Sherman v. Sherman

2000 SD 117, 616 N.W.2d 393, 42 U.C.C. Rep. Serv. 2d (West) 491, 2000 S.D. LEXIS 118
CourtSouth Dakota Supreme Court
DecidedAugust 23, 2000
DocketNone
StatusPublished
Cited by3 cases

This text of 2000 SD 117 (Sherman v. Sherman) 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
Sherman v. Sherman, 2000 SD 117, 616 N.W.2d 393, 42 U.C.C. Rep. Serv. 2d (West) 491, 2000 S.D. LEXIS 118 (S.D. 2000).

Opinions

MILLER, Chief Justice.

[¶ 1.] In this decision, we affirm the trial court and hold that plaintiffs’ action is barred by the 4-year statute of limitations governing the sale of goods.

[394]*394FACTS

[¶ 2.] In 1980, Geralyn Sherman and her then-husband Gary Sherman purchased a feed store in Salem, South Dakota (Salem store) on a contract for deed from a third party. A warranty deed conveying the property to them was filed in 1990.

[¶ 3.] Contemporaneous with Gary and Geralyn operating the Salem store, Gary’s parents, John and Joann Sherman, owned and operated a feed store in Howard, South Dakota (Howard store). In order to obtain a better wholesale price, John and Joann purchased feed for both the Howard store and the Salem store. They then sold a portion of the feed on credit to Gary and Geralyn for resale in the Salem store. No terms of this arrangement were reduced to writing. By 1993 Gary and Geralyn owed John and Joann approximately $146,000 for feed purchased over the years.

[¶ 4.] In October 1993 Gary and Geralyn divorced. As part of the divorce they agreed to sell the Salem store to John and Joann. At that time, because the feed debt exceeded the value of the business, they agreed that the sale price of the store was to be applied as a credit against the feed debt, with the remaining debt to be equally divided between Gary and Geralyn. The divorce stipulation specifically provided:

13. As regards the business of the parties known as Sherman Feed Store, the parties agree as follows:
(1). They will sell this business according to the terms of the Purchase Agreement attached hereto and incorporated herein; and,
(2). [Geralyn] will assume one-half of the debt ... and [Gary] will assume the remaining portion.

[¶ 5.] The Purchase Agreement entered into between the parties contained the following provision regarding the feed debt:

PAYMENT OF CONSIDERATION: It is agreed and acknowledged by and between the parties that [Gary and Gera-lyn] are presently indebted to [John and Joann] and that [John and Joann] need make no cash payments in connection with this transfer, however, the obligation of [Gary and Geralyn] to [John and Joann] will be debited in the full amount of this sale and [John and Joann] agree to furnish to [Gary and Geralyn] a document acknowledging receipt of the full amount of this sale for credit upon their obligation.

[¶ 6.] At the time the divorce stipulation and the purchase agreement were entered into, the parties did not know the exact value of the business, nor how much Gary and Geralyn would each owe John and Joann. A subsequent “Supplemental Stipulation” signed by Gary and Geralyn provided those details. According to that document, after the value of the business was credited against the amount owed, Gera-lyn’s share of the debt remaining was $42,-306.67. Apparently, she made no payments on this debt.

[¶ 7.] On November 11, 1998, John and Joann filed suit against Geralyn, claiming that they had not received any payment on the debt. Geralyn responded, raising a statute of limitations defense and arguing that the complaint failed to state a cause of action upon which relief could be granted. Both parties filed motions for summary judgment. After a hearing the trial court granted Geralyn’s motion and denied John and Joann’s motion. They appeal; we affirm.

STANDARD OF REVIEW

[¶ 8.] We make a de novo review of summary judgment on a statute of limitations issue when there are no disputes regarding genuine issues of material fact and only the application of the law is in question. Kurylas, Inc., v. Bradsky, 452 N.W.2d 111, 113 (S.D.1990). See also, Peterson v. Hohm, 2000 SD 27, ¶ 7, 607 N.W.2d 8, 10; Wissink v. Van De Stroet, 1999 SD 92, ¶ 9, 598 N.W.2d 213, 215; Beckel v. Gerber, 1998 SD 48, ¶ 5, 578 N.W.2d 574, 576.

[395]*395DECISION

[¶ 9.] The parties had a binding contract. Under SDCL 57A-2-204, a contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of shch a contract. Furthermore, an agreement sufficient to constitute a contract may be found even though the moment of its making is undetermined. If the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy, a contract will not fail for indefiniteness even though one or more terms are left open. Id.

[¶ 10.] John and Joann claim the divorce documents provide evidence that Geralyn owes them $42,306.67. They characterize the transaction as one other than for the sale of goods and contend the governing statute is SDCL 15-2-13,1 which allows a 6-year statute of limitations. They argue in their brief that “[w]hen goods are sold with other items, as here, the predominant purpose of the contract is what should be examined.... [T]he goods involved in the transaction were only 60 percent of the value of the accounts receivable to which in the transaction must be added the furniture and the fixtures of the business and the real estate.”

[¶ 11.] Geralyn, who seemingly does not dispute the fact that she did not make any payments on her debt, relies upon SDCL 57A-2-725 (Uniform Commercial Code), which provides a 4-year statute of limitations for transactions involving the sale of goods.2 We agree.

[¶ 12.] In order for a transaction to be governed by Article Two of the UCC, the sale must be for a sale of goods. SDCL 57A-2-102. SDCL 57A-2-105 defines “goods” as “all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (chapter 57A-8) and things in action.” “Goods” includes all personal chattels other than things in action and money. City of Gregory v. Clausen, 78 S.D. 208, 212, 99 N.W.2d 883, 885 (1959).

[¶ 13.] We have held that farm machinery constitutes goods, Olson v. Spitzer, 257 N.W.2d 459 (S.D.1977), as do hogs, Lee v. Cohrt, 57 S.D. 387, 232 N.W. 900 (1930). Similarly, mink feed has been deemed subject to Article Two, Primrose v. Russell, 23 Conn.Supp. 91, 176 A.2d 885 (1961), as has grain, Urbana Farmers Union Elevator Co. v. Schock, 351 N.W.2d 88 (N.D.1984), corn, Farmers Elevator Co. of Elk Point v. Lyle, 90 S.D.

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Owens v. FEM Electric Association, Inc.
2005 SD 35 (South Dakota Supreme Court, 2005)
Sherman v. Sherman
2000 SD 117 (South Dakota Supreme Court, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
2000 SD 117, 616 N.W.2d 393, 42 U.C.C. Rep. Serv. 2d (West) 491, 2000 S.D. LEXIS 118, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sherman-v-sherman-sd-2000.