Proceedings For Deposit In Court of Monies and/or Trust Assets of Equivalent Value of Approximately $45,877.68, Matter of, 15573
| Decision Date | 30 December 1987 |
| Docket Number | No. 15573,15573 |
| Citation | 417 N.W.2d 187,5 UCCRep.Serv.2d 1162 |
| Parties | 5 UCC Rep.Serv.2d 1162 /OR TRUST ASSETS OF the EQUIVALENT VALUE OF APPROXIMATELY $45,877.68. Supreme Court of South Dakota |
| Court | South Dakota Supreme Court |
James E. Carlon of Carlon Law Office, Pierre, for appellant Ralph kemnitz.
Robert Riter, Jr. of Riter, Mayer, Hofer and Riter, Pierre, for appellee First Nat. Bank.
Brent Wilbur of May, Adam, Gerdes and Thompson, Pierre, for appellee BankWest.
Appellant Ralph Kemnitz (Kemnitz) appeals from the judgment and order of the trial court directing the payment of proceeds on deposit with the Stanley County Clerk of Courts to appellees, First National Bank of Pierre and BankWest of Pierre N.A. The trial court determined that BankWest had a valid security interest in the proceeds and First National Bank held a valid assignment of judgment from attorney Keith Tidball (Tidball) from which the escrow proceeds were derived. We affirm.
In 1979 Kemnitz and Tidball entered into a stipulation and agreement involving the suit pending on the termination of their law partnership. The agreement provided in part that the law partnership known as "Tidball and Kemnitz," with offices in Pierre, Philip and Wall, was to be terminated as of the 30th day of June, 1978. The agreement further provided that Tidball was to receive all right, title and interest to all accounts receivable that are listed in the books in the Pierre office, with an exception of contingency fee cases listed on an exhibit attached to the stipulation and agreement. This exhibit reflects that the fees awarded in the case of Tidball v. Hetrick (Williams estate fee) were to be divided upon collection, with 80% to the partnership (Tidball and Kemnitz) and 20% to Tidball.
In January of 1981, Tidball executed a security agreement to BankWest pledging as collateral the Williams estate fee. The security interest was perfected by BankWest filing a financing statement with the Secretary of State and the Hughes County Register of Deeds.
In February of 1984, Tidball assigned the judgment obtained in his name against Lavonne Hetrick to First National Bank. The judgment had been the subject of an appeal to this court wherein Tidball had been found to be entitled to recover attorney fees in the Williams estate litigation. Tidball v. Hetrick, 363 N.W.2d 414 (S.D.1985). The assignment of judgment was entered of record in the judgment book in Lyman County pursuant to SDCL 15-16-11.
On appeal Kemnitz raises two issues. First, he claims the trial court erred in finding that BankWest had a valid security interest in the escrow proceeds. Kemnitz contends that Tidball did not own in total the contingency fee referred to herein as the Williams estate fee. In view of this alleged lack of 100% ownership or title, Kemnitz claims that Tidball did not possess "rights in the collateral" under SDCL 57A-9-203. Secondly, Kemnitz argues that the assignment to First National Bank was effective only as to Tidball's interest in the assigned judgment, namely, a 60% interest.
In reviewing the findings of fact of the trial court, the findings will not be disturbed on appeal unless they are clearly erroneous. SDCL 15-6-52(a). In applying the clearly erroneous standard, this court will overturn the findings only when, after a review of all the evidence, the court is left with a definite and firm conviction that a mistake has been made. Wiggins v. Shewmake, 374 N.W.2d 111 (S.D.1985).
Formal title is not a prerequisite for the attachment of a security interest. The provisions of the Uniform Commercial Code are not intended to be circumvented by the manipulation of the location of title. State Bank of Young America v. Vidmar Iron, 292 N.W.2d 244 (Minn.1980).
In Brown v. United States, 622 F.Supp. 1047, 1049-1050 (D.S.D.1985), cited by this court in First National Bank in Pierre, S.D. v. Feeney, 393 N.W.2d 458 (S.D.1986), the court in dealing with the question of a debtor's "rights in collateral" held as follows:
Even if the plaintiff had established ownership of the cattle, the court is unconvinced that a third party's ownership interest in collateral bears any substantial weight in determining a debtor's "rights in collateral" for the purposes of attachment of a security interest. The...
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