Haberer v. Rice

AMUNDSON, Justice

(concurring specially)-

In Count V of Haberers’ complaint, they allege that Rice failed to answer First Bank’s complaint for default on their $125,000 loan. Haberers claim that this deprived them of the opportunity to interpose defenses and counterclaims. There is no factual dispute that Rice failed to prepare and file an answer or counterclaim. See Haberer v. First Bank of South Dakota, 429 N.W.2d 62 (S.D.1988). Aso, in this prior decision, this court found that the evidence showed that Haberers agreed to and accepted the terms of the new $125,000 loan agreement.

This new agreement must be the focal point to determine whether Haberers would have been successful in obtaining a judgment against First Bank of South Dakota. This court held in Quick v. Bakke, Kopp, Ballou & McFarlin, Inc., 380 N.W.2d 364, 366 (S.D.1982), as follows:

A written agreement supersedes all previous understandings and the intent of the parties must be ascertained therefrom, except, of course in cases involving fraud, mistake or ambiguity. (Citations omitted.) Aso, SDCL 53-8-5 provides:
The execution of a contract in writing, whether the law requires it to be written or not, supersedes all oral negotiations or stipulations concerning its matters which preceded or accompanied the execution of the instrument.

The pleadings in this case do not allege any fraud, mistake or ambiguity as it relates to the First Bank foreclosure action. Therefore, when this case is retried, the question which should be addressed by the trial court is whether or not Haberers would have been successful in obtaining a judgment against First Bank in the foreclosure action on the $125,000 note or contract. See Smith v. *290Even, 53 S.D. 369, 220 N.W. 878 (1928). What transpired during the negotiation for the $250,000 SBA loan or the alleged $150,-000 loan commitment should have no bearing on the case within a ease. The issue is whether Haberers had a meritorious defense to the $125,000 foreclosure action or a meritorious counterclaim limited to the $125,000 note.