Kost v. Kraft, 2011 ND 69

Summary

The North Dakota Supreme Court reviewed summary judgment dismissing Allen Kraft’s counterclaims against Jim Kost for payment allegedly due under oral agreements involving leased combining equipment and custom combining services. The court held that disputed issues of material fact existed regarding whether the oral equipment lease was enforceable under the Uniform Commercial Code’s statute-of-frauds exception for goods received and accepted. The court also held that the record did not establish that Kraft’s bankruptcy proceeding precluded him from pursuing the counterclaims, reversed the summary judgment, and remanded.

Holdings

1. The received-and-accepted exception in N.D.C.C. § 41-02.1-10(4)(c), the U.C.C. statute of frauds for leases, is construed consistently with the identical exception for sales of goods. Because disputed issues of material fact existed regarding whether Kost received and accepted the leased equipment, summary judgment on the alleged oral lease claim was improper.
2. The record did not establish as a matter of law that Kraft's bankruptcy proceeding precluded him from pursuing his counterclaims because the proceeding had not been shown to be closed or the trustee discharged, and the trustee had assigned the bankruptcy estate's interest in the litigation to Kraft with bankruptcy-court approval.

Questions Presented

1. Whether disputed issues of material fact existed concerning whether the alleged oral lease of combining equipment was enforceable under the received-and-accepted exception to the Uniform Commercial Code statute of frauds for leases.
2. Whether Kraft's failure to list his counterclaims in his bankruptcy schedules, in light of the trustee's later assignment of the bankruptcy estate's interest in the litigation with bankruptcy-court approval, barred him from pursuing the counterclaims.

Disposition

reversed_and_remanded