Court Opinion

ID: 9514342
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:48:49.518862+00
Date Added: 2024-06-11T09:06:16.285909
License: Public Domain

SABERS, Justice
[¶ 1] Shasta Livestock Auction Yard, Inc. (Shasta) and Heritage Bank appeal a summary judgment in favor of Continental Grain Company. We reverse and remand because genuine issues of material fact exist.
FACTS
[¶ 2] This is a consolidation by the trial court of three lawsuits brought by Continental, Heritage Bank, and Shasta. The following appear to be the facts based on the present record and the briefs.
[¶ 3] Bud Brandenburg is a cattle order buyer. His purchases were financed by Louis Welte, through Heritage Bank.1 Welte authorized Bud to sign checks on Welte’s account. In the normal course of business, Bud would purchase cattle by writing a check on Welte’s account to the seller. The cattle were then sold to a third party and proceeds from the sale were used to repay Welte. In return for the use of his money, Bud paid a commission or interest to Welte.
[¶ 4] Western Cattle, Inc., a cattle buying corporation, is owned by Bud’s wife, Margery Brandenburg and her daughter. Margery had an agreement with Continental wherein Continental would lend money on cattle delivered to its Fall River Feedlot in Hot Springs, South Dakota, and would charge her interest on the loan as well as for feed and costs. Margery, individually, signed a security agreement with Continental in October 1991 and a financing statement for livestock she placed “on feed” at the Fall River Feedlot in 1994. The security agreement contained an after-acquired property clause. Generally, Continental would lend money by sending a check to Margery when a load of cattle arrived. The check was made out to Margery or to Western Cattle, Inc. Continental sent a promissory note for Margery’s signature once the cattle had been sorted and placed on the lot. Continental fed the cattle until they were ready and then sold them, usually to a packer. At that time, Continental would pay off its loan and its bill for feed and costs and forward any profits.2
[¶ 5] In April 1994, Bud Brandenburg purchased 650 heifers from Shasta’s video auction, which were branded with a hoof print on the right rib. Shasta purchased the cattle from Jack Sparrowk for sale at its auction. Shasta gave Bud a receipt which indicated he was the buyer of the cattle. Two checks were written to Shasta to pay for the cattle. One check was written by Western Cattle, Inc. and signed by Margery Brandenburg. This check was returned for nonsufficient funds. The other check was written by Bud *510on Welte’s account. Welte or his bank, Heritage Bank, stopped payment on that check.
[¶ 6] The cattle were shipped to Continental’s Fall River Feedlot. A California brand inspection certification identified Bud as the consignor, or shipper, of the cattle. A South Dakota brand inspector’s tally identified Bud as the “owner of the brand.” Bud called and told Continental the cattle would be placed on its feedlot for Margery. Continental loaned Western Cattle, Inc., not Margery, $252,437.17 on the cattle on May 2, 1994. A promissory note was prepared and sent to Margery by Continental, but on the advice of counsel she did not sign it.
[¶ 7] After Shasta discovered the checks did not clear the banks, its employees called the Fall River Feedlot and requested that the cattle be returned. Continental refused to return the cattle, claiming it had a security interest from Margery.
. [¶ 8] On May 18, 1994, Continental filed a declaratory judgment action. According to the complaint, Continental held approximately 1500 cattle for the Brandenburgs at that time. Continental requested the trial court declare its security interest in the 1500 cattle valid and enforceable and declare that Continental could sell the cattle. Continental also requested the trial court determine that its security interest had priority over the security interests of Shasta, Welte, and Heritage Bank. Heritage Bank filed a declaratory judgment action.3 On June 15, 1994, Shasta counterclaimed for rescission of its contract with Bud Brandenburg and for a declaratory judgment that Margery never owned any interest in the livestock. The trial court consolidated the lawsuits on October 6, 1994.
[¶ 9] Continental held the cattle and sold them in the fall of 1994. Continental paid itself $252,437.17 for the loan to Western Cattle, plus additional sums for feed, care, trucking, and interest. Approximately $80,-000 remained as a credit on Margery’s account after the sales.4
[¶ 10] Continental, Shasta and Heritage Bank filed motions for summary judgment. The trial court’s order indicates there was a hearing on the motions on May 22, 1995. The transcript of that hearing is not in the record. The trial court granted summary judgment in favor of Continental and found its security interest had priority over the security interests of Heritage Bank and Shasta, if they existed. The trial court held Continental’s security interest was perfected February 22, 1994, and that Heritage Bank’s security interest in proceeds was perfected May 29, 1994. Because Shasta merely reserved title until it received payment, the trial court held Shasta’s security interest in the proceeds was unperfected.
[¶ 11] Continental applied to the trial court for payment of its attorney fees of approximately $96,000. The trial court allowed the attorney fees against Margery Brandenburg and permitted Continental to apply the $80,-*511000 balance from Margery’s account on its attorney fees.
[¶ 12] Shasta and Heritage Bank appeal on the basis that the branding laws control, that Margery had no interest in the collateral, and that there was no showing the attorney fees were warranted or reasonable.
[¶ 13] Whether genuine issues of material fact exist preventing summary judgment.
[¶ 14] The standard of review on a motion for summary judgment is well settled. In reviewing a grant of summary judgment:
“ ‘[W]e must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the non-moving party and reasonable doubts should be resolved against the moving party. The non-moving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.’ ”
BankWest v. Groseclose, 535 N.W.2d 860, 863 (S.D.1995) (quoting Easson v. Wagner, 501 N.W.2d 348, 350 (S.D.1993); Waddell v. Dewey County Bank, 471 N.W.2d 591, 593 (S.D.1991)). In this case, all parties moved for summary judgment. We look to the record before the trial court to determine whether genuine issues of material fact exist.
[¶ 15] The trial court, without a trial and without findings of fact, found Margery had sufficient rights in the cattle for Continental’s security interest to attach. We have held that findings of fact are not required when there are no genuine issues of material fact.
“Since summary judgment presupposes there is no genuine issue of fact, findings of fact and conclusions of law are unnecessary.” Wilson [v. Great N. Ry. Co.], 83 S.D. [207,] 211, 157 N.W.2d [19,] 21 [ (S.D. 1968) ].... “We are not bound by the factual findings of the trial court and must conduct an independent review of the record,” Koeniguer v. Eckrich, 422 N.W.2d 600, 601 (S.D.1988) (citation omitted).
Piner v. Jensen, 519 N.W.2d 337, 339 (S.D.1994).
[¶ 16] We have reviewed the record and have determined that genuine issues of material fact exist. They include whether Margery had an interest in the cattle purchased from Shasta, who owned or had interests in the other cattle processed through Fall River, and whether Continental’s attorney fees were allowable, and if so, reasonable. These questions appear to rest, at least in part, on the credibility of witnesses, which must be determined by the fact finder. In re Estate of Elliott, 537 N.W.2d 660, 662 (S.D.1995). These questions may also depend on documents not presently in the record.
[¶ 17] “Summary judgment is an extreme remedy, not intended as a substitute for trial. It is appropriate to dispose of legal, not factual issues and, therefore, it is authorized only when the movant is entitled to judgment as a matter of law because there are no genuine issues of material fact.” Piner, 519 N.W.2d at 339 (citations omitted). In this case, Continental has failed to show the absence of genuine issues of material fact. Dept. of Rev. v. Thiewes, 448 N.W.2d 1, 2-3 (S.D.1989). We therefore reverse the trial court’s grant of summary judgment and remand for trial.
[¶ 18] AMUNDSON and GILBERTSON, JJ., concur.
[¶ 19] MILLER, C.J., and KONENKAMP, J., concur specially.

. Welte is an order buyer and allowed Bud and several other buyers to purchase cattle and write checks on his account. According to bank officers, the practice of order buying would have Welte holding cattle for a brief period of time, between ten and twenty days, in which time the cattle would be purchased, transferred to a new owner, and the checks collected and cleared.
Welte was not optimistic about the cattle market and did not want to own any cattle in 1994, so he authorized only transactions where he or one of his agents already had a buyer and were buying for a third party.

. Clayton Lambeth, general manager of the Fall River Feedlot, testified as follows regarding the arrangement with Margery:
Q: How did Margery Brandenburg make payments to Continental on any cattle that she had purchased and placed at the feedlot[?]
A: She didn't make any payments to Continental Grain or Fall River Feedlot. The mechanics of the way it worked was, ... a particular bunch of cattle cost $650 per head delivered to our facilities with the ... cost of the cattle and the freight and all the cost. We would advance the $650, less the down payment of $150, so her contribution to the package is $150. Then we would advance the $500, which would be the differential, so she never wrote us any checks.
Q: ... How did Continental get paid?
A: Continental got paid actually when the cattle went out of our facilities to the packers when we received those proceeds. What we do at that point is if the cattle broke even, then she would get her $150. If the cattle made more than $150, she'd get more than that. If they lost some of the $150, she would get less....
Q: ... She wouldn't actually get a check back until the cattle had been sold and Continental had been paid?
A: That’s correct.

. Heritage Bank claims a security interest in cattle which Margery placed at the Fall River Feedlot, but not the 650 cattle claimed by Shasta in this case. Heritage Bank admits it or Welte stopped payment on the Shasta check and therefore claims no interest in the 650 cattle. Heritage Bank bases its security interest in cattle on security agreements from Welte dated May 29, 1991 and May 12, 1994, a loan agreement dated March 22, 1994, a promissory note dated May 12, 1994, and financing statements filed with the South Dakota Secretary of State on May 13, 1994. The security agreement pledges, among other things, a purchase money security interest in "865 hd cattle located at Fall River Feedlot." There is no evidence of a security agreement between Welte and Bud, Margery, or Western Cattle, Inc.
Bud answered Heritage Bank's original complaint by signing a handwritten answer, filed April 12, 1995, which stated in part: "All monies from Weltes Heritage Bank & or Continental Grain Co. were used for Cattle Purchases, Commodity Cattle Contracts, Hedging & or Speculating for the benefit of the Welte & Brandenburg Cattle trading & cattle feeding venture.” This appears to be the only reference in the record that Bud was a party to these lawsuits.

. The records of the Fall River Feedlot and the trial court's amended judgment indicate that on May 15, 1994, Margery had an account balance of $824,259.12. On October 15, 1994, after the addition of charges and interest, the account total was $1,177,700.54. Continental sold cattle on June 30, July 15, July 31, August 31, September 15, September 30, October 15, and October 31, 1994, for a total of $1,258,779.41. This resulted in a credit on Margery’s account of $81,078.87. Whether the balance and the sales involved other cattle is not addressed by the parties.