rusch
testified
ed and of no force or effect and
meeting
throughout
negotia-
money
re-
Buyer’s earnest
shall be
tions,
encouraged
unsuccessfully
she
Kauk-
turned to him full.
legal counsel.
er to obtain South Dakota
meeting
Following this
Roach and Rusch
Upon approval
acceptance
of this
changes to the
made several
Agreement by Seller and in event
attempt
satisfy
objec-
pur- Deed to
Kauker’s
Buyer
complete
shall not
tions.3 A second draft was delivered to
agreed, Buyer
as herein
shall
chase
it was
deposit
made
him.
Kauker on December
but
forfeit the
2)
gave
pay
full in
testimony
Rusch would
that the bank
oral
2. There
rights
the Rusch
would not
exercised its
to de-
assurances that
the event the bank
Kauker,
proposed
sale to
payment
be called
to the sale.
mand full
due
give written assurance.
days
refused to
in-
There would be 90
notice
following any
to cancel the contract
tention
of the contract for deed
The second draft
default.
4)
provided:
only upon
Inspection
reason-
of the house
being
property
dam-
1)Monthly payments
principal
able belief that the
would include
injured.
aged, neglected or
and interest.
rejection
delay has been
rejected. Kauker’s letter of
“Substantial
encountered
also
Decision,
development
of this
fault for
primary objections:
two
stated
delay properly lying at
such
this Court’s
approve the contract that
could not
We
signed findings
The
court
door.”
trial
rea-
presented to us for two main
of law
fact
conclusions
on December
did
not involve
sons.
given
and concluded
the sub-
request approval of the sale from
negotiations that
stantial
occurred between
Bank
party,
involved third
National
Kauker,
the Offer
Rusch
Dakota,
that holds
of South
was not intended to
a final or
$20,000
feel
on the house. We
of about
agreement,
complete binding
thus no en-
an ac-
approval
that their
needed for
existed
Rusch
forceable contract
con-
ceptable
Our second
transaction.
Kauker.
protection
buyer’s
cern was lack of
appeals claiming
rights concerning
deposits,
cash
addi-
1) concluding
major
court erred
that there
improvements.
We could
tions
*4
binding agreement
parties,
no
between the
repossession, stipulated
30 day
not risk a
binding agreement
if
even no
existed
contract-for-deed,
and
original
on such
parties,
he is entitled to dam-
large investments.
ages
requests by
as a
of
Kauker.
result
letter,
Following receipt
this
Rusch
of.
1. OFFER AND AGREEMENT
requested
Kauker
that Kauker
wrote
and
be
a
for deed that would
submit
contract
Rusch claims the trial court erred
respond
to
acceptable
him. Kauker did not
concluding
Agree
the Offer and
point
than to
out that the December
other
binding
complete
final
not a
and
ment was
1,
passed and no further
1983 deadline had
given
of
agreement. Conclusions
law “are
negotiation was desired.
appeal”
court on
and
no deference
this
Dept.
are reviewed de novo. Permann
and
Despite
response,
prepared
no
Rusch
D.,
113,
Labor,
411 N.W.2d
Unemp. Ins.
for
of the contract
delivered
third draft
of
(S.D.1987).
are confronted here
117
We
negotiations
No
deed.
discussions
questions
law
mixed
of
and fact.
1983, with
15,
on this draft. On December
had
his
gave
[Mjixed questions
notice to Kauker of
of law and fact
Rusch
[are]
re-renting
damages by
in which the historical facts
mitigate
questions
intention
established,
house,
rule of
until
admitted or
but no renter was found
are
undisputed, and the
is wheth
Rusch
law is
issue
April, 1984. On December
statutory stan
satisfy
facts
er the
against
alleging
Kauker
breach
filed suit
Agreement
“Offer and
to Purchase”
dard^]
specific performance
dam-
sought
118,
quoting
Id. at
Pullman-Standard
ages.
19,
Swint,
273,
n.
456
289
102 S.Ct.
U.S.
19,
66,
19
n.
L.Ed.2d
80 n.
a memorandum
The trial court issued
case,
(1982). In
are estab-
facts
for sum-
denying Rusch’s motion
decision
facts
is whether those
lished and
issue
judgment
October
mary
binding agreement. Mixed
constitute
motion
sign
denying the
failed to
the order
type
fact
of law and
“are
questions
summary judgment
April
until
1985.
for
may
review.” Matter
freely
of
to trial before Circuit
The matter went
Intern., Inc.,
442 N.W.2d
Groseth
February
Since
Judge
1988.
Talbott on
Permann,
at
See also
not made
decision
court had
attempted
supplement
late
house had
made
determina
to reflect
court
its
the record
trial
Hall, 323
specific performance
primarily
and that
on Sabow v.
sold
been
Sabow,
(S.D.1982). In
This
substan
longer sought.
motion
negotiations
is-
were also conducted.
finally
court
dropped. The trial
tial
later
However,
not limit
negotiations were
opinion
these
on Novem-
its memorandum
sued
deed;
accept-
to the final
ed
of
favor
ber
the offer and
back to
delay
follows:
extended
ed the blame
party could not
During
process
several substantial
contract and that a
unrea-
changes
approval
and additions
of the final doc-
sonably withhold
offer
purchase
at
agreement
were made
necessary
ument
to consummate the trans-
Sabow,
appellee and
request
Dr.
O’Brien,
property.”
fer of
387 N.W.2d at
attorney.
It is clear from these
added). Therefore,
(emphasis
since
that the
facts and circumstances
expressed
essential
terms were
and un-
offer and
did not intend the
changed,
Agreement
was final and
agree-
complete
a final or
Thus,
complete.
the trial court’s conclu-
ment on the terms and conditions
sale.
contrary
sion to the
is erroneous under our
added).
present
In the
(emphasis
questions
Id. at 863
of mixed
standard
review
case,
provisions
concerned
Permann,
law and fact.
411 N.W.2d at
deed,
not the
Thus,
underlying Agreement
ment.
Since the
was final and
Therefore,
unchanged.
left
Sabow
complete, we must determine whether
distinguishable.
factually
objections
Kauker’s
to the Contract for
Development Corp.,
v. R-J
O’Brien
Agreement,
Deed were valid. Under the
(S.D.1986), reh’g granted
In level an Conclusions of Law and VII, agree. expressed: the trial court subsequent thereto, II. Defendant sub- I agree with the trial court. Under Per- (Plaintiffs’
mitted a Contract Deed mann, these conclusions were not mistakes 11), Exhibit No. which Defendants re- of law. 28, 1983, ceived on or about November Why, if a legally there was binding con- approve and which Defendants did not why if there no ongoing nego- tract — ultimately rejected. tiations attendant in the relationship, did Plaintiffs, Defendants, III. and the rela- Ruschs three different submit Contracts (sic) subsequent tor thereto held a meet- (Exhibits For Deed to sign? Kaukers to ing attempted to resolve differences 11, 12, 13). The answer is evident: which difficulties Defendants had binding there existed no due to submitted, with the For Deed contingency aggressive above ac- meeting resulted in a redrafted compromise was underway get (Plaintiffs’ Contract For Deed Exhibit sign. is, the Kaukers to Kaukers’ sin ap- 13) being submitted to the Defen- parently, refused to be bullied. 3, 1983, dants on or December about It’s America! You cannot be forced into a however, redrafted this Contract For provides contract. Our law state incorporate SDCL Deed did not all of the re- 53-3-3: quested “Consent is not mutual unless the revisions Defendants and such, parties agree meeting upon thing did not constitute a same binding the minds Here, and a same enforceable sense.” were of a mind; spawning different the ne- gotiations; triggering the changes IV. Substantial occurred Defendants, between the Plaintiffs and in three If contracts of deed. there is not a attempt in an resolve the disagree- mutuality of consent material ments and concerns which matter, is, Defendants quite simply, there no contract. had with the last submitted Contract For Melby, Ward v. 82 S.D. (Plaintiffs’ Exhibit No. how- (1966) N.W.2d 526 held: ever, subsequent Contract For Deed This court held that the correct *7 incorporating of objec- all Defendants’ specific performance rule in cases is that provisions requested tions pre- and was the contract with all of its material terms pared by the Plaintiffs or submitted to proved and by conditions must be evi- Defendants, such, the and as binding satisfactory dence so clear and to the agreement was enforceable reached be- mind of the trial as to leave no doubt as and the tween the Plaintiffs Defendants. Melby, Ward v. negotiations V. substantial Given the (S.D.1966) N.W.2d which occurred between the Plaintiffs signed (it Kaukers the initial “offer” was subsequent and Defendants to the Offer denominated an in the contingency “offer” Agreement and Purchase initially en- provision) expressed possession that which parties, the tered into it is clear granted buyers was unto Decem- parties that the not intend did the Offer place. ber 1983. This never took Sever- and to Purchase to be a final expressed al times the their complete binding agreement or Kaukers on the strong they terms of the sale of the concerns that wished to close and conditions subject by property. the deal the first December so their days Defendants, by requested by the family together could be Christmas extremely important had This due-on-sale clause not been revised was Vermillion. family. according request, to Defendants’ and the redrafted Contract For did not Deed case, and In the instant the Offer contain the escrow for the by to Purchase drafted Christen- was requested Warranty Deed as the De- sen, agent. acting as Ruschs’ who fendants. ...2 must important fact not be One crucial overlooked, however, and that is that all of This Court should consider that mort language gage is lien intended by Ruschs the lan- Plaintiffs to maintain on cited testimony guage specific property and of Christen- contained a “due on sale” such, language As is clause. This Court is well sen. hers and aware that we upheld enforceability represents in- have hers alone further her of due sale commentary on clauses. terpretation Savings discus- First Federal and Loan Thus, Rapid City Kauker. Kelly, she had Mrs. Association sions (S.D.1981); entire of N.W.2d Kaukers contend that the source First Federal Sav argument ings “form” substance Loan Association Lake Ruschs’ over Storm Christensen, Lovett, (S.D.1982). agent, their and v. This lies with own sign improper inappropriate interpreta- Court further concluded that the her ing of a for deed tion of and discussions with is a sufficient agree. conveyance is Kaukers. She not the to entitle a holder to Her are concluso- declare the entire im judge. characterizations debt through mediately payable. ry, hearsay evidence. due and First Federal Savings Rapid Loan Association of 481 telephone Ruschs further cite a conversa- (S.D. City Kelly, Judith Kauker Christen- tion between 1982). writing, I Per this not called have sen, and maintain the contents that con- “due on sale clause” “defect.” Nei versation, is which Ruschs contend “uncon- special Kelly. ther did Mr. Chief Justice’s controlling testimony,” as tradicted concurrence, regard, in this somewhat agreed that proposition “the mystifies My point Why would me. this: right had a the ‘form’ of the buyers to have Kaukers, anyone buying property approved by their contract reviewed and deed, im under a to be want attorney.” mediately action faced with foreclosure VIII, Findings of Fact VII and entered buying? property on the are clearly court, by the trial are not errone- During negotiations, offered to ous: financing proceed from the Veter- to secure in testimony VII. Plaintiffs admitted discharge liens ans Administration and subject existed The said against property. Bank, held premises by a Vermillion acceptable. that this not give not the bank would foreclosing if there A Decision After Trial” assurance “Memorandum Findings into the of Fact property. incorporated a sale of of Law reference. Conclusions (sic) testimony The of the relator VIII. standard, applying clearly erroneous redrafted Con- further indicated that the ques- not to decide factual our function is (Plaintiffs’ tract Exhibit question tions de whether novo. contained errors three *8 made find- have the same this Court would comply did not with redrafted instrument ings, on the entire evidence we original the objections Defendants’ whether (Plaintiffs’ left a definite and firm conviction For are with Exhibit Contract re Es- 11). has been made. included a default that mistake No. These errors (90) Hobelsberger, S.D. thirty (30) ninety tate days time of versus of Buyers’ reasonable; contingent upon sion: offer is requests “This Each of these were retrospect, you, contemplate approval reader now Contract for Deed." the of a inserting provi- wisdom of the Kaukers’ the the $20,000 (1970). Hereby, improvements I set forth the as some worth of observations/findings; initially these trial court’s Defendants intended to make 175,176, of pages found on and 177 the premises, are the in case of the Plaintiffs’ failure; settled record: premises default on the title good condition that he mortgage exists were not the admit that a Plaintiffs required; period should premises, by held a bank in the foreclosure these Vermillion, ninety days; that the said Bank would he wanted a be extended to give assurance of not fore- change provisions; no written made in the re-sale he but, closing orally, a sale inspection if there was right the Plaintiffs’ of wanted indicated would not so fore- limited; Bank premises the he to be wanted close. deposit an escrow for the deed; found in payments The realtor testified that she and he wanted the principle No. 13 three errors. The instru- in- Exhibit be amortized to include still contained a default time terest. agreed to 90 days, and Plaintiffs had Dr. Kauker also testified that the Plain- days default to occur. The due-on- tiffs had made settlement the title taken care of sale clause had been problem, that there was of record an according to the Plaintiffs’ wishes. assignment of rents and he asked the got permission The realtor Defendants’ to void the due-on-sale Plaintiffs clause opinion which fur- to secure a title to the Bank. by Attorney Craig Thompson, see nished As to No. Dr. Kauker felt Exhibit Defendants’ Exhibit “A”. incorporate objections it did some Additionally, realtor admitted that Exhib- he there still had made but re-draft of the it No. garage yards, rubbish in the area Deed, not contain the escrow also did parts, full of was one-fourth broken warranty for the deed to be appliances inspected could not be be- Plaintiffs, by given requested as cause of boxes and so forth. Dr. Kauker any language concerning did not contain provide felt that Exhibit No. 13 did not right prof- the Defendants’ excess period 90-day for the default that had might be realized from the sale its that to; requirements agreed that his been premises if there was a fore- of the right improvements that his to secure by attempt- The realtor closure default. properly by made him were not met and omission of the escrow justify ed to requirements for an escrow No. 13 arrangement from Exhibit agreement were not met. Dr. Kauker procedure that was “standard” because inspection right agreed that the though it not in the contract. even required limited as he he testified that was aware Dr. Kauker assignment of rents and the was the realty but was not of a “loan” on payments. amortization of “mortgage.” Dr. Kauker aware testified that he offered to Dr. Kauker he had received Exhibit No. testified that mortgage, pay off the bank Vermillion, 1983 at 11 on November should-get approval to the bank Dakota, the same date on which he South Defendants; Dr. realty sale of the attorney’s opinion as to title. received the to take over the bank Kauker offered 29, 1983, Dr. Kauker sub- On November offered to enter into a objections list of that he made mitted a Plaintiffs, arrangement 11. He he No. testified that to Exhibit proposals refused. all of mortgage by reading first knew of the opinion, the existence attorney’s title Plaintiffs’s Exhibit No. I conclude that mortgage being simply listed the attor- 13, although re-type job, did not “defect.” ney as a title reached agreements conform discussing when that he was also testified Dr. Kauker modifica- Exhibit defect; to be made to that he tions concerned this title about Plaintiffs’ mine). supplied deposit (emphasis cash as well protect desired to *9 provides: following 21-9-2 “The SDCL
obligations specifically KANTA, cannot enforced: Appellee, Susan J. Plaintiff and (6) terms of which are agreement, An certain, precise sufficiently to make the not clearly KANTA, Sr., is to be done ascertain-
act which B. Gerald Defendant eq- held Wiggins, In Appellant. able.” performance remedy specific uitable 17371. always the sound discretion of addressed to court, according to the facts Supreme Court South Dakota. my opinion, in each case. circumstances Argued Sept. equitable did not abuse his the trial court discretion. Dec. Decided Plaintiffs, as Lastly, ex- behooves court, to pressed by the trial sustain their establishing in proof an enforce-
burden contract; court concluded this trial
able agree. done. I Trial court
had not been Defendants, on
held their counter-
claim, not same for the same uphold could See, Hall,
reason. Sabow (offer (S.D.1982) a contract where substantial parties occurred after signed). Kauk-
offer to return of their $500.00
ers are entitled a approximately
deposit, eight held for now eight require specif-
years. years, After couple buy performance, requiring
ic Dakota, Vermillion, is im- South
home in non-sensical, untimely, and with-
practical, in Law. I note support
out
record, eight years, during these Now, question.
Ruschs sold the house solely damage it is case. Un-
apparently, damages my theory, would
der I Respectfully, do call attention
reached. my on this Court that Brothers
dropped supplement their motion specific performance was no
record that note, however,
longer sought. do findings fact includ- proposed
Plaintiffs’ $13,000.00 finding approximately
ed a complaint also re- damages. Ruschs’ alleged damages an of a
quested breach reached Again, would not be
contract. my
under thesis. state that Justice
I am authorized to joins this dissent.
WUEST