Simeone v. First Bank Nat. Ass'n

• Decision Date: 24 July 1992
• Docket Number: No. 91-1629,91-1629
• Citation: 971 F.2d 103
• Parties: Frederick A. SIMEONE, M.D., Appellant, v. FIRST BANK NATIONAL ASSOCIATION, also known as First National Bank of St. Paul; Antje Angela Quante, Executrix of the Estate of Herman Quante; Leland Gohlike; Peter Garretson; Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 103

971 F.2d 103

23 Fed.R.Serv.3d 546

Frederick A. SIMEONE, M.D., Appellant, v. FIRST BANK NATIONAL ASSOCIATION, also known as First National Bank of St. Paul; Antje Angela Quante Executrix of the Estate of Herman Quante; Leland Gohlike Peter Garretson; Appellees.

No. 91-1629.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 14, 1991.

Decided July 24, 1992.

Paul A. Lauricella, Philadelphia, Pa., argued (James E. Beasley, on the brief), for appellant.

Scott A. Johnson, Wayzata, Minn., and Michael A. Stern, Minneapolis, Minn., argued for appellees.

Before LAY, ^* Chief Judge, RICHARD S. ARNOLD, ^** Circuit Judge, and STUART, ^*** Senior District Judge.

LAY, Chief Judge.

Frederick A. Simeone appeals the district court's grant of summary judgment in favor of First Bank National Association (First Bank), Antje Angela Quante, the Executrix of the Estate of Herman Quante (the Estate), Leland Gohlike, and Peter Garretson. The litigation arises from a purchase agreement between Simeone, First Bank and the Estate relating to the purchase of certain classic automobiles and parts. Upon First Bank's and the Estate's refusal to perform under the contract, Simeone brought suit for breach of contract, fraud and misrepresentation, tortious interference with a contract, breach of fiduciary duty, and conspiracy. Upon review, we vacate the district court's order granting summary judgment. ¹

I. BACKGROUND

On July 1, 1985, following a determination that Leland Gohlike and Gohlike Brothers, Inc. had defaulted on certain obligations to First Bank, the Minnesota District Court for Washington County entered an order directing the county sheriff to seize from Gohlike's possession certain property in which First Bank possessed a security interest. This property included a number of classic automobiles and parts. The court further authorized First Bank to sell such property and ordered Gohlike and his company "enjoined, restrained and prevented from operating, moving, leasing, selling, disposing, using, encumbering, selling in the ordinary course of business, mortgaging, pledging or otherwise adversely affecting the Collateral interest of claimant in said Collateral." The First Nat'l Bank of St. Paul v. Leland Gohlike and Gohlike Bros., No. C1-85-670 (Minn.Dist.Ct. July 1, 1985).

On October 26, 1985, First Bank and the Estate ² entered into a contract with Simeone to convey the automobiles and parts for $450,000. The contract required Simeone immediately to assume the risk of loss on the property, and to tender ten percent of the purchase price. The contract set forth two conditions which would terminate the immediate obligation to convey title and interest in the automobiles and parts:

[U]nless either (a) the Bank determines that it is precluded from performing in accordance herewith by order, stay, pending action, regulation, injunction or the filing of notice of federal tax lien without satisfaction of additional conditions or (b) Gohlike pays to the Bank and the estate on or before November 4, 1985, cash in excess of the Purchase Price set forth in Section 2 hereof, and prior to that date Gohlike delivers to the Bank as well as its officers, directors and agents a release of the Bank by the Estate as well as a release of the Bank, its officers, directors and agents by Gohlike acceptable to the Bank, the Bank and the Estate will convey to the Purchaser on November 4, 1985, all of their right, title and interest in the Conveyed Assets....

Jt.App. at 89. Simeone claims that First Bank representatives advised him that Gohlike had been enjoined from interfering with the disposition of the property, and that Gohlike's only means of preventing the conveyance would be to tender an amount greater than the purchase price. Three days before this agreement was executed, however, Gohlike initiated an action in federal court against First Bank and its officers alleging, inter alia, violations of his civil rights.

On October 28, 1985, First Bank wrote to Gohlike's attorney informing him of the purchase agreement and advising him of the agreement's provision of "one additional opportunity for the Debtor [Gohlike]" to buy back the cars and parts. Jt.App. at 103. The letter further indicated that First Bank would view any attempt to interfere with its disposition of the collateral as a direct violation of court orders, but suggested that if Gohlike disagreed he was "free to bring a motion in Washington County District Court seeking to amend these orders." Id. at 104. On November 4, 1985, the date set for the conveyance of title to Simeone, Gohlike obtained from the Washington County District Court an ex parte temporary restraining order (TRO) preventing the sale of the collateral. Thereafter, First Bank and the Estate refused Simeone's proffered tender of the balance of the purchase price.

On November 5, 1985, according to Simeone, First Bank officer Peter Garretson informed him that First Bank was prepared to fight the TRO, and that it expected the TRO to be vacated and the purchase agreement to proceed. On November 6, 1985, a First Bank representative appeared before the Washington County District Court and moved to vacate the TRO; a hearing on the Bank's objections was set for November 12, 1985.

Sometime on or before November 8, 1985, without Simeone's knowledge, First Bank entered into negotiations with Gohlike and James Torseth, a neighbor of Gohlike's, to sell the automobiles and parts to Torseth in exchange for Gohlike's dismissal of his federal district court suit against the Bank and its officers and a purchase price by Torseth slightly in excess of Simeone's. On November 9, 1985, First Bank's attorney informed Simeone over the telephone that the Bank was concerned about the nuisance value of Gohlike's suit against it and its officers, and was considering selling the automobiles and parts to Torseth.

At the November 12, 1985 hearing First Bank and the Estate presented the court with a proposed order directing First Bank to convey the collateral to SMB, Inc. (Torseth), directing Gohlike to dismiss his action against First Bank and its officers, and vacating the TRO. The court approved the proposed order over the objections of Simeone's attorney. First Bank returned Simeone's $45,000 in April of 1986.

Simeone commenced legal proceedings in Minnesota state court on December 19, 1985. Simeone later moved to dismiss the state court proceedings, and the court permitted Simeone to dismiss his actions without prejudice. Simeone then filed the present action in federal district court on October 20, 1988. The defendants moved for an award of fees and costs associated with the state proceedings pursuant to Federal Rule of Civil Procedure 41(d). On March 31, 1989, the United States District Court for the District of Minnesota granted this motion and ordered Simeone to pay defendants $13,922.97 in state court costs, including $11,550 in expert witness fees.

Upon defendants' motion, the federal court entered summary judgment in favor of defendants on August 22, 1989. Simeone appeals.

II. CONTRACT INTERPRETATION

The district court determined that the contract between Simeone, First Bank, and the Estate set forth two conditions precedent to First Bank's and the Estate's duty to convey to Simeone their title and interest in the collateral. It further found that because the Bank and the Estate were precluded by court order from conveying the collateral to Simeone on November 4, 1985, the Bank's and the Estate's obligations under the contract were terminated. We must respectfully disagree.

The interpretation of a contract presents a question of law. Hibbs v. K-Mart Corp., 870 F.2d 435, 438 (8th Cir.1989). On appeal, we decide the case de novo. The terms of the contract should be construed by their plain meaning. See, e.g., Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 67 (Minn.1979); Employers Mut. Liab. Ins. Co. v. Eagles Lodge, 282 Minn. 477, 479, 165 N.W.2d 554, 556 (1969); Bobich v. Oja, 258 Minn. 287, 294, 104 N.W.2d 19, 24 (1960). We deem the contract executed on October 26, 1985, as unambiguous, establishing a binding agreement between the parties. There should be little question that the contract was binding and effective between the parties at the time of execution. The contract provided in part: "this Agreement shall constitute a binding contract for the disposition of the Conveyed Assets enforceable as between the Bank[, the Estate,] and the Purchaser upon execution of this Agreement by the Bank[, the Estate,] and the Purchaser...." Jt.App. at 92 (emphasis added). The contract required Simeone to perform some of his obligations under the contract immediately upon signing, such as assuming risk of loss and tendering a portion of the purchase price. The contract also established a date on which the Bank and the Estate were obligated to convey title and interest in the collateral to Simeone, and the date on which Simeone was required to tender the balance of the purchase price. The Bank's and the Estate's obligations to convey title on that date, however, could be excused if either of two events occurred. Under these circumstances, we read the contract as establishing conditions which might excuse the Bank's and the Estate's obligations to convey title on November 4, 1985, the date specified by the contract. See Restatement (Second) of Contracts § 230(1) (1981) ("if under the terms of the contract the occurrence of an event is to terminate an obligor's duty of immediate performance ... that duty is discharged if the event occurs."). ³

The express terms of the contract make clear that the existence of the TRO on November 4, 1985, one of the two conditions, did not serve as an event which would terminate all rights and obligations under the contract itself; it merely excused the Bank's and the Estate's failure to convey the title to the collateral on that date. See Samuel Williston, 5 Williston on...