Caneva v. Miners and Merchants Bank, 13996

• Citation: 335 N.W.2d 339
• Decision Date: 22 June 1983
• Docket Number: No. 13996,13996
• 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.
• Court: South Dakota Supreme Court

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.

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 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 did they receive notice of demand for rent as is implicitly required in the agreement to pay rent. ⁴ Workmans also defended on the ground that the agreement to pay rent was unenforceable against them because of a want or failure of consideration. Workmans answered the Bank's cross-claim, denying ultimate liability under the agreements sued on by plaintiff and alleging the Bank's primary liability under the agreement to pay rent.

All parties moved for summary judgment. Appellant's affidavit disputed the Bank's defense that it notified appellant it was not going to pay more rent and further disputed appellees' defenses of accord and satisfaction and unreasonable mitigation of damages. Appellant's affidavit lacks any facts that he, or any one else, notified Workmans that rental payments were in default.

The Bank's supporting affidavit was given by the Bank's president. He stated that pursuant to the agreement to pay rent, the Bank was obligated to pay rent "unless written notice be given to the Lessor denying the payment of rent." He did not say this notice was given, but that he instructed the Bank's law firm to do it. The president did not state that he or anyone else gave Workmans notice that the rent payments were in default and that they were obligated to pay.

Workmans's affidavit in support of their motion reiterated that they did not receive the notice required by Paragraph 18 of the lease (see f.n. 3, supra ) and that they never received copies of the Bank's letters to plaintiff purportedly refusing to pay rent.

Summary judgment proceedings are not a substitute for trial when the claims asserted are not a sham or frivolous. The remedy is authorized only when the movant is entitled to judgment as a matter of law because there are no issues of material fact. Bourk v. Iseman, 316 N.W.2d 343 (S.D.1982); Hurney v. Locke, 308 N.W.2d 764 (S.D.1981); Wilson v. Great Northern Railway Co., 83 S.D. 207, 157 N.W.2d 19 (1968); SDCL 15-6-56....