Johnson v. Schmitt

309 N.W.2d 838, 1981 S.D. LEXIS 329
CourtSouth Dakota Supreme Court
DecidedSeptember 2, 1981
Docket13241
StatusPublished
Cited by12 cases

This text of 309 N.W.2d 838 (Johnson v. Schmitt) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. Schmitt, 309 N.W.2d 838, 1981 S.D. LEXIS 329 (S.D. 1981).

Opinion

MORGAN, Justice.

This appeal proceeds from a judgment in favor of plaintiffs Gary and Roxanne Johnson (appellees, or individually as Gary J. and Roxanne J.) against defendants Charles and Margaret Schmitt (appellants, or individually as Charles S. and Margaret S.). Appellees received damages as follows: for wrongful interference with contract (Count I), $15,000 compensatory and $5,000 punitive; for assault and battery (Count II) Gary J. alone recovered $100 compensatory and $500 punitive from Charles S. but not Margaret S.; for conversion (Count III) $75 compensatory from Charles S. alone. Based on the evidence, the trial court ordered a remittitur of $8,643.09 on Count I. We deal with appellants’ arguments severally and affirm the trial court.

Appellants are the developers of a subdivision, “The Niche,” located in Meade County, South Dakota, within the environs of Rapid City. Although appellees had purchased a lot from appellants on which they located a mobile home, appellants retained control of the water supply and sold water to the various owners of subdivision property.

A Homeowner’s Association existed to aid in the management of streets, utilities and common areas. Gary J. was an officer of the association. Animosity arose between appellants and appellees when the Homeowner’s Association sued appellants over the water supply.

Subsequently, appellees attempted to sell their property. Eva Miller (Miller) and Clifford Borden (Borden) became interested in purchasing the property. Charles S., however, had threatened to cut off water services to any purchaser. The real estate broker with whom the property was listed attempted to mediate and secure a sure water supply from appellants for the buyers. To this end, he negotiated a deal. Appellees were to pay appellant $1500 for a hookup fee from an escrow account established with the sale proceeds. Charles S. and Gary J. accepted these terms in a letter which both signed. Later a contract for sale of the property was signed between appellees and the buyers. Appellants, ap-pellees and the buyers signed another agreement which provided that the buyers would not be involved in any dispute between appellants and appellees, and could take title to the property free and clear subject only to their common obligation as water users in the subdivision. In anticipation of the closing, the buyers deposited the purchase money in escrow with the broker.

Prior to the closing date, however, an altercation occurred between Charles S. and Gary J. After a near collision on the service road to the property, Charles S. sprayed mace in the face of Gary J. This was the basis for the assault and battery action. Immediately thereafter, Charles S. telephoned the buyers and refused water service to Gary J.’s property. The buyers backed out of the sale and recovered their money from the broker. This was the basis *840 for the interference with contract action. After appellees had moved to Rapid City, Charles S. went to the mobile home, removed the water meter and took it into Rapid City, ostensibly, to have it tested. This was the basis for the conversion count.

We first examine the issue regarding appellants’ liability for interference with contract. By motion for directed verdict and proposed instruction, appellants urged the trial court to hold that they had a right to withhold the water from the buyer and therefore could not be liable for interference. The legal theory on which appellants relied is stated in Restatement (Second) of Torts § 773, at 52.

One who, by asserting in good faith a legally protected interest of his own or threatening in good faith to protect the interest by appropriate means, intentionally causes a third person not to perform an existing contract or enter into a prospective contractual relation with another does not interfere improperly with the other’s relation if the actor believes that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction.

The trial court ruled on appellants’ motion for directed verdict as follows:

The court is going to take the position that the [appellant] by retaining the water and sewer right, when he developed this property, and charging a monthly fee for water and sewer service, became obligated then to furnish water and sewer to those people in that development, on a reasonable basis, with no discrimination as to any of the people in that subdivision.

Appellants also proposed instruction to the jury in the following form:

You are instructed that [appellants] have an absolute right to sell or not to sell water to any person. You are further instructed that there is no liability for procuring a breach of contract where such breach is caused by the exercise of an absolute right, that is, by an act which a person has a definite legal right to do.
Accordingly if you find from the evidence that [appellees’] proposed sale of property to [Miller] fell through because [appellants] refused to sell water to [Miller], your verdict should be for the [appellants] and against the [appellees] on Count One.

The trial court refused this proposed instruction without further comment.

Although the legal theory is valid, we do not find it applicable to the facts of this case. We do not have to examine the trial court’s theory of appellants’ obligation to furnish water on a reasonable basis without discrimination because clearly the record supports an obligation to furnish water to prospective purchasers of Gary J.’s property by a written agreement. Charles S. and Gary J. signed a letter from the broker to Charles S. It contained the following terms:

Dear Mr. Schmitt,

As per our conversation on the 23rd of September, concerning the water hookup fee of $1500.00 on Gary & Roxanne Johnson’s property.
Mr. & Mrs. Johnson have agreed to pay $1500.00, which will be paid from our office on the date of the sale, which is to be about the 20th of October, 1978.
Your check will be issued prior to Mr. & Mrs. Johnson receiving their check for the proceeds of the sale.
As per our agreement, would you please sign this letter indicating your acceptance of these terms.

Charles S. and Gary J. each signed on the appropriate lines at the foot of the letter.

Apparently, appellants agree that the above letter eliminated any absolute right because on appeal the thrust of their argument is that absent payment or tender of the hookup fee the contractual obligation was unenforceable, and insufficient to support a claim for interference. We disagree, however, with appellants’ major premise that the hookup fee was not paid or tendered. The agreement provides for payment on or about October 20, 1978. The sale proceeds, from which the fee was payable, were deposited in escrow with the broker as specifically provided in the letter. These acts were payment or tender in accord with the provisions of the agreement. *841 Appellants cite no legal authority to the contrary. Moreover, the record reflects that Charles S. did not call the buyer to renege on the agreement because the fee had not been paid or tendered.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
309 N.W.2d 838, 1981 S.D. LEXIS 329, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-schmitt-sd-1981.