Mash v. Cutler, Nos. 17604

• Court: Supreme Court of South Dakota
• Writing for the Court: WUEST; MILLER
• Citation: 488 N.W.2d 642
• Decision Date: 24 June 1992
• Docket Number: 17609,Nos. 17604
• Parties: Nathan MASH, Plaintiff and Appellee, v. Dale CUTLER and Dan Cutler, Defendants and Appellants.

Page 642

488 N.W.2d 642 Nathan MASH, Plaintiff and Appellee,
v.
Dale CUTLER and Dan Cutler, Defendants and Appellants. Nos. 17604, 17609. Supreme Court of South Dakota. Argued March 16, 1992.
Decided June 24, 1992.

Kennith L. Gosch of Bantz, Gosch, Cremer, Peterson & Oliver, Aberdeen, for plaintiff and appellee.

Thomas M. Tobin of Tonner, Tobin & King, Aberdeen, for defendants and appellants.

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WUEST, Justice.

Dale and Dan Cutler (Dale and Dan respectively) appeal from the trial court's judgment awarding Nathan Mash (Mash) $49,429.39 plus prejudgment interest and costs for breach of contract. Mash also appeals the trial court's award of damages. We affirm.

Dale and Dan are father and son who make their living in the cattle business. They occasionally purchase and raise cattle for others. Dale runs a feedlot. Dan runs a ranch for the pasturing of cattle. Mash is a successful businessman who, in the middle 1980's, became interested in raising cattle.

Mash entered into an oral agreement with the Cutlers whereby Dale would acquire cattle for Mash, feed them on Dale's feedlot and sell them for slaughter at the appropriate time. In the latter part of 1986, Dale purchased 197 head of cattle--151 heifers and 46 steers (Herd I). Mash wanted the cattle purchased below market price. In the spring of 1987, Mash told Dale he wanted to breed the heifers. Because some of the heifers were not suitable for breeding purposes (they had become too fat or had been given male hormone implants to increase weight gain), the Cutlers sold the unsuitable heifers and replaced them with their own purebred breeding stock. The parties disagree as to whether this was with or without Mash's knowledge or permission. The forty-six steers were sold, and the proceeds were delivered to Mash. The heifers were put out to pasture.

In October 1987, Dale purchased on behalf of Mash Herd II, which he represented to be 187 head of Simmental crossbred heifer calves suitable for breeding. Again, Mash instructed that the cattle be bought two to three cents below market price. By agreement, Herd II was to remain in Dale's feedlot from October 27, 1987 to April 30, 1988. Mash prepaid feeding costs for Herd II in November 1987. Records show that Dan did not pay out for expenses the entire amount he billed Mash for Herd II. Dan testified numerous cattle came from his own herd, and thus, there really was no discrepancy. In addition, Mash claims Dale promised him the cattle would gain one and a half pounds per day with a "zero death loss." Dale denied any such guarantee. ¹

In 1988, Mash purchased his own ranch (the St. Charles) and requested the Cutlers to ship Herd II there. The cattle were shipped in three installments consisting of sixty-five, sixty-two and sixty cattle. (See chart in footnote 6). The final shipment was two months late due to an unrelated disagreement between Mash and Dale over a finder's fee Dale felt Mash owed him for helping Mash locate the St. Charles Ranch. The ranch manager (Dean) inspected Herd II and felt only forty-eight of the 198 head were satisfactory as breeding cattle. The rest were sold for slaughter.

Based on his dissatisfaction with Herd II, Mash demanded that Herd I also be shipped to the St. Charles. Initially, the Cutlers refused because Dan felt he had the right to possession of Herd I until weaning time had arrived. Dean inspected Herd I and felt the cattle were not being properly cared for and noted they had no tattoos which would indicate they had been Bangs vaccinated to prevent the occurrence of brucellosis. ² South Dakota law prohibits the resale of non-Bangs-vaccinated cattle as breeding stock through sale barns in South Dakota.

Mash initially filed a cause of action seeking immediate possession of Herd I. Thereafter, a stipulation was entered into between the Cutlers and Mash, whereby the Cutlers promised to deliver 151 head of bred cattle. The stipulation specified the type and age of the cattle, how many calves Mash was guaranteed and how the remaining calves were to be divided. This

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stipulation is discussed in greater detail in part II.E.

Shortly after the stipulation was entered into, the Cutlers informed Dean eighteen head of the Herd I cattle had died. Dean testified when Herd I arrived at the St. Charles, one cow had a broken leg, two died shortly after arrival, and one had a lump on her jaw. Over half were older than the ages specified in the stipulation. Only ten of the calves met the standards of the St. Charles Ranch for breeding stock. The rest of Herd I was sold for slaughter.

After the cattle were delivered, Mash sued the Cutlers for damages resulting from the Cutlers' handling of Herds I & II. The causes of action were for breach of contract, breach of fiduciary duty, conversion, and fraud. In addition, Mash sought punitive damages. The matter was tried to the court. The trial court awarded damages for breach of contract; found there was no fiduciary relationship between the Cutlers and Mash; found the Cutlers converted to their own use at least seven head of Mash's cattle; but found the Cutlers' actions did not constitute oppression, fraud or malice, and their actions were not done willfully or wantonly and therefore, declined to award Mash punitive damages.

Both parties appeal. The Cutlers raise the following issues:

1. Whether the trial court erred in awarding damages caused by the Cutlers' failure to have all cattle Bangs vaccinated.

2. Whether Mash properly mitigated his damages by selling non-Bangs-vaccinated cattle for slaughter in South Dakota rather than shipping them to another state.

3. Whether the trial court's finding as to damages pertaining to the 1989 calf crop, which was not realized because Cutlers shipped only 133 bred heifers rather than 151 as stipulated, was clearly erroneous.

4. Whether the trial court erred in interpreting the stipulation entered into between the parties (the stipulation essentially served as the written contract on the Herd I cattle).

Mash raises the following issues:

1. Whether the trial court erred in calculating the difference in value between the cattle in Herd I as delivered and what should have been delivered pursuant to the stipulation.

2. Whether the trial court erred in failing to award to Mash damages based upon expenses incurred in providing testing and veterinary services to the Herd I cattle after their delivery.

3. Whether the trial court erred in finding that only seven head of Herd I cattle were converted by the Cutlers.

4. Whether the trial court erred in refusing to award punitive damages based on the Cutlers' conversion of Mash's cattle.

5. Whether the trial court erred in failing to award damages for Mash's loss of the 1989 calf crop which was not realized because the cattle actually shipped were unsuitable for breeding purposes.

6. Whether the trial court erred in finding no fiduciary relationship existed between the Cutlers and Mash.

7. Whether the trial court's finding that there was no fraud was clearly erroneous.

I. STANDARD OF REVIEW.

A trial court's findings of fact are presumed correct unless they are shown to be clearly erroneous. Chamberlain Livestock Auction v. Penner, 462 N.W.2d 479, 482 (S.D.1990); Sperry Corp. v. Schaeffer, 394 N.W.2d 727, 730 (S.D.1986) (citing SDCL 15-6-52(a)).

'This court may not substitute its judgment of factual questions for that of the trial court unless the findings of fact are clearly erroneous. Northern Farm Supply, Inc. v. Sprecher, 307 N.W.2d 870 (S.D.1981). In applying the "clearly erroneous" standard, we do not ask whether we would have made the same findings as did the trial court. Rather, the test is whether, after reviewing all the

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evidence, we are left with a definite and firm conviction that a mistake has been made. Temple v. Temple, 365 N.W.2d 561 (S.D.1985); Cunningham v. Yankton Clinic, P.A., 262 N.W.2d 508 (S.D.1978); In re Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455 (1970). The findings of fact made by the trial court are presumptively correct. The burden to show error is on the appellant. Temple, supra; Hilde v. Flood, 81 S.D. 25, 130 N.W.2d 100 (1964).'

Penner, 462 N.W.2d at 482 (quoting Rosebud Sioux Tribe v. Strain, 432 N.W.2d 259, 265 (S.D.1988)). Further, "[t]his court is not free to disturb the lower court's findings unless it is satisfied that they are contrary to a clear preponderance of the evidence." Cunningham, 262 N.W.2d at 512 (citing Potter v. Anderson, 85 S.D. 142, 178 N.W.2d 743 (1970)). The credibility of witnesses, the weight to be accorded their testimony, and the weight of the evidence must be determined by the trial court and we accord the trial court some deference based on its observations of the witnesses and the evidence. Gross v. Gross, 355 N.W.2d 4, 9 (S.D.1984) (citing Nicolaus v. Deming, 81 S.D. 626, 139 N.W.2d 875 (1966)). Accord Fullerton Lumber Co. v. Reindl, 331 N.W.2d 293, 296 (S.D.1983) (citing SDCL 15-6-52(a) (1984)); Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455.

Furthermore, in a court trial, '[u]pon review, the evidence and inferences therefrom must be viewed in a light most favorable to uphold the verdict [judgment] and, if there is competent and substantial evidence to support the verdict [judgment], it must be upheld.'

Gross v. Conn. Mut. Life Ins. Co., 361 N.W.2d 259, 273 (S.D.1985) (quoting Dougherty v. Beckman, 347 N.W.2d 587, 590 (S.D.1984). Accord Opp v. Nieuwsma, 458 N.W.2d 352, 358 (S.D.1990); Farmers State Bank of Winner v. Westrum, 341 N.W.2d 631, 634-35 (S.D.1983).

II. NOTICE OF APPEAL ISSUES.

A. Contract Damages Generally.

"In an action for breach of contract, the plaintiff is entitled to recover all his detriment proximately caused by the breach, not exceeding the amount he would have gained by full performance." ³ Regan v. Moyle Petro. Co., 344 N.W.2d 695, 696 (S.D.1984); Big Band, Inc. v. Williams, 87 S.D. 24, 202 N.W.2d 121, 123 (1972). In...