Froiland v. Tritle, No. 17659

• Court: Supreme Court of South Dakota
• Writing for the Court: AMUNDSON; MILLER
• Parties: Diane K. FROILAND, Executrix In re Estate of Richard T. Froiland, Deceased, Plaintiff and Appellee, v. James L. TRITLE, Defendant and Appellant. . Considered on Briefs
• Decision Date: 11 February 1991
• Docket Number: No. 17659

Page 310

484 N.W.2d 310 Diane K. FROILAND, Executrix In re Estate of Richard T.
Froiland, Deceased, Plaintiff and Appellee,
v.
James L. TRITLE, Defendant and Appellant. No. 17659. Supreme Court of South Dakota. Considered on Briefs Feb. 11, 1991.
Decided May 13, 1992.

Lewayne M. Erickson and Eric N. Rasmussen, Erickson, Helsper & O'Brien, Brookings, for plaintiff and appellee.

Frank E. Denholm and Steven J. Britzman, Denholm, Glover & Britzman, Brookings, for defendant and appellant.

AMUNDSON, Justice.

James Tritle appeals from a summary judgment entered in favor of Diane Froiland, the executrix of Richard Froiland's estate. We affirm.

FACTS

James Tritle (Tritle) is a dentist from Brookings, South Dakota, who practiced for roughly forty years. In anticipation of retirement, he sold his practice to a young dentist, Richard Froiland (Froiland), pursuant to a purchase agreement (hereinafter "Agreement") dated October 4, 1985. In the Agreement, Tritle agreed to transfer

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all of the accounts receivable, assets, fixtures and furnishings, leasehold improvements, patient records, and a covenant not to compete to Froiland for a total purchase price of $50,000. The Agreement called for Froiland to make a down payment of $12,000 and pay the remaining $38,000 balance, plus ten percent interest, pursuant to a ten-year amortized plan, which required payments of $500 per month.

The Agreement did not require that life insurance be purchased by either party to insure complete payment in the event of Froiland's untimely death. Tritle, seeking to assure the payments provided for in the Agreement in his retirement years, requested that Froiland purchase credit life or a mortgage insurance policy. Froiland refused to pay for such insurance; but, after meeting with an insurance agent Phil Hegg (Hegg), he allowed Tritle to purchase an ordinary life policy on his life, submitted to a required physical exam, and completed necessary paperwork for the policy.

The ordinary life insurance policy (hereinafter the "policy") was subsequently issued to Tritle as the beneficiary, on Froiland's life for $38,000, which was the original principal balance on the Agreement. The policy did not provide for a reduction in the policy benefits to coincide with the gradual payoff of the principal on the Agreement.

Froiland unexpectedly passed away October 15, 1990, at which time there was a balance owing on the Agreement of $24,302.21. Tritle made a claim on the insurance policy, which was paid to him in the amount of $37,753. Diane Froiland, executrix of Froiland's estate, made several additional monthly payments to Tritle before she learned of the insurance payment. Upon learning of this insurance policy, she demanded that the money Tritle received in excess of the balance due on the Agreement be returned to the estate. She further demanded that the insurance proceeds be used to satisfy the outstanding amount owed on the Agreement. Tritle refused to apply the proceeds to the amount owed or to return any excess to the estate.

The trial court granted summary judgment in favor of Froiland, awarding the estate the amount in excess of the balance owed, plus interest less the premiums Tritle paid, or approximately $14,994.42. Trial court further ordered that the proceeds from the policy were to be applied to the outstanding amount owed in the purchase agreement. Tritle appeals.

ISSUES

1. Whether the trial court erred in limiting Tritle's insurable interest to the amount of debt owed by Froiland at the time of his death?

2. Whether the trial court erred in granting summary judgment prior to close of discovery period?

Standard of Review

The standard of review for a grant or denial of summary judgment is as follows:

' "In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper." '

Waddell v. Dewey County Bank, 471 N.W.2d 591, 593 (S.D.1991) (quoting Garrett v....