Nelson v. Production Credit Ass'n of the Midlands
Decision Date | 25 August 1989 |
Docket Number | No. CV88-L-238.,CV88-L-238. |
Citation | 729 F. Supp. 677 |
Parties | Joe NELSON, et al., Plaintiffs, v. PRODUCTION CREDIT ASSOCIATION OF THE MIDLANDS, Defendant. |
Court | U.S. District Court — District of Nebraska |
COPYRIGHT MATERIAL OMITTED
David H. Hahn, Lincoln, Neb., for plaintiffs.
Howard P. Olsen, Jr. and Steven W. Olsen of Simmons, Olsen, Ediger, Selzer & Ballew, P.C., Scottsbluff, Neb., for defendant.
MEMORANDUM AND ORDER ON POST-TRIAL MOTIONS
A Rule 50(b) motion for judgment notwithstanding the verdict may be granted upon the same grounds and standard as a motion for a directed verdict. That standard is stated in Savage v. Christian Hosp. N.W., 543 F.2d 44, 46 (8th Cir.1976) as follows:
The theory of breach of contract was submitted to the jury, the definition of the contract being:
"PCA agreed to provide operating capital for the expansion of the Nelsons' ranch operation to full productivity over a three-year period and to restructure the Nelsons' debt situation to permit proper funding of the Nelsons' ranching operation ..."
The defendant asserts that, even if evidence were to support that definition of a contract, the terms were so indefinite as to constitute no contract at all. In Davco Realty Co. v. Picnic Foods, Inc., 198 Neb. 193, 198, 252 N.W.2d 142, 146 (1977), the court said:
Id. at 196, 252 N.W.2d at 145-46.
The district court in Davco found the agreement indefinite and uncertain in regard to the nature of the paving material to be used, the depth and thickness of the paving, the foundation work and site preparation work required, and the time within which Picnic was required to perform. The Supreme Court of Nebraska held that the provisions of the contract were sufficiently specific to permit enforcement, because under Nebraska law in a building and construction contract it is implied that the building will be erected in a reasonably good and workmanlike manner and will be reasonably fit for the intended purpose. That, coupled with the implied time of performance to be within a reasonable time under the circumstances, "cures any ambiguity otherwise inherent in the agreement." Id. at 198, 252 N.W.2d at 147.
Where the lending of money is involved, however, specificity is more important, because of the lack of implied terms that may be imposed. In Union State Bank v. Woell, 434 N.W.2d 712, 717 (N.D. 1989) the claim was as follows:
"Woell asserts that he and the Bank entered into an oral agreement that required the Bank `to continue loaning money to Woell up to the extent of the Bank's lending limit and then to put Woell into contact with other lending sources beyond this Bank's lending limit.'"
The court held that there was no enforceable agreement as a matter of law. The court said:
Id. at 717. (Citations omitted)
Similarly, in Labor Discount Center v. State Bank & Trust Company, 526 S.W.2d 407, 425 (Mo.Ct.App.1975) the court held that a claimed oral agreement to continue interim financing was not sufficiently definite as to be enforceable where the due date, security, rate of interest and the time for repayment were not specified.
In Neujahr v. Producers Comm. Ass., 838 F.2d 1003 (8th Cir.1988), a claimed contract was held to be insufficiently definite to take it out of the realm of the statute of frauds when the writing did not state the salary at which the plaintiff was to be employed, or the various kinds of insurance the plaintiff claims he was promised. The court said that provisions of this kind "are essential elements of the alleged oral contract." Id. at 1004.
In the case at bar the evidence that must be relied upon as proving a contract is essentially the testimony of Joseph Nelson. Beginning in about 1975 Joseph and Margaret Nelson for several years borrowed on a yearly basis from the Production Credit Association of the Midlands (PCA) for their short-term borrowing on a ranch operation. Loan papers designated yearly loans as due in one year and indicated the specific security involved. When the Nelsons needed more money, they would make application to PCA for "additionals." By August 1983, the operation had shown a loss for three consecutive years and the balance to become due at the end of 1983 was approximately $750,000. PCA expressed concern about the loan's liquid margin and the "historical loss trend." Exhibit 657.
Joseph Nelson's testimony continued:
The Nelsons then developed a "ranch plan" (Exhibit 65) with the help of Dr. Pat Reece and Jim Robb that contemplated completely stocking the ranch with feeder cattle to utilize the resources. Joseph Nelson testified that the Nelsons discussed the ranch plan with Wayne Goff, the president of the PCA, on November 3, 1983, at which Mr. Nelson told Mr. Goff of the plan and said, "we must fill up the pastures with calves, and we've got to fill the ranch completely" to which Goff replied, "we certainly need to do something and that sounds like it's probably a pretty good idea." Then in response to the question, "Did he tell you then that he would loan you money to fund the ranch plan?" Nelson testified:
Nelson testified that Goff suggested that the Nelsons go to the Federal Land Bank for pay down money. Nelson testified that they went to the Federal Land Bank and applied for a loan of little over $500,000.00, but the loan was denied. They then went to Travelers Insurance Company and received a commitment to loan the Nelsons $350,000.00. They then relayed that fact to Goff and asked whether that would
Joseph Nelson testified that in February 1984, he talked with Tom Willnerd, telling Willnerd about the "ranch plan" and said that "we had to fill up the ranch with cattle, stock it completely." Nelson told Willnerd that Nelson and Skip Marland of Travelers Insurance Company had met with Dr. Pat Reece about the ranch plan. At that time the Nelsons had two delinquent notes with the Federal Land Bank — one on the ranch and one on the farm. Nelson asked Willnerd for money to pay those loans, "but until there was a definite commitment by Travelers we were — there was no funds available." Willnerd said the ranch plan "was a good idea because there had to be a definite plan here in the works in order for them to do this." Willnerd said, "we had to have Travelers' money in there to be able to do this, have a definite commitment from Travelers before there would be any funds."
"This," as referred to in the foregoing conversation with Willnerd, was not identified in the testimony of Nelson any more specifically and the only reference it reasonably can be said to...
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