Caneva v. Miners and Merchants Bank, No. 13996

• Court: Supreme Court of South Dakota
• Writing for the Court: FOSHEIM
• Citation: 335 N.W.2d 339
• Parties: Francis CANEVA, d/b/a Brunswick Building Corporation, A Partnership, Plaintiff and Appellant, v. MINERS AND MERCHANTS BANK, A Banking Corporation, David R. Workman, Donna L. Workman, David J. Workman and Daniel W. Workman, Defendants and Appellees.
• Decision Date: 22 June 1983
• Docket Number: No. 13996

Page 339

335 N.W.2d 339 Francis CANEVA, d/b/a Brunswick Building Corporation, A
Partnership, Plaintiff and Appellant,
v.
MINERS AND MERCHANTS BANK, A Banking Corporation, David R.
Workman, Donna L. Workman, David J. Workman and
Daniel W. Workman, Defendants and Appellees. No. 13996. Supreme Court of South Dakota. Argued April 18, 1983.
Decided June 22, 1983.

Page 340

Reed C. Richards of Richards & Richards, Deadwood, for plaintiff and appellant.

Wynn A. Gunderson of Gunderson & Palmer, Rapid City, for defendants and appellees Workmans.

Raymond J. Voelker, Jr. of Voelker & Adam, P.C., Deadwood, for defendant and appellee Bank.

FOSHEIM, Chief Justice.

This is an appeal from a summary judgment in favor of the appellees. We affirm in part, reverse in part and remand.

Francis Caneva (appellant) is a partner in the Brunswick Building Corporation which owned certain property in Deadwood, South Dakota. In 1977, appellant leased this property to Appellees David and Donna Workman (Workmans) and their two sons. The lease was for a term of five years with a rental of $400 per month. The retail business Workmans established on the leased premises was sold by them to Gene Melton. As part of this sale, an agreement to pay rent was signed by appellant, Workmans and Appellee Miners and Merchants Bank (Bank).

Payments under the lease ceased and appellant commenced this action alleging the lease between appellant and Workmans, its assignment to the Bank, and the agreement to pay rent. Appellant alleged that under the agreement to pay rent if Mr. Melton defaulted, then the Bank agreed to pay rent and if the Bank defaulted, then Workmans were responsible therefore. Appellant claimed the Bank breached all three agreements; that appellant found another tenant, but for $100 per month less than the lease provided; and that when appellant demanded damages, all appellees denied his claims and refused payment. Appellant sought to recover damages in lost rent, expense for clean-up, and sign removal.

The Bank denied appellant's allegations and claimed appellant received the required notice ¹ from the Bank that it was not going to pay rent; that appellant did not use

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commercially reasonable efforts to mitigate damages, if any; and that appellant and the Bank entered into an accord and satisfaction when appellant accepted a month's rent from the Bank accompanied by a "Notice of Reservation from Liability." The Bank also cross-claimed against Workmans, alleging Workmans' ultimate liability under the three agreements and praying that the court order Workmans to indemnify the Bank to the extent of any judgment awarded against it.

The answer of David & Donna Workman ² admitted the lease with appellant, its assignment to the Bank, and the agreement to pay rent as interpreted by plaintiff. Workmans claimed insufficient information to admit or deny any breach of these agreements by the Bank and appellant's damages. Workmans denied appellant had made demand on them for damages and that payment was refused. Workmans joined the Bank's defenses of mitigation of damages and accord and satisfaction. As further defenses, Workmans alleged that they did not have an opportunity to cure the rent default because they were not notified of the default as required in Paragraph 18 of the lease, ³ nor...