Equipment Service Professionals v. Denowh

Summary

The Supreme Court of South Dakota considered whether an employee’s attempted assignment of his interest in a deferred compensation account constituted valid tender of payment on a promissory note. The court held that the assignment was not valid tender because the note required payment in money, the account was held by a separate corporation, and the deferred compensation agreement prohibited assignment and limited withdrawals. The court reversed summary judgment for the defendant and directed entry of judgment for Equipment Service Professionals.

Holdings

1. Denowh's attempted assignment of his interest in the deferred compensation account was not valid tender or payment of the promissory note. Tender of a debt generally must be made in money unless the parties agree otherwise or the obligee consents to another medium of payment, and ESP did not agree to accept the assignment.
2. The separate corporate identities of ESP and JAS could not be disregarded because Denowh did not assert a corporate-veil-piercing claim. JAS's contractual right to set off debts owed to JAS did not require it to satisfy Denowh's separate debt to ESP.
3. Summary judgment for Denowh was improper because, on the undisputed facts, he had not paid or validly tendered payment of the promissory note.

Questions Presented

1. Whether Denowh's attempted assignment of his rights in a deferred compensation account with JAS constituted valid tender and payment of his promissory-note obligation to ESP.
2. Whether the trial court could order JAS, a nonparty, to apply Denowh's deferred compensation account to satisfy his debt to ESP.

Disposition

reversed