Midwest Federal Sav. Bank v. Dickinson Econo-Storage

Decision Date18 January 1990
Docket NumberECONO-STORAGE,No. 890136,890136
Citation450 N.W.2d 418
PartiesMIDWEST FEDERAL SAVINGS BANK, Plaintiff and Appellee, v. DICKINSON, a general partnership; Roger J. Pelton, Raymond Pelton and Duane U. Brekke, Defendants and Appellants. Civ.
CourtNorth Dakota Supreme Court

Freed, Dynes, Reichert & Buresh, P.C., Dickinson, for defendants and appellants; argued by Eugene F. Buresh.

Mackoff, Kellogg, Kirby & Kloster, P.C., Dickinson, for plaintiff and appellee; argued by James D. Geyer.

GIERKE, Justice.

Appellants, Dickinson Econo-Storage, a general partnership consisting of Roger J. Pelton, Raymond Pelton and Duane U. Brekke (Econo-Storage), appeal from a summary judgment granted to Midwest Federal Savings Bank (Midwest Federal). We reverse and remand.

Econo-Storage was the fee owner of Lots 3 and 4, Block 2A, Kilweins 2nd Subdivision, Stark County, North Dakota. Econo-Storage granted to Midwest Federal a mortgage on the western part of the aforementioned properties hereinafter described as the west 80 feet of lot 3. After Econo-Storage defaulted on the note and mortgage, Midwest Federal entered into possession of the west 80 feet of lot 3. The west 80 feet of lot 3 was separate from the remaining portion of lot 3 and from lot 4 and Econo-Storage had separate mortgages with different mortgagees on the remaining property of lots 3 and 4. However, the properties were not partitioned for tax purposes with the Treasurer of Stark County, North Dakota, and there were no arrangements made for the apportionment of taxes between the interests held by Econo-Storage and Midwest Federal.

In August of 1986, Midwest Federal paid Stark County $30,703.55 for delinquent real estate taxes for lots 3 and 4 for the years of 1983 through 1986. Subsequently, Midwest Federal learned that of that amount, $25,191.08 should have been apportioned to the remaining portions of lots 3 and 4 owned by Econo-Storage. Consequently, Midwest Federal commenced an action against Econo-Storage for the $25,191.09 that Midwest Federal mistakenly paid.

Prior to the scheduled trial date of January 24, 1989, counsel for Midwest Federal, James Geyer, and counsel for Econo-Storage, Robert Lamont, reached an oral settlement of the dispute. Econo-Storage was to pay Midwest Federal $18,500 over a period of time and upon default, to confess judgment for $23,000. This agreement was reduced to writing by Geyer and was sent to Lamont for the parties' signatures. However, on February 7, 1989, Lamont informed the court that a trial date needed to be rescheduled as the partners of Econo-Storage refused to execute the proposed agreement that he had negotiated on their behalf. Subsequently, Lamont withdrew from the case.

Thereafter, Midwest Federal moved for summary judgment contending that Lamont had the authority, whether ostensible or actual, to bind the partners of Econo-Storage to the negotiated settlement. The district court granted Midwest Federal's motion for summary judgment holding that since there were no disputed facts as to the terms and conditions of the agreement reached between the parties' counsel, the relationship between Lamont and the partners was a valid principal/agent relationship in which Lamont had the authority to bind the partners to the agreement in which Midwest Federal acted in good faith. This appeal followed.

The sole issue to be decided on this appeal is whether Econo-Storage's attorney, Lamont, had sufficient authority to bind Econo-Storage to the settlement agreement he negotiated with Midwest Federal's attorney, Geyer.

Under Rule 56, N.D.R.Civ.P., a summary judgment should be granted if it appears that there are no genuine issues of material fact or any conflicting inferences which may be drawn from those facts. Rule 56(c), N.D.R.Civ.P.; Miller Enterprises v. Dog N' Cat, 447 N.W.2d 639, 642 (N.D.1989) (citations omitted). The party moving for a summary judgment has the burden of demonstrating that there is no genuine issue of material fact. Binstock v. Tschider, 374 N.W.2d 81, 83 (N.D.1985).

In the instant case, Midwest Federal argues that Lamont had sufficient authority to bind Econo-Storage to the settlement agreement. Specifically, Midwest Federal argues that Lamont stated to a colleague of Geyer that he felt that he had authority to enter into the agreement on behalf of the Econo-Storage partnership and its partners. Further, Midwest Federal contends that a letter that Lamont wrote to the partners of Econo-Storage indicates that he entered the settlement negotiations believing that he had the authority to bind Econo-Storage to the settlement. The letter stated in pertinent part: "I have enclosed a copy of the Confession of Judgment and Stipulation and Agreement by attorney James D. Geyer which accurately reflects the settlement agreement which I approved on your behalf."

Econo-Storage responds that there was an actual dispute concerning whether or not Lamont had authority to enter into the settlement agreement. To support this position, Raymond Pelton, a partner of Econo-Storage, filed an affidavit which stated that "at no time was our former attorney of record, Robert Lamont, authorized to enter into a settlement agreement on our [Econo-Storage and its partners'] behalf under the terms and conditions as outlined in the proposed agreement."

We believe it seems clear that a material issue exists with regard to whether or not Lamont had the authority from his clients to enter into the settlement agreement. Therefore, we must decide whether such an issue is a legal issue or a factual issue so as to determine if the district court erred in granting summary judgment under these circumstances. Our research indicates that this Court has not addressed the question of whether the existence of an attorney's authority to bind a client to a settlement agreement involves a question of fact or a question of law.

After a review of legal precedent from other jurisdictions, it appears to be well settled that "whether an attorney has been given express authority to settle a claim is normally a question of fact to be resolved by the trial court." Austin Farm Center v. Austin Grain Co., 418 N.W.2d 181, 184 (Minn.App.1988) [citing Rosenberg v. Townsend, Rosenberg & Young, Inc., 376 N.W.2d 434, 438 (Minn.Ct.App.1985) ]. See also Demetracopoulos v. Strafford Guidance Center, 130 N.H. 209, 536 A.2d 189, 192 (1987) (the existence of an attorney's authority is a question of fact); Skalbeck v. Agristor Leasing, 384 N.W.2d 209, 212 (Minn.App.1986) (whether an attorney has been given express authority to settle a claim is a question of fact); Pipkin v. Lucas, 451 So.2d 346, 347 (Ala.Civ.App.1984) (whether an attorney is authorized to bind his client is a question of fact to be determined by the factfinder); Johnson v. Tesky, 57 Or.App. 133, 643 P.2d 1344, 1347 (1982) (as...

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4 cases
  • Luethke v. Suhr
    • United States
    • Nebraska Supreme Court
    • August 9, 2002
    ...Burden, 917 S.W.2d 574 (Ky.1996); Hallock v. State, 64 N.Y.2d 224, 474 N.E.2d 1178, 485 N.Y.S.2d 510 (1984); Midwest Federal v. Dickinson Econo-Storage, 450 N.W.2d 418 (N.D.1990); NEET v. Silver Street Partnership, 148 Vt. 99, 528 A.2d 1117 (1987); Hays v. Fischer, 161 Ariz. 159, 777 P.2d 2......
  • Ryberg v. Landsiedel
    • United States
    • North Dakota Supreme Court
    • March 24, 2021
    ...and that an attorney may not waive a client's substantial rights without the client's consent. Midwest Fed. Savings Bank v. Dickinson Econo-Storage , 450 N.W.2d 418, 421 (N.D. 1990). Whether an attorney has been given express authority to settle a claim normally presents a question of fact.......
  • Resolution Trust Corp. v. Dickinson Econo-Storage, ECONO-STORAGE
    • United States
    • North Dakota Supreme Court
    • July 31, 1991
    ...had the authority to bind Econo-Storage to the agreement. We reversed that summary judgment on appeal. Midwest Federal Savings Bank v. Dickinson Econo-Storage, 450 N.W.2d 418 (N.D.1990). Midwest Federal was declared insolvent and RTC was substituted as plaintiff in this action. RTC moved fo......
  • First Western Bank of Minot v. Wickman, 920253
    • United States
    • North Dakota Supreme Court
    • May 28, 1993
    ...client to do so. 3 See Graves v. P.J. Taggares Co., 94 Wash.2d 298, 616 P.2d 1223 (1980). Cf., e.g., Midwest Federal Savings Bank v. Dickinson Econo-Storage, 450 N.W.2d 418, 421 (N.D.1990) ["without the consent of the client, an attorney may not waive his or her client's substantial rights"......

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