Severson v. Fleck

• Court: U.S. District Court — District of South Dakota
• Writing for the Court: REGISTER
• Citation: Severson v. Fleck, 148 F.Supp. 760 (D. S.D. 1957)
• Decision Date: 27 February 1957
• Docket Number: Civ. No. 3284.
• Parties: Kermit H. SEVERSON, d/b/a Cardel Company, Plaintiff, v. Marcus FLECK, Defendant.

148 F. Supp. 760

Kermit H. SEVERSON, d/b/a Cardel Company, Plaintiff, v. Marcus FLECK, Defendant.

Civ. No. 3284.

United States District Court D. North Dakota, Southwestern Division.

February 27, 1957.

COPYRIGHT MATERIAL OMITTED

George E. Duis, Fargo, N. D., and J. F. X. Conmy, Bismarck, N. D., for plaintiff, for his motion for leave to amend.

Kelsch, Scanlon & Kelsch, Mandan, N. D., for defendant's motion.

REGISTER, Chief Judge.

Two motions are now before the Court for determination — plaintiff's motion for permission to serve and file his amended complaint, and defendant's motion for summary judgment for dismissal of this action and the garnishment proceedings had in aid thereof, upon the merits, with prejudice and costs.

This is an action brought by plaintiff to recover $10,000 from defendant, allegedly due and owing as commission under a broker's contract for the sale of the F. M. Motel (located between Bismarck and Mandan, North Dakota) which was sold for the sum of $175,000 by plaintiff for the defendant. The action was originally brought in the District Court of Clay County, Seventh Judicial District, State of Minnesota. It was subsequently removed to the District Court of the United States for the District of Minnesota, Sixth Division, and thereafter transferred to this Court. Jurisdiction is based upon diversity of citizenship; the plaintiff is a citizen of the State of Minnesota, and the defendant is a citizen of the State of North Dakota. The amount in controversy exceeds the requisite amount of $3,000.

At all times involved herein, plaintiff was in the business of selling business properties on a commission basis. On November 17, 1955, a written agreement was executed by and between plaintiff (by F. A. Squires, his duly authorized agent) and defendant. This agreement, dated November 17, 1955, is a printed form, prepared and furnished by the plaintiff. Mr. Squires, as plaintiff's agent, called upon the defendant at his Motel and the said written agreement (being defendant's Exhibit 1) was executed at said time and place.

The agreement is directed to Cardel Company and contains, among other provisions, the following:

"You are hereby appointed my sole and exclusive agent, and as such are authorized to negotiate the sale of, and to sell for me that property listed and scheduled on the back hereof, for the price and terms indicated, or otherwise agreed to in writing by me * * *", and,

"No oral representations contrary to the terms and provisions of this contract shall be binding upon either of the parties hereto unless reduced to writing and signed by each of the parties to this contract".

Such contract, insofar as it relates to the commission to be paid to plaintiff, contains certain provisions which, for convenience, will be separated into separate clauses as follows:

Clause I: "The price I agree to accept shall be $170,000. net to me."

Clause II: "Any amount you receive above this sum you are to retain as your commission."

Clause III: "I understand that in no event shall your commission be less than ten per cent of total sales price. Such commission shall be based upon the considerations, whether in money or property, or both, bargained for by me."

Clause IV: Under the description of the property listed on the back of the contract appears the following:

"Price, including commissions $185,000.00."

Except for the date, the figure "170,000", the termination date (June 1, 1956), the description and memorandum of the property on the back, and the signatures, the entire contract is in print. The exceptions (other than defendant's signature) are in the handwriting of plaintiff's agent, Mr. Squires. This is the only written contract executed by the parties hereto.

Plaintiff, on or about January 7, 1956, found willing and able purchasers who purchased said motel for $175,000. The purchasers paid to plaintiff $5,000 in cash, which money was retained by plaintiff and applied on account of his commission in accordance with Clause II, recited above. The contract for deed was prepared in Mandan, North Dakota, on January 9, 1956, and was executed by the respective owner (defendant here) and purchasers. The plaintiff was not present, in person or by agent, at the time of execution of the contract for deed. Under the contract, certain property was accepted by the vendor as a part of the consideration and the balance of the purchase price is being paid on a monthly payment basis.

The original complaint is based wholly upon said written contract. The complaint alleges, in part, that "pursuant to written contract the plaintiff was entitled to ten percent of the purchase price as his commission but that plaintiff agreed it would not exceed $15,000." Plaintiff demands $10,000 as balance due over and above the $5,000 he received from the purchaser.

In October, 1956, defendant served interrogatories upon plaintiff, following which plaintiff made his motion for leave to file an amended complaint. This proposed amended complaint contains, in effect, the allegations of the original complaint, including the part quoted above, and in addition thereto the following:

"That thereafter in a subsequent oral agreement at about the time the sale was consummated the parties again agreed that the Plaintiff was to receive a commission of $15,000.00 and the Plaintiff was paid the sum of $5,000.00 earnest money by the purchaser and the parties agreed that there was owing by the Defendant an additional $10,000.00 commission to the Plaintiff. That the Defendant has admitted to various parties that he owes the Plaintiff $10,000.00 additional commission."

The defendant by his answer admits the written contract and the performance by plaintiff, and alleges payment to plaintiff of $5,000 as full commission under said contract and denies further liability.

At the time of oral argument plaintiff requested permission to amend the proposed amended complaint by adding the word "executed" between the words "subsequent" and "oral" so that such amended complaint, as to this, would read "subsequent executed oral" agreement. (Emphasis added.)

Also, during oral argument, in response to a direct question from the Court, counsel for plaintiff stated that plaintiff's claim is based wholly upon such alleged "subsequent executed oral" agreement.

The Court will first determine defendant's motion for summary judgment. This motion is made pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. Subparagraph (c) of this rule provides that "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law * * *" summary judgment may be entered.

The instrument under consideration being a North Dakota contract, the parties thereto are governed and bound by the laws of this state.

If we proceed upon the theory that plaintiff's cause of action is based solely upon the written contract, as is alleged in the original complaint on file herein, it is the opinion of this Court that defendant's motion for summary judgment should be granted, as there would be no issue of fact to be submitted to a jury. That is, the only issue present would be one of law — whether under the specific terms of the contract, the plaintiff is entitled to an additional sum of $10,000 as commission. The question of liability depends solely upon the interpretation of said contract. This is a question of law for the court to determine. Wier v. Texas Co., D.C., 79 F.Supp. 299; Id., 5 Cir., 180 F.2d 465. The interpretation and construction of this written contract must be governed and based upon certain well-established rules of law.

A contract shall be construed most strongly against those who prepared it. Druhl v. Equitable Life Assur. Soc., 56 N.D. 517, 218 N.W. 220, 60 A.L.R. 962.

"If there be doubt as to the true meaning of a written contract and one of the parties be responsible for the terms employed, it is both just and reasonable that it should be construed most strongly against that party." Christian v. First National Bank, 8 Cir., 155 F. 705.

"It must also be kept in mind that, when a written contract is entirely prepared by one of the parties, and accepted, as thus prepared, by the other, any doubt as to the meaning of its provisions is to be resolved against the party preparing it." Drainage Dist. No. 1 of Lincoln County, Neb. v. Rude, 8 Cir., 21 F.2d 257, 261.

The contract involved in this suit was prepared and furnished by the plaintiff. It consisted almost entirely of printed matter; the handwritten parts thereof, with the exception of defendant's signature, were written thereon by plaintiff's authorized agent, Mr. F. A. Squires. Therefore, any ambiguity or uncertainty which exists should be construed most strongly against plaintiff.

It is apparent that Clause I and Clause III are inconsistent and repugnant to each other, and consequently both cannot be enforced. The sale price was $175,000. Under Clauses I and II, the plaintiff's commission would be $5,000. Under Clause III his commission would be $17,500, leaving the sum of only $157,500 net to the defendant. The provisions of Clauses I, II and IV can be harmonized; Clause III is inconsistent therewith. Under the law as recited above, such ambiguity and inconsistency is the responsibility of plaintiff and will be resolved against him.

It is a general rule of law that where two clauses of an agreement are so inconsistent and repugnant that they cannot stand together, the first will be received and the latter rejected. Du Puy v. United States, 35 F.2d 990, 68 Ct.Cl. 574, and cases cited therein. The Supreme Court of South Dakota, in the case of Dustin v. Interstate Business Men's Acc. Ass'n, 37 S.D. 635, 159 N.W. 395, at page 396, L.R.A.1917B, 319, held that

"Where two clauses of a contract are in conflict with each other the latter must

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