Ag Acceptance Corp. v. Glinz

• Citation: 684 N.W.2d 632,2004 ND 154
• Decision Date: 26 July 2004
• Docket Number: No. 20030197.,20030197.
• Parties: AG ACCEPTANCE CORPORATION, as assignee of Ag Services of America, Inc., Plaintiff and Appellee v. Cecelia GLINZ, and the Estate of Bruce Glinz, by and through Cecelia Glinz, as duly appointed representative of the Estate, Defendants and Appellants.
• Court: United States State Supreme Court of North Dakota

684 N.W.2d 632

2004 ND 154

AG ACCEPTANCE CORPORATION, as assignee of Ag Services of America, Inc., Plaintiff and Appellee v. Cecelia GLINZ, and the Estate of Bruce Glinz, by and through Cecelia Glinz, as duly appointed representative of the Estate, Defendants and Appellants.

No. 20030197.

Supreme Court of North Dakota.

July 26, 2004.

Rehearing Denied September 3, 2004.

Jon R. Brakke, Vogel Law Firm, Fargo, N.D., for plaintiff and appellee.

Jonathan T. Garaas, Garaas Law Firm, Fargo, N.D., for defendants and appellants.

NEUMANN, Justice.

[¶ 1] Cecelia Glinz and the Estate of Bruce Glinz appealed from a summary judgment awarding Ag Acceptance Corporation ("Ag Acceptance") judgment in the amount of $238,874 on a promissory note. We affirm.

I

[¶ 2] Cecelia Glinz and her husband, Bruce Glinz, ran a farming operation. On August 15, 1997, the Glinzes signed a "Master Promissory Note" payable to Ag Services of America, Inc. ("Ag Services") to finance their 1998 crop. The note was in the amount of $750,000 with interest at 2.75 percent above the prime rate. All principal and interest was due on January 15, 1999. The note was secured by security agreements covering personal property, including farm products, equipment, government payments, and proceeds. In addition, because a portion of the proceeds were to be used to purchase agricultural supplies from Ag Services, the parties executed a document entitled "Customer Pricing Agreement, Program Fee Agreement, Release, and Disclaimer of Warranties" outlining the terms of any sales by Ag Services to the Glinzes.

[¶ 3] On October 20, 1997, Ag Services assigned its rights under the note to Ag Acceptance. On March 30, 1998, the Glinzes signed a supplement to the note increasing the principal amount of the note to $1,300,000. This supplement to the note referred to the prior assignment of the note to Ag Acceptance.

[¶ 4] On September 22, 1998, the Glinzes signed a Master Promissory Note in the amount of $1,300,000 payable to Ag Services to finance their 1999 crop. The interest rate was 2.75 percent above the prime rate and all principal and interest was due on January 15, 2000. The Glinzes again executed security agreements on personal property and a customer pricing agreement. On February 22, 1999, Ag Services assigned its rights under the note to Ag Acceptance.

[¶ 5] Bruce Glinz died in September 1999. Cecelia Glinz was named personal representative of his estate.

[¶ 6] In February 2000, Ag Acceptance brought this action against Cecelia Glinz and the Estate of Bruce Glinz alleging the notes were in default and the Glinzes owed $859,318.31, with interest accruing at the rate of $246.75 per day. Ag Acceptance sought immediate delivery of all collateral and a deficiency judgment. Cecelia and the Estate answered, alleging that the notes were not loans of money but constituted revolving charge agreements under N.D.C.C. ch. 51-14 and that only the amounts owed at the time the notes were assigned to Ag Acceptance were due and owing. Cecelia Glinz claimed any funds advanced after the notes were assigned constituted unsecured loans on an open account to Bruce Glinz personally, and were not covered by the notes or security agreements.

[¶ 7] Ag Acceptance took possession of and sold the collateral. As a result, the 1997 note was paid in full, and Ag Acceptance sought a deficiency judgment in the amount of $232,579.93, plus $38.73 interest per diem, on the 1998 note. Both sides moved for summary judgment, and the trial court denied Glinzes' motion for summary judgment and granted Ag Acceptance's motion for summary judgment. Judgment in favor of Ag Acceptance in the amount of $238,874.08 was entered on May 1, 2003. Cecelia Glinz and the Estate of Bruce Glinz (collectively "Glinz") have appealed.

II

[¶ 8] This case comes to us in the posture of an appeal from a summary judgment. We outlined our standard of review of appeals from a summary judgment in Zuger v. State, 2004 ND 16, ¶¶ 7-8, 673 N.W.2d 615 (citations omitted):

Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. "Whether summary judgment was properly granted is `a question of law which we review de novo on the entire record.'" Iglehart v. Iglehart, 2003 ND 154, ¶ 9, 670 N.W.2d 343 (quoting Wahl v. Country Mut. Ins. Co., 2002 ND 42, ¶ 6, 640 N.W.2d 689). On appeal, this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. Summary judgment is appropriate against parties who fail to establish the existence of a factual dispute on an essential element of a claim on which they will bear the burden of proof at trial.

A party resisting a motion for summary judgment may not simply rely upon the pleadings or upon unsupported, conclusory allegations. "Factual assertions in a brief do not raise an issue of material fact satisfying Rule 56(e)." Kemp v. City of Grand Forks, 523 N.W.2d 406, 408 (N.D.1994). "Nor may a party merely reassert the allegations in his pleadings in order to defeat a summary judgment motion." Id.

The resisting party must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact and must, if appropriate, draw the court's attention to relevant evidence in the record by setting out the page and line in depositions or other comparable documents containing testimony or evidence raising an issue of material fact.

In summary judgment proceedings, neither the trial court nor the appellate court has any obligation, duty, or responsibility to search the record for evidence opposing the motion for summary judgment. The opposing party must also explain the connection between the factual assertions and the legal theories in the case, and cannot leave to the court the chore of divining what facts are relevant or why facts are relevant, let alone material, to the claim for relief.

Iglehart, at ¶ 10 (quoting Anderson v. Meyer Broad. Co., 2001 ND 125, ¶ 14, 630 N.W.2d 46 (citations omitted)). Mere speculation is not enough to defeat a motion for summary judgment, and a scintilla of evidence is not sufficient to support a claim. If no pertinent evidence on an essential element is presented to the trial court in resistance to a motion for summary judgment, it is presumed that no such evidence exists.

III

[¶ 9] Ag Acceptance argues, and the trial court concluded, that the written agreements between the parties constitute a traditional loan of money secured by personal property. Glinz argues the agreement is a revolving charge account under N.D.C.C. ch. 51-14 between the Glinzes and Ag Services, and that any sales made to the Glinzes after the notes were assigned by Ag Services to Ag Acceptance were made to Bruce Glinz personally on an open account. Glinz therefore argues any transactions occurring after February 19, 1999, were not made under the notes, are not covered by the security agreements, and therefore are owed by Bruce Glinz personally on an open account, with an interest rate of six percent. Glinz further argues that Ag Acceptance's failure to comply with statutory requirements for revolving charge agreements under N.D.C.C. ch. 51-14 precludes the collection of certain fees and interest charges.

A

[¶ 10] Initially, the parties dispute which state's law governs their agreements. The promissory notes contain choice of law clauses providing the agreements are deemed to have been made in Iowa and that Iowa law is to govern their interpretation. Ag Acceptance argues N.D.C.C. ch. 51-14 is therefore inapplicable, and the agreements must be construed under Iowa law. Glinz argues there are strong public policy reasons to apply North Dakota law in this case, and N.D.C.C. ch. 51-14 should control. For purposes of this case we will assume, without deciding, that North Dakota law applies.

B

[¶ 11] The trial court concluded the parties' agreement was for a loan, not a revolving charge agreement under N.D.C.C. ch. 51-14. Glinz contends the agreement in this case falls within the definition of "revolving charge agreement" under the statute. "Revolving charge agreement" and other related relevant terms are defined in N.D.C.C. § 51-14-01:

1. "Credit service charge" means the amount, however expressed, which the retail buyer contracts to pay or pays the retail seller in excess of the amount of credit extended, representing the total charges by the retail seller incident to investigating and extending credit under a revolving charge agreement and for extending to the retail buyer the privilege of paying over a period of time therefor.

2. "Retail buyer" or "buyer" means a person who buys personal property from a retail seller, or to whom a retail seller otherwise extends credit, pursuant to a revolving charge agreement.

3. "Retail seller" or "seller" means a person who agrees to sell or sells goods or services pursuant to a revolving charge agreement and a state-chartered or national bank that extends credit by the advancement of moneys or the payment for goods or services under a revolving charge agreement.

4. "Revolving charge agreement" means a written instrument, defining the terms of credit extended from time to time pursuant thereto, pursuant to which the buyer's total unpaid balance thereunder, whenever incurred, is payable over a period of time and under the terms of which a credit service charge, other than the portion thereof consisting of late payment or other charges, is to be computed in relation to the buyer's unpaid balance from time to time.

A "loan of money" is defined in N.D.C.C. § 47-14-01:

A loan of money is a contract by which one delivers a sum of money to another and the latter agrees to return

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