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Behrens v. Behrens6/22/2005
Argued on January 13, 2004
[ .] Jon and Don Behrens (jointly referred to as Behrens) owned and operated a funeral home in Rapid City. Without the assistance of legal counsel, they negotiated an agreement to sell their business to Loewen International, Inc. After signing the agreement, Behrens engaged Melvin Wedmore, their long-time attorney, to close the transaction with Loewen. Some time after the transaction was closed, Loewen filed for bankruptcy protection and Behrens were unable to recover the full purchase price they had negotiated. Not satisfied with the outcome of the bankruptcy, Behrens filed this malpractice action against Wedmore. They contended that Wedmore should have better collateralized the transaction, should have advised them of the risks of an installment sale in bankruptcy, and that he charged an unreasonable attorney fee. A jury found for Wedmore on all issues. We affirm.
Facts and Procedural History
[ .] Behrens Mortuary was founded in 1879 by Behrens' great-grandfather. It was the second largest funeral home in South Dakota at the time of its sale to Loewen International, Inc. in 1997. Jon and Don began working in this family business in 1970 and 1983, respectively. They enhanced the business in many ways. Despite the success of the business, Behrens believed that they would have to sell it at some time because the next generation inof their family was not interested in operating the business.
[ .] Robert Eastgate, a regional manager for Loewen, contacted Jon in the mid 1990's about buying the business. Jon told Eastgate that they were not interested in selling. Service Corp. International (SCI), Loewen's competitor, also contacted Behrens about buying the business. Behrens again indicated that they were not interested in selling.
[ .] Loewen continued to pursue the purchase by making a $2 million offer. The terms of this offer included a $1 million cash down payment, with the balance financed by Behrens on a ten-year, interest -free note. After Behrens rejected the offer, Loewen made another offer, this time in the amount of $4.1 million. Behrens responded with a counteroffer. The terms of the counteroffer included a $2.55 million cash down payment and an additional $2 million to be financed by Behrens on an interest -free note payable in ten equal payments.
[ .] Loewen was eager to acquire Behrens Mortuary because it was fighting a takeover bid from SCI and wanted a presence in the Rapid City market. Consequently, Loewen wrote a letter to Behrens containing the following alternate offers:
1. $4,100,000, which included the entire business, as well as the mortuary property and the retort (crematory) property; or
2. $3,400,000, (with $2,400,000 cash at closing) with a lease of the retort property.
Because the funeral home (mortuary property) was owned by Jon's and Don's fathers, these offers indicated that the mortuary property was included in the purchase price. The offer further indicated that Jon and Don were to determine how to allocate the total purchase price to that part of the business.
[ .] On March 25, 1997, Behrens responded with a counteroffer informing Loewen that its proposal to purchase the complete package was acceptable with the following changes in price and financing:
1. $2,550,000 cash at closing [$500,000 of this to be allocated to the purchase of the building from Behrens' fathers];
2. 10 equal annual payments of $200,000 commencing on the first anniversary of the Closing Date. (Unsecured promissory note to be defined.)
[ .] On April 16, 1997, Behrens and Loewen met and executed a writing tha
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