Opinion ID: 2227117
Heading Depth: 2
Heading Rank: 2

Heading: Failure to Give Requested Instructions

Text: The Bank contends that the trial court erred in failing to give its requested instructions on the formation of contracts, fulfillment of conditions precedent to the establishment of a contract, anticipatory repudiation, and retraction of anticipatory repudiation. The Bank contends that the court erred in failing to give its Proposed Instruction No. 1, which generally defined contracts, parties, consent, the object of a contract, and consideration. The trial court refused to give the instruction on the ground that it was unnecessary. We agree. There was no dispute about what a contract is, whether the parties were capable of contracting, whether there was consent, whether the object of the contract between the parties was lawful, or whether there was consideration. The trial court refused to give the Bank's Proposed Instruction No. 2 and No. 3, which defined conditions precedent and stated that one must perform them before requiring another party to perform any act, because they were contrary to the rule in the last paragraph, since I placed the burden on the bank to establish that they could not meet the conditions. The requested instructions were inapplicable to this suit for anticipatory repudiation of a loan commitment letter, as distinguished from a suit for breach of the loan agreement at the end of the commitment period. The trial court refused to give the Bank's Proposed Instruction No. 9 and No. 10, dealing with offer and acceptance and acceptance of a unilateral offer by performance of the requested act, because: No. 9 is again9 and 10, I think are something that really don't apply to the context that we are in here, because there has never been a question as far as I am concerned in the evidence that the defendantthat the plaintiffs accepted the offer. It is a question of whether or not they could meet the conditions. We agree with the trial court's analysis. The Bank contends that the trial court erred in failing to give its Proposed Instruction No. 4: ELEMENTS OF PROOF Before the Plaintiffs can recover, the greater weight of the evidence must establish: 1. That the bank made a contingent loan commitment to the Plaintiffs; and 2. That the bank anticipatorily breached its commitment before the expiration of the time which the Plaintiffs were given to comply with the conditions; and 3. The amount of damages, if any, sustained by the Plaintiff as a result of the withdrawal of the commitment. Anticipatory repudiation occurs when the promisor without justification and before he has committed a breach, makes a positive statement to the promisee indicating that he will not or cannot substantially perform his contractual duties. If the promisor is merely insisting upon compliance with the terms of the contract, then his insistence is not an anticipatory breach or repudiation of the contract. If the greater weight of the evidence establishes that the Plaintiffs could in no way have met the conditions upon which the loan was contingent, then the Plaintiffs may not recover because it would follow that the withdrawal of the commitment would have caused no damage. Instead of the Bank's Proposed Instruction No. 4, the trial court gave the following instruction: ELEMENTS OF PROOF Before the plaintiffs can recover, the greater weight of the evidence must establish: (1) that the bank made a contingent loan commitment to the plaintiffs; (2) that the bank withdrew its commitment before the expiration of the time which the plaintiffs were given to comply with the conditions; and (3) the amount of damages, if any, sustained by the plaintiffs as a result of the withdrawal of the commitment. It is a defense, however, if the greater weight of the evidence establishes that the plaintiffs could in no event have met the conditions upon which the loan was contingent, because it would follow that the withdrawal of the commitment would have caused no damage. By defining anticipatory repudiation, the requested instruction was more comprehensive than the instruction given. We do not, however, agree with the Bank's argument that instructing in terms of withdrawal of the commitment instead of in terms of anticipatory repudiation was erroneous. We note that the Bank injected the concept of withdrawal of the commitment in its proposed instruction. In our view, withdrawal of the commitment before expiration of the time given for compliance with the conditions was an anticipatory repudiation of the commitment. The instruction given, while sparse, adequately apprised the jury that in order to impose liability on the Bank, it must find [t]hat the bank anticipatorily breached its commitment. Because the instruction given correctly advised the jury, there was no error in refusing to give the requested instruction even if it was a correct statement of the law. State v. Dilger, 338 N.W.2d 87 (N.D.1983). The Bank asserts that the trial court erred in refusing to give its Proposed Instruction No. 3A: ENFORCEMENT OF OBLIGATIONSPREREQUISITES Before any party to an obligation can require another party to perform any act under it, he must fulfill all conditions precedent thereto imposed upon himself and must be able, and must offer, to fulfill all conditions concurrent so imposed upon him on the like fulfillment by the other party, but if one party to the obligation gives notice to another before the latter is in default that he will not perform the same upon his part and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party. The requested instruction is a recitation of the provisions of § 9-01-16, N.D.C.C., and is a correct statement of the law. We do not, however, find any error in refusing to give the instruction. The theory behind the Bank's request for Proposed Instruction No. 3A is succinctly stated in its reply brief: The Bank had also requested a jury instruction regarding retraction of an anticipatory repudiation. There is substantial evidence submitted at trial that showed that if there was any repudiation, that repudiation was effectively retracted before East Plaza was required to comply with the conditions. The Bank clearly stated that it would fund the loan through the deposition testimony of Charles Boyd-Snee, and the Summary Judgment Motion of Attorney Zuger. The theory is flawed. The deposition testimony of Boyd-Snee and the summary judgment motion, if they were retractions, came after the developers filed suit for breach of contract by anticipatory repudiation of the commitment. A retraction of an anticipatory repudiation after the injured party sues for enforcement or damages comes too late. The doctrine of breach of contract by anticipatory repudiation has been adopted in North Dakota. Sawyer Farmers Coop. Ass'n v. Linke, 231 N.W.2d 791 (N.D.1975); Dobler v. Malloy, 190 N.W.2d 46 (N.D.1971); Hart-Parr Co. v. Finley, 31 N.D. 130, 153 N.W. 137 (1915). A party injured by another party's anticipatory repudiation may elect to immediately sue for damages. Hart-Parr Co. v. Finley, supra . See also Daum v. Superior Court, 228 Cal.App.2d 283, 39 Cal.Rptr. 443 (1964), McDorman v. Moody, 50 Cal.App.2d 136, 122 P.2d 639 (1942), and Dickey v. Kuhn, 106 Cal.App. 300, 289 P. 242 (1930), wherein the California courts have held that Cal.Civ.Code § 1440, which with the relevant portion of § 9-01-16, N.D.C.C., shares a common derivation from the Field Code, recognizes anticipatory repudiation and that an anticipatory repudiation creates an immediate right of action before the time specified for performance and before contract conditions have been performed. Because a party injured by another party's anticipatory repudiation may elect to immediately sue for damages, a retraction of an anticipatory repudiation must be made before suit is brought to be effective. See Restatement (Second) of Contracts § 256(1) (1981), which outlines the relevant rule: Nullification of Repudiation or Basis for Repudiation. (1) The effect of a statement as constituting a repudiation under § 250 or the basis for a repudiation under § 251 is nullified by a retraction of the statement if notification of the retraction comes to the attention of the injured party before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final. Comment c to § 256 notes that commencement of an action for damages by the injured party is sufficient indication that he considers the repudiation final. That the developers sought specific performance, as an alternative to damages, confirms our conclusion that commencement of this action finalized any repudiation. Retraction at that stage is necessarily a matter constituting an avoidance [5] which must be set forth affirmatively in the answer. Rule 8(c), N.D.R.Civ.P. The Bank did not plead such an affirmative defense, but continued to resist performance with an array of defenses. Since a post-action retraction is an avoidance which, procedurally, must be set forth by pleading, which was not done, there was no factual issue on retraction to submit to the jury. At trial, the developers sought only damages for the repudiation. Procedurally, post-action retraction was no longer an issue. Therefore, there was no error in refusing the requested instruction on retraction of a repudiation.