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Underwood Farmers Elevator v. Leidholm

North Dakota Supreme Court
460 N.W.2d 711 (1990)

Written by Denise McGimsey, JD

Facts

Ron Leidholm (defendant) contracted to supply 25,000 bushels of oats to Underwood Farmers Elevator (the Elevator) (plaintiff) at $1.50 per bushel. Leidholm eventually informed the Elevator that drought conditions prevented delivery of the oats. The Elevator refused Leidholm’s request to “buy out” the contract [by paying the difference between the contract price and the existing market price of $1.53 per bushel]. A month later, the Elevator allowed Leidholm to buy out the contract, but by that point, the market price was $2.67 per bushel. Thus, what would have been a $750 debt at the time of Leidholm’s initial request ended up as a $29,750 liability. At the Elevator’s request, Leidholm signed a confession of judgment in the amount of $29,750 plus 12 percent interest. Leidholm later claimed that the Elevator manager called the confession of judgment a mere formality necessary for accounting purposes and promised to work out repayment terms reflecting a reduced liability. Five months later, judgment was entered on the confession of judgment, and the Elevator sought to collect. Leidholm’s motion to vacate the judgment was denied by a North Dakota state court without a hearing. Leidholm appealed.

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Holding and Reasoning (Vande Walle, J.)

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Dissent (Levine, J.)

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