Rusch v. Kauker

Decision Date24 October 1991
Docket NumberNo. 17438,17438
PartiesArthur L. RUSCH and Lana K. Rusch, husband and wife, Plaintiffs and Appellants, v. Michael L. KAUKER and Judith J. Kauker, husband and wife, Defendants and Appellees. . Considered on Briefs
CourtSouth Dakota Supreme Court

James E. McCulloch, Minick & McCulloch, Vermillion, for plaintiffs and appellants.

Robert R. Nelson, Bierle, Nelson & Michels, Yankton, for defendants and appellees.

SABERS, Justice.

Rusch appeals from a judgment in favor of Kauker claiming that the trial court erred in concluding the Offer and Agreement to purchase was not a binding agreement between the parties. We reverse and remand.


Arthur and Lana Rusch (Rusch) owned a house at 620 Canby, Vermillion, S.D. Rusch lived in this house from 1976 until he moved to a new residence in Vermillion in 1982. The house had a mortgage balance of approximately $20,000. This mortgage contained a "callable on sale" clause which would allow the bank to request full payment of the mortgage if title became vested in any other person. Rusch listed the house for sale when he moved to the new residence, but no sale was made during that year. To defray expenses, Rusch leased the house for a period of nine months. This lease was later converted to a month to month basis to increase the marketability of the house.

In September of 1983, Rusch relisted the house with Sue Roach (Roach) 1 of Century 21 at $67,500 and a provision requiring buyers to "arrange own financing."

In July, 1983, Dr. Michael Kauker (Kauker) came to Vermillion from Memphis, Tennessee looking into employment with the University of South Dakota School of Medicine. He and his wife were interested in obtaining housing in the Vermillion area. Kauker's wife was a real estate agent with Century 21 in Memphis, which caused them to contact the Century 21 office in Vermillion. However, Kauker returned to Tennessee without making any decision as to housing.

On October 4 and 5, 1983, Kauker met with Roach for the second time. During this meeting, several houses were shown to Kauker, including the Rusch house. Roach testified that Rusch had informed her of the mortgage on the house and that she informed Kauker. On October 12, 1983, Kauker made an offer on the Rusch house which required seller financing by means of a contract for deed and a closing/possession date of December 1, 1983. Rusch rejected this offer.

On October 17, 1983, Kauker made a second offer on the Rusch house. Prior to the expiration of the offer, Rusch informed Kauker that the interest rate on the proposed contract for deed was satisfactory but the purchase price was not. On October 20, 1983, Kauker made a third offer on the Rusch house. This offer was satisfactory to Rusch in interest rate and purchase price.

The offer was prepared on a standard offer and agreement form which contained the following language:

8. If this offer is not accepted by the Seller or if offer is contingent upon buyer obtaining FHA, VA or other loan and he is unable to qualify for or obtain such loan, then this agreement (in either case) shall be abrogated and of no force or effect and Buyer's earnest money shall be returned to him in full.

9. Upon approval and acceptance of this Agreement by Seller and in event Buyer shall not complete the purchase as herein agreed, Buyer shall forfeit the deposit made by him.

Kauker insisted on the addition of two sentences to the standard form:

Appliances & mechanically functioning systems to be in working order on closing day. This offer is contingent upon Buyers' approval of Contract for Deed. (emphasis added).

Roach testified that following a discussion with Kauker, she informed Rusch that this approval contingency was to apply to form only. On October 23, Rusch accepted this offer, it was signed by all parties and became their agreement (Agreement). The December 1, 1983 closing and possession date remained unchanged. Following the signing of the Agreement, Rusch gave his tenants notice of termination to meet the December 1, 1983 possession date.

As a result of some confusion between Rusch and Roach as to responsibility for preparing the Contract for Deed, it was not prepared until November 15, 1983. Kauker testified that he did not receive the draft until November 28, 1983. Kauker responded to the Contract for Deed with approximately ten objections on November 29, 1983. The primary objection to the Contract for Deed, that contracts for deed are illegal, apparently resulted from an opinion from a Tennessee attorney. Roach persuaded Kauker and Rusch to meet on December 1, 1983 to work out an acceptable contract for deed.

At the December 1 meeting, Kauker expressed concern over the mortgage on the Rusch house. 2 Roach testified that during this meeting and throughout the negotiations, she unsuccessfully encouraged Kauker to obtain South Dakota legal counsel. Following this meeting Roach and Rusch made several changes to the Contract for Deed to attempt to satisfy Kauker's objections. 3 A second draft was delivered to Kauker on December 2, 1983, but it was also rejected. Kauker's letter of rejection stated two primary objections:

We could not approve the contract that was presented to us for two main reasons. The contract did not involve or request approval of the sale from the involved third party, the National Bank of South Dakota, that holds a mortgage of about $20,000 on the house. We feel that their approval is needed for an acceptable transaction. Our second concern was lack of protection of buyer's rights concerning cash deposits, additions or major improvements. We could not risk a 30 day repossession, stipulated in the original contract-for-deed, on such large investments.

Following receipt of this letter, Rusch wrote Kauker and requested that Kauker submit a contract for deed that would be acceptable to him. Kauker did not respond other than to point out that the December 1, 1983 deadline had passed and no further negotiation was desired.

Despite no response, Rusch prepared and delivered a third draft of the contract for deed. No discussions or negotiations were had on this draft. On December 15, 1983, Rusch gave written notice to Kauker of his intention to mitigate damages by re-renting the house, but no renter was found until April, 1984. On December 19, 1983, Rusch filed suit against Kauker alleging breach of the "Offer and Agreement to Purchase" and sought specific performance and damages.

The trial court issued a memorandum decision denying Rusch's motion for summary judgment on October 1, 1984, but failed to sign the order denying the motion for summary judgment until April 12, 1985. The matter went to trial before Circuit Judge Talbott on February 2, 1988. Since the trial court had not made a decision by late 1989, Rusch attempted to supplement the record to reflect that the house had been sold and that specific performance was no longer sought. This motion was later dropped. The trial court finally issued its memorandum opinion on November 5, 1990 in favor of Kauker and accepted the blame for the delay as follows: "Substantial delay has been encountered in the development of this Decision, fault for such delay properly lying at this Court's door." The trial court signed findings of fact and conclusions of law on December 10, 1990, and concluded that given the substantial negotiations that occurred between Rusch and Kauker, the Offer and Agreement was not intended to be a final or complete binding agreement, thus no enforceable contract existed between Rusch and Kauker.

Rusch appeals claiming that the trial court erred by 1) concluding that there was no binding agreement between the parties, and 2) even if no binding agreement existed between the parties, he is entitled to damages as a result of requests by Kauker.


Rusch claims the trial court erred in concluding that the Offer and Agreement was not a binding final and complete agreement. Conclusions of law "are given no deference by this court on appeal" and are reviewed de novo. Permann v. Dept. of Labor, Unemp. Ins. D., 411 N.W.2d 113, 117 (S.D.1987). We are confronted here with mixed questions of law and fact.

[M]ixed questions of law and fact [are] questions in which the historical facts are admitted or established, the rule of law is undisputed, and the issue is whether the facts satisfy the statutory standard[.]

Id. at 118, quoting Pullman-Standard v. Swint, 456 U.S. 273, 289 n. 19, 102 S.Ct. 1781, 1790 n. 19, 72 L.Ed.2d 66, 80 n. 19 (1982). In this case, the facts are established and the issue is whether those facts constitute a binding agreement. Mixed questions of law and fact "are of the type which we may freely review." Matter of Groseth Intern., Inc., 442 N.W.2d 229, 232 (1989). See also Permann, 411 N.W.2d at 119.

The trial court made its determination primarily on Sabow v. Hall, 323 N.W.2d 861 (S.D.1982). In Sabow, substantial negotiations were also conducted. However, these negotiations were not limited to the final contract for deed; they extended back to the offer and agreement. During this process several substantial changes and additions to the offer and agreement to purchase were made at the request of appellee and Dr. Sabow, or his attorney. It is clear from these facts and circumstances that the parties did not intend the offer and agreement to purchase to be a final or complete agreement on the terms and conditions of sale.

Id. at 863 (emphasis added). In the present case, the negotiations concerned provisions of the contract for deed, not the Agreement. Thus, the underlying Agreement was left unchanged. Therefore, Sabow is factually distinguishable.

In O'Brien v. R-J Development Corp., 387 N.W.2d 521 (S.D.1986), reh'g granted and aff'd in part and rev'd in part on other grounds, 398 N.W.2d 132 (S.D.1986), this court upheld the trial court's determination that the offer and...

To continue reading

Request your trial
27 cases
  • National Farmers Union Property & Cas. Co. v. Bang
    • United States
    • Supreme Court of South Dakota
    • May 18, 1994 a question of law. Vellinga v. Vellinga, 442 N.W.2d 472, 473 (S.D.1989). Conclusions of law are reviewed de novo. Rusch v. Kauker, 479 N.W.2d 496, 499 (S.D.1991). In construing statutes, this court looks at the intention of the lawmakers as expressed in the plain meaning and effect of th......
  • Zurcher v. Herveat, Docket No. 206948.
    • United States
    • Court of Appeal of Michigan (US)
    • February 10, 2000
    ...terms are the identification of the parties, description of the property, the price, and the method of payment. Rusch v. Kauker, 479 N.W.2d 496, 500 (S.D., 1991). Section 96-101 of the Georgia Code of 1933 states that "[t]hree elements are essential to a contract of sale: 1. An identificati......
  • Dan Nelson, Automotive, Inc. v. Viken
    • United States
    • Supreme Court of South Dakota
    • November 2, 2005
    ...506 N.W.2d 138, 140 (S.D.1993); In re P.A.M., 505 N.W.2d 395, 396 (S.D.1993). Questions of law are reviewed de novo. Rusch v. Kauker, 479 N.W.2d 496, 499 (S.D.1991) (citing Permann v. Department of Labor, Unemployment Ins. Div., 411 N.W.2d 113, 117 Exhaustion of Administrative Remedies [¶ 7......
  • Sander v. Geib, Elston, Frost Professional Ass'n
    • United States
    • Supreme Court of South Dakota
    • September 15, 1993
    ...a continuing treatment relationship between Kim and Clinical Lab. We review the trial court's legal conclusion de novo. Rusch v. Kauker, 479 N.W.2d 496, 499 (S.D.1991); Permann v. Department of Labor, 411 N.W.2d 113, 117 We have previously recognized the continuing treatment doctrine in Wel......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT