*1 BANK, SECURITY NATIONAL

EDGELEY, Dakota, North Appellee,

Plaintiff Wald,

Allen WALD and Debra Sue Appellants.

Defendants

Civ. No. 930018. North Dakota.

Aug. 1995. *2 Minch, Serkland, Lundberg,

Roger J. Erickson, McLean, Ltd., Fargo, for Marcil & appellee. plaintiff Dickson, Dickson, A. of Thomas A. Thomas P.C., Bismarck, appel- for defendants Wald, appel- Appearance Debra lants. lant. WALLE, Chief Justice.

VANDE appealed and Debra Wald Allen Sue which, part, dismissed final against supplemental their first amended counterclaim Se- ditional time submit materi- curity Bank and denied their motion als on the Walds’ first amended counterclaim. materials, file a of filing supplemental second amended counterclaim. We Instead *3 part, part, in in and prejudice affirm reverse remand Walds moved to dismiss without counterclaim, proceedings. for further first amended and separate against Security filed a action Na- Security and 1991 the Walds and tional, presented asserting the claims in their promissory four *4 decency, regarded to atro- as Code, Commercial to under the Uniform cious, utterly intolerable in a civilized good-faith obligation could attach. which community. Generally, the is one Motors, v. Jerry See also Harmon Inc. First of the facts to an which recitation Co., 472 748 Nat’l Bank & Trust N.W.2d community would average member Ista, (N.D.1991); Production Credit v. Ass’n actor, against his arouse resentment ’ ” exclaim, “Outrageous!” and lead him to Similarly, determining in this case we need not In whether actor’s tort outrageous, decide whether that exists a commer is an actor conduct extreme and context, because, does, assuming cial it “never ... has done no is liable where he rights legal no his in a presented have evidence affida more than to insist permissible he well way, though to even is vit or otherwise establish existence duty insistence is to cause aware that such certain a contract under the Uniform Com Torts Code, emotional distress.” Restatement 2d good-faith mercial which the obli 46, v. T g. § comment AT & See McCormick gation could attach. National’s reli Cir.1991), (4th Inc., Technologies, 934 F.2d 531 legal rights ance on its and remedies does 1048, denied, 112 rt. 502 U.S. S.Ct. not constitute bad faith. We conclude the ce (1992); 912, Hayes Bak 116 L.Ed.2d 813 v. properly granted judg trial court Workers, 753 ery Confectionery & Tobacco bad-faith claim. ment on the Walds’ (W.D.Ky.1989), F.Supp. affirmed, 914 209 (6th Cir.1990); v. Therrien F.2d 256 United 46, Under Section Restatement 2d Lines, Inc., (D.Colo. F.Supp. 1517 Air 670 (1965), the of an action for Torts elements 1987); Ins. v. Paul Fire & Marine St. intentional infliction of emotional distress are Neff Co., 18, (1990); 795 304 Ark. 799 S.W.2d is in outrageous conduct that extreme and Morris, v. Ins. Co. State Farm Automobile emo or reckless and causes severe tentional (Ala.1993). 440 612 So.2d Hummel; v. tional distress. Insurance, Inc., Crop 498 N.W.2d Northern de initially if a The court determines Lindblad, (N.D.1993); Muchow v. may reasonably regard fendant’s conduct N.W.2d 918 The threshold ele Swenson; outrageous. as extreme outrageous conduct is ment extreme differ, people If could Muchow. reasonable narrowly outrageous limited to conduct plaintiff is entitled to have the trier-of-fact decency.’” possible bounds of exceeds “‘all sufficiently is determine whether the conduct Muchow, at Re [quoting liability. outrageous to result extreme In d]. Torts comment statement 2d Swenson; Muchow. Muchow, quoted at we comment d: that, given a In Muchow we concluded de- prior experience with the police far have found officer’s

“‘The cases thus decided cedent, investigation of the circumstances liability only con- his where the defendant’s dece- It her and statements outrageous. has extreme and death duct unkind, family, inconsiderate and enough defendant dent’s while has not been of extreme and did not rise to level acted with an intent which is tortious outrageous “Well, deny going conduct. We held reason- I’m the motion to persons disagree po- amend, able could not that the In amend. the motion to lice officer’s conduct was not extreme and making any way I’m not statement one outrageous, summary judg- and we sustained claims, validity other against po- ment dismissal of the action but it seems to me that if there are some lice officer. claims, valid that could be handled some separate action.” Swenson, majority of this court con- allegations employer cluded that that an A decision on a motion to amend agent guilty employment its were discrimi- 15(a) pleading is ad N.D.R.Civ.P. regarded nation could be as ex- dressed to the sound discretion of the trial outrageous treme and conduct. that ease appeal court and will not be overturned on allegations supervisor there were had absent an abuse of discretion. First Inter engaged gender against discrimination Rebarchek, Fargo, N.A. state Bank employee supervisor subordinate who N.W.2d 235 A court abuses its suffering deteriorating knew was from a *5 arbitrary, if it discretion acts in an unreason that, majority emotional condition. The held able, manner, or unconscionable or if it mis circumstances, per- those reasonable interprets misapplies law. the Knudson disagree sons could about whether the defen- Director, Transpor Dep’t v. North Dakota dants’ outrageous conduct was extreme and tation, a reversed dismissal. case, In this of the court’s case, In allegations against this the denying rationale for the motion to Walds’ Security do not to National rise the level of file a second amended that counterclaim was outrageous Security extreme and conduct. sepa those claims in “could be handled some obligation National was under no to release However, rate action.” under N.D.R.Civ.P. to the proceeds Walds the insurance from the 13(a), if a claim arises out of the same “trans combine, and its conduct cannot subject action or occurrence that is the mat regarded degree” be as “so extreme in as to claim,” ter of opposing party’s the is a it “beyond all possible decency” be bounds of compulsory must plead counterclaim and “utterly toor in intolerable a civilized” in response opposing party’s to the plead society. We hold that court properly the ing. Greenwood, Klem v. granted summary judgment on the Walds’ (N.D.1990); Dobesh, Dangerud v. claim of intentional infliction emotional plead N.W.2d 328 The failure to distress. compulsory response counterclaim in The Walds also contend that the court opposing party’s pleading precludes in denying abused its discretion their motion being counterclaim from raised in a subse counterclaim, which, to file a second amended Klem; quent Dangerud. action. We have substance, in alleged Security National construed “transaction or occurrence” broad had agreement breached written to subor- ly multiplicity to avoid of suits and mean security dinate its interest so the Walds claim “logically op that is related” to the could obtain loan from Bank of North posing party’s claim. Leo Lumber Co. They argue Dakota. that the second amend- Williams, ed counterclaim was based information discovered course this action. Here, the Walds’ second amend Security responds that the court did alleges Security ed counterclaim Nation refusing not abuse its discretion to allow agreement al breached a written to subor to file a counter- security dinate its interest so the Walds claim, request timely. because their was not could obtain a loan from another lender. motion, denying “logically the Walds’ court That counterclaim is related” to said, part: Security pleading. National’s Their counter- result; in the Justice Mesehke concurred compulsory and must be raised claim is specially concurred and filed pleading Justice Levine response to National’s con- opinion; and Chief Justice VandeWalle raising it subse- in a precluded II, parts I and dissented motion, curred quent the Walds’ action. III, opinion. filed not whether the trial court did consider notes: compul- was a counterclaim second amended sory To the court’s counterclaim. the extent JOHNSON, PHILIP who “Justice J. those claims “could be

rationale was was a Court when member action,” separate the court in some handled heard, participate not in this deci- did misapplied compulsory on counter- the law sion. also Although claims. the court said Justice “Justice NEUMANN and timely, we decline to motion was Walds’ SANDSTROM, being members misapplication of its speculate on effect heard, Court when this case was did not law its ulti- compulsory-counterclaim on participate in this decision.” of Walds’ motion to amend mate denial conclude the court their counterclaim. We at 187. misapplying the law abused its discretion majority Court is neces- counterclaims, and compulsory we remand sary pronounce a Const. decision. N.D. of the Walds’ motion to for reconsideration provides: Art. file second amended counterclaim. “A court shall be summary judgment dismiss- We affirm *6 necessary quorum a or to to constitute of counterclaim. al the Walds’ decision, pronounce provided a the the motion We reverse order their legisla- supreme not court shall declare file counterclaim and a second amended unless at tive enactment unconstitutional proceedings consistent remand of of court so least four the members the opinion. with this decide.” disquali Judges properly called to sit for MESCHKE, NEUMANN, LEVINE and all, justices of may part, constitute or the fied JJ., concur. Robinson, majority. ex rel. Linde v. 35 State (1916) 512, 410, 160 [Robinson N.D. N.W. SANDSTROM, Justice, special- concurring I] ly. the five The Court consists of III, The of partially relies 6, 2, by § justices, Art. elected N.D. Const. Insurance, Inc., Crop v. Northern 6, 7, pro- Art. people. the N.D. Const. 174, Al- 181-87 N.W.2d vides: by though I concur in the result reached the my majority, separately express I write justices supreme the court shall be “The of III of Swenson was view by for ten- electors of state chosen majority of opinion of a constitutional terms, justice year arranged that is so one Court. years. every They shall hold elected two duly quali- until are office their successors 16, argued on December Swenson was fied, compensation as and shall receive 24, 1992, on March 1993. The and decided law, compensation provided by of but the Erickstad, opinion Ralph J. was authored any during justice diminished shall Judge. A footnote states: “Surro Surrogate his of term office.” gate Judge Ralph J. Erickstad was Chief heard, 1,1993, duly and at the time this case was elected and January Justice As of pur judge of Jus- surrogate qualified Supreme served as for this Court consisted Levine, VandeWalle, Mesehke, 27-17-03, Swen Neu- N.D.C.C.” tices suant to Section mann, Sandstrom. opinion n. The son at 176 1. reflects such, justice, question A former as retains no resid- issue so there would be no as to the validity judgments might and orders that act, any power to ual more than former dispute on pending during be issued cases governor public or service commissioner. I, period. at Robinson N.W. 512. Spaeth ex v. Olson See State rel. ex rel. Court, ultimately consisting totally Sinner, State judges, following justices’ district decla- Spaeth ex rel. v. Olson determined whether disqualification, rations of held the terms and George I. Allen Olson or A. was Sinner Gov- justices governed by tenures of the same days ernor North Dakota the first provisions as other state officers. Robinson Court, in of 1985. This an authored II, 515, 160 N.W. at 518. Erickstad, by then Chief Justice wrote: justice may designated retired as a 1981, prior January 1, “[OJfficials “who surrogate judge may sit on the taken, subscribed, filed with have provided by the Constitution. Secretary of State oaths office 6, § N.D. Const. Art. 11: qualified shall have without neces- any justice judge “When or conflict shall, sity any further act at the earliest in pending of interest or is cause unable January moment of become the physically to sit in court because he is or incumbents of the offices for which mentally incapacitated, justice, the chief or elected, possessors justice stead, have been acting of all assign his shall duties, powers, judge, justice judge, retired to hear responsibilities the cause.” the said offices.’ specified grounds

None existed in justice disqualification. Swenson. No filed a assignment There was no of the former Chief foregoing reasoning, “Based we justice Justice to act for a with a conflict of that George currently, hold A. is Sinner justice physically interest or for a or mental- and has been since first moment of ly incapacitated. January 1,1985, the Governor the State grant of North The former Chief Justice not a Dakota. We therefore mem- *7 decision, ber of the Court at the time of the original enjoining writ Olson exercis- serving by assignment. and he Only ing powers duties of Office of two of those act any entitled to concurred in Governor of State of North Dakota.” part majority manner to III. Thus a did not Olson at 883-84. The issue was not without pronounce decision III of Swenson. great consequence. Had Olson been entitled provides: N.D.C.C. 27-02-22 act, to continue to he would have filled two majority “The concurrence of the Court, vacancies on this which were subse- judges of necessary court is quently appointments filled of Gover- pronounce judgment. If a nor Sinner. concur, reheard, does not must be but rehearings may no more than two Following the elections of a similar majori- had. If on the rehearing dispute arose majori- as to who constituted a ty judges concur, judg- does ty of this Court. Robinson I State ex ment must be affirmed.” Robinson, rel. Linde v. 35 N.D. (1916) Finally, I note that III of Swenson is newly N.W. 514 [Robinson II]. Three apparently “transitional” justices elected contended took office on lacking majority. a Constitutional Monday first December as had provided justices for first elected after NEUMANN, J., concurs. statehood; outgoing justices contended they continued to serve until Mon-

day January, provided statute then

state officers. I II. Robinson The At-

torney General the Court to asked decide the National executed notes first and second amended counterclaims.1 Security which National loaned the Walds action, Meanwhile, in granted the court $350,000, Security gave about and Walds Security summary judgment National on the security per- interest in certain National first amended Walds’ counterclaim. Final property, including equip- sonal their farm judgment granting Security was entered Na- By crop. May ment and recovery tional from the Walds on the under- promissory Walds had defaulted on debt, lying dismissing with prejudice the notes, them, Security and National sued counterclaim, Walds’ first amended and de- $151,960.94 seeking judgment and fore- nying the Walds’ motion to file a second security personal closure of its in the interest amended counterclaim. property. The Walds contend that the court district answer, initially pro filed a se granting summary judgment erred in on Security generally denying allega- National’s They their first amended counterclaim. ar- Later, tions. the district court allowed the gue genuine that issues material fact exist Walds, counsel, through to file an amended on their claims for the tort of faith bad counterclaim, alleged, answer and which for intentional infliction of emotional distress. substance, parties’ security that agree- Security responds National that the Walds’ proceeds ment covered combine and from genuine amended counterclaim no raised combine; harvest, that the 1991 fact, issues of material because the bank had destroyed by the combine was fire and a duty no to the Walds to release the insurance check proceeds for insurance was issued proceeds from the combine. jointly Walds; Security National Security “intentionally, Summary judgment maliciously attempted and in bad faith” if, appropriate N.D.R.Civ.P. 56 is after view prevent the finishing Walds from their 1991 ing light the evidence most favorable by refusing harvest to release the insurance opposing party, genuine there are no proceeds so the a replace- Walds could obtain conflicting issues of material fact or infer ment combine. The Walds characterized ences which can be drawn their counterclaim as a tort action for bad undisputed facts, only or if the issues to be faith intentional infliction of emotion- questions E.g., resolved of law. Hummel al distress. Clinic, P.C., v. Mid Dakota After discovery, party seeking Walds moved summary judg to file initially a second amended answer coun- ment must show the of a absence terclaim, alleged, substance, which genuine issue of material fact. Union State Woell, National had breached a written Bank v. agreement to security burden, subordinate its inter- Once the movant has met initial so opposing est the Walds could obtain a loan from the party may motion not rest Bank of North Dakota. allegations The district court pleadings, mere or denials in present denied the Walds’ to file a competent motion but must evi admissible counterclaim, granted Security Na- dence comparable affidavit or other summary tional’s judgment motion for on the genuine means to show the existence of a debt, underlying parties Weiss, Wright, allowed the ad- issue material fact. Paul in the district. pending judge 1. That action is before different criminal, Stedman, even or that he has intended to son & Merrick distress, inflict or even that his emotional by “mal- conduct has characterized been Woell, viability of a we considered the ice,” aggravation degree which obligation tort action for breach of plaintiff punitive would entitle the dam- in commercial context. We held good faith ages Liability been for another tort. has existed, that, assuming the tort so found where the conduct ease, proper in because character, outrageous in and so extreme asserting the failed to party tort had degree, beyond possible go as to all bounds duty of a contract or establish the existence