Opinion ID: 2068859
Heading Depth: 2
Heading Rank: 1

Heading: The jury instructions on repossession and sale of the collateral.

Text: Deere's first contention is that . . . the Court incorrectly states that Nygard's counterclaim alleges that Deere failed to credit Nygard with the value of parts, equipment and attachments as required by law in the sum of $40,000.00. Nygard's claim against Deere was not for failure to credit for the value of parts, equipment and attachments. The returned parts question was fully settled by Judge Warner's Pre-Trial Order and the Stipulation. Nygard's claim against Deere was that John Deere had no right to take possession of the collateral and had no right to sell the collateral because the debt from Nygard to Deere was extinguished by other credits due [Nygard from Deere]. Nygard did allege, however, that Deere failed to credit it with the value of parts, equipment and attachments as required by law, and its claim against Deere arose out of Deere's failure to credit Nygard for return of parts, equipment and attachments as required by law. The returned parts question was, as Deere contended, settled by Judge Warner's pre-trial order and the stipulation, but Nygard's claim for damages sustained because of Deere's seizure of its property, which was related to Deere's failure to credit Nygard as required by law at the time it terminated the dealer agreement and seized the property under its claim and delivery action, still remained in issue. Deere next contended that The jury was given a binding instruction that evidence showed there were defaults in the contract. John Deere was within the agreement deciding that the contract had been breached (Tr. 247). The Court continued (Tr. 251) that John Deere had on default the right to take possession of the collateral by claim and delivery, the right to sell the collateral and account to Nygard for any surplus. At the same time the Court instructs the jury in a manner that directs a verdict for the defendant. . . . The contention was that, because a stipulation between the parties providing that there was due to Nygard from Deere some $90,280.38, which was in excess of the $89,278.94 due from Nygard to Deere, the following instructions directed a verdict on the issue of liability in favor of Nygard: . . . If you find from the evidence that the returnable farm implements, machinery, attachments, and repair parts (credited in accordance with North Dakota law) were sufficient to satisfy the indebtedness due from Nygard Equipment, Inc. to John Deere Company, then the underlying debt would be satisfied and John Deere Company would not be entitled to rely on the security agreement to justify the seizure of the Nygard Equipment, Inc. used machinery. This is so even if John Deere Company was ignorant of the fact that its debt could be satisfied by giving proper credit for the returnable farm implements, machinery, attachments, and repair parts, or mistakenly believed that it was not obligated to give such credit for returnable property in accordance with the North Dakota statute. . . . Should you determine that the obligation or debt due from Nygard Equipment, Inc. to John Deere Company could be satisfied by the return by Nygard Equipment, Inc. of the repair parts, farm machinery, implements, and attachments to John Deere Company under the North Dakota law, then you are instructed that the seizure of the used machinery was wrongful . . .. We do not find the instructions to be contradictory or conflicting, nor do we find that a verdict was directed in favor of Nygard. The first instruction quoted above was preceded by the following sentence: You are instructed that the purpose of the security agreement was to provide protection for John Deere Company for the underlying debt owed from Nygard Equipment, Inc. to John Deere Company. Thus, it is clear that the court's instructions on Deere's right to take possession of and sell the collateral were operative only if the jury found that there was an underlying debt owing from Nygard to Deere. Such a finding was not precluded because the stipulation between the parties was before the jury. The stipulation provided, in paragraphs 12 and 13, as follows: 12. While this Stipulation sets out the foregoing agreed upon facts and figures, it is not intended to and it shall not be construed as an admission or acknowledgment by John Deere Company that John Deere knew or should reasonably have known or was required to know that its account and claim against Nygard Equipment was paid or could have been satisfied as of the end of July, 1971, or at anytime thereafter through the sale of the Nygard Equipment Used Machinery described in Paragraph 7 above, without the necessity of seizing the machines in July, 1971, and selling them in April of 1972. 13. The agreements set forth in this Stipulation as to amounts due John Deere Company or credits due Nygard Equipment are the results of compromise and are not to be construed as an admission by either party that such amounts are true and correct for any purpose other than the compromise set forth in the Stipulation or that such amounts were known or should have been known to either of the parties hereto, provided, however, that the amount thereof may be offered into evidence by either party without further foundation. The jury, therefore, was required to arrive at an independent conclusion as to whether there was an underlying debt owing from Nygard to Deere in excess of that which could have been discharged without resorting to the used machinery. The stipulation was material in determining this issue but we cannot say that the instruction constituted a directed verdict in favor of Nygard. The second paragraph of instructions quoted above and contended by Deere to be erroneous is but a part of an instruction that deals, not with liability, but with damages. The instruction goes on to state what is recoverable by Nygard if the jury should find in favor of Nygard. The instruction merely reflects the provisions of Section 32-07-12, N.D.C.C., and the fact that the right to recover the reasonable value of the property and the right to recover damages for the taking and detention of the property are separate rights, as this court held in Nichols & Shepard Co. v. Paulson, supra . Deere next argued that the following language in the court's instructions also directed a verdict for Nygard: . . . if you find by a fair prepon-derance of the evidence that the plaintiff properly conducted the repossession of the machinery and personal property set forth in the evidence within the laws of the state and that the defendant suffered no damages, by reason thereof and that the defendant is not entitled to recover any punitive damages, then you must find in favor of the plaintiff for a dismissal of the action. [Emphasis supplied by Deere.] The language quoted by Deere is but a part of an instruction on the burden of proof. The quoted language was preceded in the court's instructions by the following: If you find, by a fair preponderance of the evidence that the plaintiff did not conduct the repossession of the machinery and personal property connected with the Nygard Equipment, Inc. business, within the contract and according to the state laws, and that the defendant was thereby damaged by reason of any wrongful taking and conversion of such personal property, then the jury must turn its attention to determining the amount of damages, if any, the defendant Nygard Equipment suffered thereby. On the other hand, The language quoted by Deere is succeeded by the following: The defendant has the burden of proving to your satisfaction by a fair preponderance of the evidence that Nygard Equipment, Inc. is entitled to recover damages in this case. That there was a wrongful conversion, that there was malice, fraud or oppression on the part of the plaintiff, the amount of the damages they claim to recover, and that they are entitled to recover from the evidence offered and received in the case. Thus, when the language relied upon by Deere is placed in context it is clear that the court was merely instructing the jury that, in order to recover, Nygard was required to prove each of its claims by a preponderance of the evidence. When the instructions on the burden of proof are considered in their entirety, the use of the word and does not, as Deere contends, improperly link the question of liability to the question of damages. Next, Deere contends that the following language confused the issue of liability with the issue of damage: Should you, however, find that the defendant Nygard Equipment is not entitled to recover any damages on any cause of action in this case, then you will find another form of verdict which will substantially read: We, the jury, empanelled and sworn to try the above entitled action, find in favor of the plaintiff John Deere Co. for a dismissal of this case. The court was merely informing the jury that two forms of verdict were being submitted and which one was used depended upon in whose favor the jury found. The court instructed: Two forms will be submitted to you in this case. One, shall you find that the defendant Nygard Equipment is entitled to recover damages for wrongful conversion and/or for punitive damages in this case, your verdict will substantially read: Should you, however, find that the defendant Nygard Equipment is not entitled to recover any damages on any cause of action in this case, then you will find another form of verdict which will substantially read: . . .. We do not find that the language, cited by Deere as erroneous, when considered in context, confused the issue of liability with the issue of damage. If the defendant in a case is not entitled to recover any damages on any part of the counterclaim, the plaintiff is entitled to a dismissal of the counterclaim.