Severson v. Fleck

• Decision Date: 06 February 1958
• Docket Number: No. 15829.,15829.
• Citation: 251 F.2d 920
• Parties: Kermit H. SEVERSON, d/b/a Cardel Company, Appellant, v. Marcus FLECK, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

251 F.2d 920 (1958)

Kermit H. SEVERSON, d/b/a Cardel Company, Appellant, v. Marcus FLECK, Appellee.

No. 15829.

United States Court of Appeals Eighth Circuit.

February 6, 1958.

Israel Treiman, St. Louis, Mo. (George E. Duis, Fargo, N. D., and Eugene L. Heck, Minneapolis, Minn., were on the brief), for appellant.

C. F. Kelsch, Bismarck, N. D., for appellee.

Before SANBORN, JOHNSEN and VOGEL, Circuit Judges.

VOGEL, Circuit Judge.

This is an action on a contract between a citizen of North Dakota and a citizen of Minnesota in which plaintiff-appellant claims that an additional $10,000.00 broker's commission is due him for his services in obtaining a buyer for defendant-appellee's motel, located near Bismarck, North Dakota. The action was commenced in a Minnesota state court, removed to Federal District Court in Minnesota, and thereafter transferred to the United States District Court for the District of North Dakota. The pertinent provisions of the contract between the parties are quoted below in the manner set out by the trial court in its opinion, Severson v. Fleck, D.C.N.D.1957, 148 F.Supp. 760, 763:

"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.\'"

Appellant's complaint alleges:

"1.

"That he is in the business of selling business properties on a commission basis; that he operates under the name and style of Cardel Company; that before January, 1956, the defendant had listed a motel in Bismarck, North Dakota, with the plaintiff for the purpose of selling the same; that in or about January 8, 1956, the plaintiff found a purchaser, ready, able and willing to purchase said motel for the sum of $175,000.00. That pursuant to written contract the plaintiff was entitled to ten per cent of the purchase price as his commission but that plaintiff agreed it would not exceed $15,000.00. That the sale was made as aforementioned to a purchaser found by plaintiff.

"2.

"That the plaintiff at the time the sale was consummated was paid the sum of $5,000.00 earnest money by the purchaser. That under the terms of the contract between plaintiff and the defendant the plaintiff was entitled to apply said earnest money to his commission after the sale was made and the plaintiff has applied the same, leaving a balance owing to plaintiff in the sum of Ten Thousand and no/100 Dollars. That plaintiff has demanded the same but defendant has refused and neglected to pay the same.

"Wherefore, plaintiff prays judgment for the sum of $10,000.00 together with interest at 6% per annum from January 8, 1956, together with costs and disbursements."

Appellee's answer admitted all of the allegations of the complaint, except the allegations that appellant was entitled to 10% of the purchase price; that appellant had agreed that the commission would not exceed $15,000.00; and that a balance of $10,000.00 was owing to appellant.

Appellee affirmatively alleged that he had agreed to accept and did accept the sum of $170,000.00 net to him; and that the additional $5,000.00 consideration received for the sale of the motel and paid to appellant was the full commission due appellant.

Appellee moved for summary judgment on the grounds that there was no genuine issue of material fact before the court; that the only issues presented by the pleadings and undisputed facts were issues of law for determination by the court; and that appellee was entitled to summary judgment as a matter of law. Rule 56(c), F.R.C.P., 28 U.S.C.A. After consideration of the pleadings, pretrial proceedings, motions and affidavits thereto, the trial court found that "Clause I" and "Clause III" of the quoted provisions of the contract were inconsistent and repugnant to each other. The trial court then applied general and North Dakota statutory rules of construction and found as a matter of law that the ambiguity and inconsistency therein were the responsibility of the appellant and would be resolved against him. Appellee's motion for summary judgment was then granted on the grounds that as a matter of law appellant had received his full commission ($5,000.00, the amount by which the sale price exceeded the $170,000.00 net to the appellee) and that there was no issue to submit to a jury. Severson v. Fleck, D.C.N.D.1957, 148 F.Supp. 760, supra.

Appellant's position is that the trial court erred in granting summary judgment because there were remaining genuine issues of fact as to the intention of the parties in executing this ambiguous contract and that such issues could be resolved by parol evidence. Appellant also contends that the North Dakota statutory rules of construction compel the conclusion that the contract requires a commission of 10% of the sale price.

Rule 56(c), F.R.C.P., 28 U.S.C.A., provides in part:

"The judgment sought shall be rendered forthwith 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."

The proper application of that rule has been stated by this court in Northwestern Auto Parts Co. v. Chicago, B. & Q. R. Co., 8 Cir., 1957, 240 F.2d 743, 746:

"* * * under Rule 56(c), Federal Rules of Civil Procedure, 28 U. S.C.A., a summary judgment upon motion therefor by a defendant should never be entered except where the defendant is entitled to its allowance beyond all doubt; only where the conceded facts show defendant\'s right with such clarity as to leave no room for controversy; with all reasonable doubts touching the existence of a genuine issue as to a material fact resolved against the movant; giving the benefit of all reasonable inferences that may reasonably be drawn from the evidence to the party moved against. `That one reasonably may surmise that the plaintiff is unlikely to prevail upon a trial, is not a sufficient basis for refusing him his day in court with respect to issues which are not shown to be sham, frivolous, or so unsubstantial that it would obviously be futile to try them.\' Sprague v. Vogt, 8 Cir., 150 F.2d 795, 801; Traylor v. Black, Sivalls & Bryson, Inc., 8 Cir., 189 F.2d 213; Union Transfer Co. v. Riss & Co., 8 Cir., 218 F.2d 553; Caylor v. Virden, 8 Cir., 217 F.2d 739."

The trial court determined as a matter of law, and we think quite properly, that the contract here was ambiguous. United States v. Northern Pacific Ry. Co., 8 Cir., 1951, 188 F.2d 277, 280:

"The question as to whether an ambiguity exists in a contract is to be determined by the court as a matter of law. 17 C.J.S. Contracts § 617; Whiting Stoker Company v. Chicago Stoker Company, 7 Cir., 171 F.2d 248; Golden Gate Bridge & Highway District of California v. United States, 9 Cir., 125 F.2d 872."

Having determined that an ambiguity existed, the court was then presented with an issue of fact: What was the intent of the parties in executing the ambiguous contract? However, the mere existence of an issue of fact is not sufficient to preclude summary judgment unless such issue is a controlling one. This court said in Durasteel Co. v. Great Lakes Steel Corp., 8 Cir., 1953, 205 F.2d 438, 441:

"An issue of fact is not genuine unless it has legal probative force as to a controlling issue, 35 C.J.S. Federal Courts § 144, p. 1205. Th

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