George D. Johnson and Johnson Ford Lincoln-Mercury, Inc. v. Lawrence Coss, 2003 SD 86

Summary

The Supreme Court of South Dakota reviewed summary judgment in a dispute arising from an agreement to purchase an automobile dealership, conditioned on Ford Motor Company's approval of a franchise transfer. The court held that genuine issues of material fact existed regarding whether the purchaser materially contributed to the failure of the condition precedent under the prevention doctrine. It reversed the summary judgment and remanded for further proceedings, while affirming the denial of summary judgment to the purchaser.

Holdings

1. Summary judgment was precluded because genuine issues of material fact existed as to whether Coss materially contributed to the failure to obtain Ford's approval or whether the failure resulted from Ford's discretionary requirements.
2. A party whose conduct materially contributes to the failure of a condition precedent may be prevented from relying on the condition's nonoccurrence; whether the conduct constitutes prevention is ordinarily a question of fact.
3. The affidavit and attorney letter were not barred by the parol evidence rule because they were offered to show Coss's post-execution conduct relating to the franchise transfer, not to establish or alter the agreement's terms.
4. Coss's failure to deposit the required $100,000, even if complete, was only evidence of abandonment and did not establish abandonment as a matter of law because other evidence supported an inference that he continued pursuing the transaction.

Questions Presented

1. Whether the circuit court properly found on summary judgment that Coss was legally responsible for the failure of the Ford franchise-transfer condition precedent.
2. Whether Coss was entitled to summary judgment dismissing Johnson's breach-of-contract claims because the unsatisfied condition precedent barred enforcement of the agreement.
3. Whether evidence concerning Coss's post-contract conduct and efforts to obtain Ford's approval was inadmissible parol evidence.
4. Whether the evidence concerning Coss's failure to deposit $100,000 established abandonment of the contract as a matter of law.

Disposition

reversed_and_remanded