First Nat. Bank of Hettinger v. Clark

• Decision Date: 14 April 1983
• Docket Number: No. 10338,10338
• Citation: 332 N.W.2d 264
• Parties: FIRST NATIONAL BANK OF HETTINGER, a national banking corporation, Plaintiff and Appellee, v. Cecil R. CLARK and Alice E. Clark, Defendants and Appellants. Civ.
• Court: North Dakota Supreme Court

Page 264

332 N.W.2d 264

FIRST NATIONAL BANK OF HETTINGER, a national banking

corporation, Plaintiff and Appellee, v. Cecil R. CLARK and Alice E. Clark, Defendants and Appellants.

Civ. No. 10338.

Supreme Court of North Dakota.

April 14, 1983.

Lamb, Schaefer, McNair, & Larson, Fargo, for plaintiff and appellee; submitted on brief by Michael D. McNair, Fargo.

Howe, Hardy, Galloway & Maus, Dickinson, for defendants and appellants; submitted on brief by Albert J. Hardy, Dickinson.

SAND, Justice.

The defendants, Cecil R. Clark and Alice E. Clark (Clarks), appealed from a summary judgment in which the district court concluded that the plaintiff, First National Bank of Hettinger (Bank), had priority among conflicting claims between the Clarks and the Bank in a security interest in the same collateral, and that the Clarks had relinquished any right they had in certain motor vehicles by granting the Bank a release of any security interest in those vehicles.

The Clarks entered into a contract for deed and a security agreement dated 30 March 1976 wherein they sold their business, known as Hettinger Lumber, to a North Dakota corporation known as Hettinger Lumber, Inc. (Hettinger Lumber). A two-page notice of contract for deed was recorded with the register of deeds in Adams County on 24 May 1976. The contract for deed and security agreement granted Clarks a security interest in certain furniture, fixtures, and inventory described in an attached exhibit; however, no financing statement regarding the security interest was ever filed with the register of deeds in Adams County, or with the Secretary of State for North Dakota.

The Bank loaned money to Hettinger Lumber in July 1977 and received a security agreement covering all of its inventory. The Bank filed a financing statement covering its security agreement with Adams County register of deeds and with the Secretary of State for North Dakota in August 1977. In 1980 James and Beverly Mayer became owners of Hettinger Lumber. The Bank again loaned money to Hettinger Lumber in November 1980 and obtained another security agreement, dated 7 November 1980, covering furniture, fixtures, equipment, and inventory. This statement was also filed with the register of deeds of Adams County and with the Secretary of State for North Dakota. At the same time the Bank obtained a release from the Clarks for part of the collateral secured by the 1976 contract for deed and security agreement. The items released coincided with the items secured by the 1976 agreement; however, the security interest in those items had never been perfected by filing. Hettinger Lumber declared bankruptcy and defaulted in its payments to the Bank. The trustee in bankruptcy abandoned the inventory, furniture, equipment, and fixtures of Hettinger Lumber, and the Clarks took possession under their contract for deed.

The Bank commenced an action against the Clarks alleging that the inventory, fixtures, furniture, and equipment of Hettinger Lumber was the Bank's property by virtue of its secured position in those items and praying for immediate possession of that property. The Bank moved for summary judgment.

The district court concluded that the action presented only an issue of priorities under North Dakota Century Code Sec. 41-09-33, which was an issue of law to be decided by the court. The court then noted that the Bank was the first to file and perfect its security interest and had priority pursuant to NDCC Sec. 41-09-33. The district court also concluded that neither party perfected their security interest in the motor vehicles by filing, and that the Clarks, by the partial release, relinquished any interest they had in the motor vehicles. The district court granted the Bank's motion for summary judgment, and the Clarks appealed.

The principle issue raised by the Clarks is whether or not the district court erred in granting summary judgment in favor of the Bank. A closely related subissue raised by the Clarks is whether or not they satisfied the requirements of Rule 56(e), North Dakota Rules of Civil Procedure, ¹ by setting forth specific facts showing there was a genuine factual issue for trial.

Summary judgment is a procedural device available for promptly and expeditiously disposing of a controversy without a trial if there is no dispute as to either the material facts or the inferences to be drawn from the undisputed facts, or whenever only a question of law is involved. Herman v. Magnuson, 277 N.W.2d 445 (N.D.1979); Zuraff v. Empire Fire and Marine Insurance Co., 252 N.W.2d 302 (N.D.1977).

In considering a motion for summary judgment the Court may examine the pleadings, depositions, admissions, affidavits, and interrogatories, and inferences to be drawn therefrom, to determine whether or not summary judgment is appropriate. Albers v. Nodak Racing Club, Inc., 256 N.W.2d 355 (N.D.1977).

Summary judgment is inappropriate if either party is not entitled to judgment as a matter of law or if reasonable differences of opinion exist as to the inferences to be drawn from undisputed facts. Helbling v. Helbling, 267 N.W.2d 559 (N.D.1978); Farmers Elevator Co. v. David, 234 N.W.2d 26 (N.D.1975).

Even when factual disputes exist between the parties, summary judgment is appropriate if the law is such that the resolution of the factual dispute will not change the result. Sande v. City of Grand Forks, 269 N.W.2d 93 (N.D.1978). In those instances the disputed facts are not in essence material facts.

On appeal from a summary judgment, we view the evidence in the light most favorable to the party against whom the summary judgment was granted. Winkjer v. Herr, 277 N.W.2d 579 (N.D.1979).

A party resisting a motion for summary judgment has the responsibility of presenting competent admissible evidence by affidavit or other comparable means, NDRCivP 56(e); Spier v. Power Concrete, Inc., 304 N.W.2d 68 (N.D.1981); and, if appropriate, drawing the court's attention to evidence in the record by setting out the page and line in depositions or other...