Morrell Employees Federal Credit Union v. Mehlhaff

• Decision Date: 06 November 1985
• Docket Number: No. 14880,14880
• Citation: 376 N.W.2d 59
• Parties: MORRELL EMPLOYEES FEDERAL CREDIT UNION, Plaintiff and Appellee, v. Jon William MEHLHAFF, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 59

376 N.W.2d 59

MORRELL EMPLOYEES FEDERAL CREDIT UNION, Plaintiff and Appellee, v. Jon William MEHLHAFF, Defendant and Appellant.

No. 14880.

Supreme Court of South Dakota.

Argued Sept. 11, 1985.

Decided Nov. 6, 1985.

James R. Myers of Simons, Gibbs, Feyder & Myers, Sioux Falls, for plaintiff and appellee.

John L. Wilds, Sioux Falls, for defendant and appellant; Todd C. Miller, Sioux Falls, on brief.

HENDERSON, Justice.

ACTION

This is an appeal from an order granting Morrell Employees Federal Credit Union (Morrell), plaintiff-appellee herein, summary judgment against Jon Mehlhaff (Mehlhaff), defendant-appellant herein, in a breach of contract action. Both parties moved the trial court for summary judgment. We reverse with instructions to enter summary judgment for Mehlhaff.

FACTS

On October 25, 1980, Mehlhaff purchased real estate located in Minnehaha County by contract for deed from Mr. and Mrs. David Barton. On April 14, 1983, the Bartons assigned their interest in the contract for deed to Morrell. In the Summer of 1983, Mehlhaff defaulted in his payments to Morrell and in August of that year, Mehlhaff moved off the property.

By a letter dated November 14, 1983, counsel for Morrell requested Mehlhaff to execute a quitclaim deed to the subject property so as to avoid foreclosing on the contract for deed. This letter further stated: "The Credit Union will then be in a position to sell the home and you will be liable for any deficiency which remains if the sale does not bring the full amount due on your contract, together with the expenses of maintenance and sale." Mehlhaff, however, never received such a letter in the mail or at least maintains that he did not.

On December 1, 1983, Mehlhaff met with Morrell's counsel at the latter's office. This conference is the pivotal factual scenario. At this time, Mehlhaff read the above letter. Mehlhaff, however, adamantly stated that he was not going to spend another dime on the property. Mehlhaff did not agree to be liable for any deficiency if he signed the quitclaim deed and counsel for Morrell did not insert a clause to the contrary, or language similar to that found in the above-quoted letter, in the quitclaim deed. Counsel for Morrell insisted that Mehlhaff sign the deed and eventually Mehlhaff signed a quitclaim deed conveying the property to Morrell. This quitclaim deed provided in relevant part: "Transfer to extinguish interest acquired by reason of [Barton-Mehlhaff] Contract for Deed...."

Morrell listed the property for sale and on June 13, 1984, Morrell sold the property at auction for a high bid of $11,100.00. On July 12, 1984, Morrell commenced this action to recover the balance remaining due on Mehlhaff's obligation under the contract for deed. As relevant herein, both parties thereafter moved for summary judgment and based on the depositions, affidavits, records, and pleadings, the trial court granted Morrell summary judgment. The trial court's rationale for awarding summary judgment was: (1) The quitclaim deed was a way of avoiding foreclosure and was not meant to rescind the contract for deed; (2) there was not a mutual agreement that the quitclaim deed was to extinguish Mehlhaff's obligations; and (3) the record supports the conclusion that Mehlhaff delivered the quitclaim deed knowing he would remain liable for any deficiency existing after the sale of the real estate. From the order granting summary judgment, Mehlhaff now appeals.

On appeal, Mehlhaff raises three separate issues, but to the extent we deem the resolution of the issue addressed to be determinative of the outcome of this case, we will not confront the other two issues presented.

ISSUE

WAS THE ORDER AWARDING SUMMARY JUDGMENT PROPERLY GRANTED? WE HOLD THAT IT WAS NOT.

DECISION

Summary judgment is properly awarded if there is no germane issue of material fact and the moving party is entitled to judgment as a matter of law. SDCL 15-6-56(c). Inasmuch as both Morrell and Mehlhaff moved for summary judgment below, they concede that there is no question of fact.

In Preheim v. Ortman, 331 N.W.2d 62 (S.D.1983), this Court...