Summary
Michael Bydal appealed a summary judgment awarding Collection Center, Inc. $129,958.15 on assigned contribution claims arising from two loans for which Bydal and William Reimer were co-obligors. The North Dakota Supreme Court held that Reimer’s assignment transferred no greater rights than he possessed, but that Bydal failed to present competent evidence creating a genuine issue of material fact regarding contribution or disproportionate benefits. The court also affirmed the striking of Bydal’s amended counterclaim alleging Reimer breached fiduciary duties.
Topics
Practice areas
Questions Presented
- Whether Bydal presented competent admissible evidence creating a genuine issue of material fact concerning the parties' proportionate liability, benefits from the loans, or potential defenses and setoffs sufficient to defeat summary judgment on Collection Center's contribution claims.
- Whether an assignee for collection acquires no greater contribution rights than the assignor and remains subject to defenses, setoffs, and counterclaims available against the assignor.
- Whether Bydal could assert an amended counterclaim as of right in response to Collection Center's amended complaint, which changed the theory of recovery.
- Whether Bydal's fiduciary-duty counterclaim was permissible under N.D.R.Civ.P. 13 when asserted against Collection Center, an assignee of Reimer's individual contribution claims, rather than against Reimer in his capacity as corporate president.
Holdings
- Summary judgment was proper because Bydal failed to present competent admissible evidence establishing a genuine issue of material fact concerning the proportionate liability of the co-obligors or any disproportionate benefit received by Reimer.
- Collection Center, as assignee of Reimer's contribution claims for collection, acquired no greater rights than Reimer possessed and stood in Reimer's shoes for purposes of the claims against Bydal.
- Because Collection Center's amended complaint changed the theory of the case from collection on assigned debts to claims for contribution, Bydal was entitled to plead in response to the amendment without first obtaining leave of court.
- The amended counterclaim was properly stricken because Collection Center was not an opposing party under N.D.R.Civ.P. 13(a) or (b) for claims alleging that Reimer, in his capacity as corporate president, breached fiduciary duties.
Key quotations
“a coguarantor may purchase an assignment of a note and the guaranties, but the initial relationship as coguarantors will operate as a matter of law to restrict the recovery and will govern the rights of the coguarantors.” (¶ 13)
“When Reimer assigned his contribution claims to Collection Center, Collection Center acquired no greater rights against Bydal than Reimer possessed. Collection Center thus “stands in the shoes” of Reimer for purposes of the contribution claims.” (¶ 20)
“Collection Center’s amended complaint, however, changed the theory of the case, and the district court erred in striking Bydal’s amended counterclaim for that reason.” (¶ 35)
Factual background
Bydal and Reimer were shareholders in corporations that succeeded Technology Central, Inc., whose debts were involved in the underlying loans. Bydal and Reimer were co-makers on one note and co-guarantors on another; Reimer paid the remaining balances and assigned his rights to Collection Center for collection. Collection Center brought contribution claims against Bydal, while Bydal asserted that Reimer had breached fiduciary duties as president of the corporations.
Procedural history
Collection Center sued Bydal to recover amounts relating to two loans that Reimer had paid and assigned to Collection Center. The district court permitted Collection Center to amend its complaint to assert contribution claims under N.D.C.C. § 9-01-08. It granted summary judgment for Collection Center and struck Bydal's amended counterclaim alleging breach of fiduciary duties. The North Dakota Supreme Court affirmed.