Dangerfield v. Markel
| Decision Date | 24 March 1977 |
| Docket Number | No. 9277,9277 |
| Parties | 21 UCC Rep.Serv. 1239 David E. DANGERFIELD, d/b/a Dangerfield Potato Company, Plaintiff and Appellant, v. Dean MARKEL, Defendant and Appellee. Civ. |
| Court | North Dakota Supreme Court |
Syllabus by the Court
1. If the making of a contract is admitted in court, no additional writing is necessary for protection against fraud.
2. When a contractual term is disputed by the parties, it raises a fact issue which should be decided in a manner consistent with the other terms of the contract admitted by the parties.
3. A party who delays, without explanation, in enforcing his contractual rights, or accepts performance in a manner different from that required by the contract, acquiesces in past nonconforming performance by the other party.
4. Findings are clearly erroneous when they are without substantial evidentiary support or are induced by an erroneous view of the law.
Shaft, McConn & Fisher, Grand Forks, for plaintiff and appellant; argued by Patrick W. Fisher, Grand Forks.
DePuy & O'Connor, Grafton, for defendant and appellee; argued by W. R. Goulet, Jr., Grafton.
Dangerfield, a potato broker, appeals from a judgment of the district court of Walsh County which dismissed his amended complaint and awarded Markel, a potato grower, damages on a counterclaim for payments withheld, plus damages for breach of contract. We reverse and remand.
The complaint alleged that Markel had breached a contract to sell Dangerfield 25,000 cwt. of potatoes during the 1972-1973 shipping season. It also alleged that Markel refused to deliver 15,078 cwt. of potatoes during the contract period, forcing Dangerfield to purchase potatoes on the open market to fulfill a contract with potato processors. As a result of this alleged breach, Dangerfield claims to have suffered severe financial hardship, shortage of capital, damaged business reputation, loss of business and lessened business growth. He prayed for general damages of $56,310, and consequential damages of $101,745, less a setoff of $3,840.68 withheld by Dangerfield from payments due Markel for potatoes delivered.
Markel counterclaimed for the above mentioned $3,840.68 withheld by Dangerfield and, in addition, for damages allegedly suffered as a result of Dangerfield's breach of contract. In awarding Markel the $3,840.68 withheld by Dangerfield, the lower court dismissed the remainder of Markel's counterclaim. That dismissal is not at issue on this appeal. Procedural matters and the application of the Statute of Frauds in this case were considered on a previous appeal to this Court, Dangerfield v. Markel, 222 N.W.2d 373 (N.D.1974).
The dispute concerns a contract entered into by the parties on June 13, 1972. The parties initially experienced difficulties in the fall of 1972, Dangerfield making frequent requests upon Markel for delivery of potatoes, and Markel complaining of Dangerfield's failure to pay promptly for potatoes delivered.
On December 1, 1972, Markel, through his attorney, notified Dangerfield by letter that he considered the contract breached because of Dangerfield's continued failure to make prompt payment. The parties met on December 5, and apparently agreed to fulfill their obligations under the contract. Both parties testified at trial that they agreed at this meeting to continue performing the contract, but they disagree about the substance of an oral modification of the payment provisions of the contract. Markel contends that Dangerfield agreed to pay for each shipment of potatoes within fifteen days of delivery. Dangerfield denies this, and contends that he agreed only to promptly pay for potato shipments. In a letter to Markel's attorney dated December 6, 1972, Dangerfield stated:
There were no findings of fact nor conclusions of law prepared, which is permissible under Rule 52(a), NDRCivP; however, the trial court found in its memorandum opinion that at the December 5 meeting the parties orally agreed that thereafter payment was to be made by Dangerfield within fifteen days of delivery. The evidence indicates that, even after the December 5 meeting, Dangerfield did not pay for shipments within fifteen days on at least one occasion. In spite of this late payment, Markel continued to make deliveries under the contract. On the date that Markel finally gave notice of his suspension of deliveries (February 10, 1973), Dangerfield had become current with his payments and, although he had not paid for all potatoes delivered, the fifteen-day period had not expired since those deliveries. On February 13, 1973, Dangerfield informed Markel by letter that he considered the contract breached by Markel and indicated that he (Dangerfield) would pursue available remedies under the Uniform Commercial Code.
In his brief Dangerfield argues that the trial court committed several errors in law, made several clearly erroneous findings of fact, and failed to find certain facts which were established by the evidence. Dangerfield challenges several findings of the trial court which relate only to the first alleged contract breach by Dangerfield on December 1, 1972, including determinations by the court that: (1) time was of the essence in the original contract of June 13, 1972; (2) oral evidence established a thirty-day payment provision in that contract; and (3) evidence indicated that Dangerfield was insolvent on or before December 1, 1972.
The trial court, however, in the remainder of its memorandum opinion and in the memorandum opinion filed with its order denying the plaintiff's motion for a new trial, indicated that the decision is based upon a finding that Dangerfield breached the contract as orally modified on December 5, 1972 (which established a fifteen-day payment provision), and not upon the conduct of the parties which related only to the terms of the original contract (providing for thirty-day payments).
The letter acknowledging the December 5 meeting sent by Dangerfield to Markel on December 6 clearly indicated a mutual agreement to continue performance of the contract. Performance by both parties subsequent to December 5 constitutes a waiver of any right to cancel the contract for any prior nonperformance. 17A C.J.S. Contracts §§ 443, 491, 492(1); § 41-02-75(3) (2-612), NDCC. Even if the oral modification fails to satisfy the Statute of Frauds (§ 41-02-08 (2-201), NDCC) because of the provisions of § 41-02-16(3) (2-209), NDCC, it can operate as a waiver (§ 41-02-16(4) (2-209), NDCC).
We will consider only those issues raised by Dangerfield relating to the facts and circumstances surrounding the December 5 meeting between the parties, and the conduct of the parties subsequent to that date.
In substance, Dangerfield contends on appeal that: (1) the trial court erred in receiving parol evidence to establish that at the December 5, 1972, meeting Dangerfield agreed to pay for future shipments of potatoes within fifteen days of delivery; and (2) the court erred in failing to find that Markel had waived his right to strict compliance with the fifteen-day payment provision by continuing to make deliveries after that provision had been breached.
In its memorandum opinion the trial court stated:
While not explicitly stated, the trial court appears to have found an enforceable oral modification of the contract based upon §§ 41-02-15 (2-208) and 41-02-16 (2-209), NDCC, which provide:
"41-02-15. (2-208) Course of performance or practical construction. 1. Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.
2. The express terms of the agreement and any such course of performance, as well as any course of dealing and usage of trade, shall be construed whenever reasonable as consistent with each other; but when such construction is unreasonable, express terms shall control course of performance and course of performance shall control both course of dealing and usage of trade (section 41-01-15).
2. A signed agreement which excludes modification or rescission except by a signed writing cannot be...
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