Justia Real Estate & Property Law Opinion Summaries

James and Amber May hired RES Construction to build their home in Sioux Falls. RES subcontracted First Rate Excavate, Inc. to install the septic system and construct the foundation. The Mays alleged that the foundation was installed several feet below grade level, causing significant drainage and septic issues that damaged their home, yard, and neighboring properties. They sued First Rate for negligence. The circuit court dismissed the claim based on the economic loss doctrine, and the Mays appealed.The Circuit Court of the Second Judicial Circuit in Lincoln County, South Dakota, dismissed the Mays' negligence claim, citing the economic loss doctrine, which limits remedies for purely economic losses to those specified in a contract. The court reasoned that the Mays lacked privity of contract with First Rate and that their claims were barred by the six-year statute of limitations.The Supreme Court of the State of South Dakota reviewed the case. The court held that the economic loss doctrine should not be expanded beyond claims arising from transactions involving the sale of defective goods under the Uniform Commercial Code (UCC). The court noted that the doctrine is designed to prevent parties from circumventing contract remedies by seeking tort remedies for economic losses. Since the Mays' claim was based on negligence and not on a UCC transaction, the economic loss doctrine did not apply. Additionally, the court found that the lack of privity between the Mays and First Rate further precluded the application of the economic loss doctrine. The Supreme Court reversed the circuit court's dismissal and remanded the case for further proceedings. View "May v. First Rate Excavate" on Justia Law

Clyde and Nancy Straatmeyer purchased a lot within a subdivision governed by a restrictive covenant. They began constructing a house with a large three-car garage, prompting their neighbors to sue to stop the construction, claiming it violated the covenant. The Straatmeyers counterclaimed, seeking to have the covenant declared void. The circuit court held a bench trial and ultimately declared the covenant null and void.The Circuit Court of the Fourth Judicial Circuit in Meade County, South Dakota, found that the restrictive covenant had been routinely violated by numerous property owners within the subdivision without any enforcement action taken since its inception in 1976. The court determined that enforcing the covenant against the Straatmeyers while allowing other violations to persist would be inequitable. The court also found that the covenant's terms, such as the three-car garage limit and the prohibition on business activities, had been violated by several plaintiffs.The Supreme Court of the State of South Dakota reviewed the case and affirmed the circuit court's decision. The Supreme Court held that the circuit court did not abuse its discretion in declaring the covenant void. The court noted that the widespread, unchallenged violations of the covenant undermined its purpose and that enforcing it selectively would be unjust. The Supreme Court agreed that it would be impractical and harmful to require all properties to comply with the covenant and that voiding the covenant was an appropriate equitable remedy. View "Hood v. Straatmeyer" on Justia Law

Rod Dorale built his house with a setback of seven feet three inches from the neighboring property line, violating the McCook County ordinance requiring a nine-foot setback. Greg and Patricia DeCramer, who own the adjacent property, appealed the McCook County Board of Adjustment's decision to grant Dorale a variance for the reduced setback. The DeCramers argued that the Board exceeded its authority by violating the governing statute and county ordinance.The circuit court denied the DeCramers' petition for a writ of certiorari, concluding that the Board had complied with the requirements for granting a variance under SDCL 11-2-53(2). The court noted that the Board determined the variance would not be offensive to the public and that undue hardship existed because Dorale would have to move the house. The court emphasized the limited nature of its review, stating it could not question the Board's decision or examine the facts leading to the variance request.The South Dakota Supreme Court reviewed the case and found that the Board acted illegally and in excess of its authority by granting a variance that did not comply with SDCL 11-2-53(2) or the county ordinance. The Court noted that the Board did not find any special conditions or extraordinary circumstances that justified the variance. The Board's finding that there was "nothing extraordinary in this residential district" precluded it from granting the variance under the terms of the ordinance. Consequently, the Supreme Court reversed the circuit court's decision and remanded the case for the entry of an order vacating the variance granted by the Board. View "Decramer v. Dorale" on Justia Law

The Garretts owned 5,200 acres of farmland in Sully County and faced financial difficulties, leading them to sell the property to the Stocks. The Stocks agreed to lease the land back to the Garretts for five years, with an option for the Garretts to repurchase it. The Garretts failed to make timely lease payments, prompting the Stocks to initiate an eviction action. The Stocks alleged that the Garretts had not only failed to pay rent but also committed waste on the property.The Circuit Court of the Sixth Judicial Circuit in Sully County held a two-day trial, where the jury found in favor of the Stocks, granting them immediate possession of the farmland. The Garretts appealed, arguing that the circuit court erred in denying their motion to dismiss, their motion for judgment as a matter of law, and their motion for a new trial. They also contended that the court erred in denying their proposed jury instructions.The Supreme Court of South Dakota reviewed the case and affirmed the circuit court's decisions. The court held that the Stocks had complied with the three-day notice to quit requirement and that the mandatory mediation provisions did not apply as the relationship was that of lessor and lessee, not creditor and borrower. The court also found that the circuit court did not abuse its discretion in denying the Garretts' proposed jury instructions, as the instructions given adequately covered the applicable law. Finally, the court concluded that the jury's verdict was supported by sufficient evidence, and the circuit court did not err in denying the Garretts' motions for judgment as a matter of law or for a new trial. The Supreme Court also awarded the Stocks $5,000 in appellate attorney fees. View "Stock v. Garrett" on Justia Law

VOR, Inc. and the Grand Valley Hutterite Brethren (Colony) initiated an eviction action against Paul O’Farrell and Skyline Cattle Co. (Skyline) under South Dakota’s forcible entry and detainer (FED) statutes. Paul moved to dismiss the suit, arguing that the eviction should have been a compulsory counterclaim in his pending undue influence suit against his brother Kelly, the Colony, and the Raymond and Victoria O’Farrell Living Trust. The circuit court denied Paul’s motion to dismiss, and after a court trial, granted the eviction, ordering Paul to vacate the property within ten days and allowing the Colony to keep any of Paul’s personal property abandoned after the ten days expired. Paul appealed.The Circuit Court of the Third Judicial Circuit denied Paul’s motion to dismiss, his request for a jury trial, and his request for a continuance. The court proceeded with a court trial and granted the eviction in favor of the Landlords. The court also ordered that any personal property left by Paul after ten days would be considered abandoned and could be kept by the Colony. Additionally, the court awarded attorney’s fees to the Landlords.The Supreme Court of South Dakota reviewed the case and affirmed the circuit court’s decision in part and reversed it in part. The court held that the FED statutes did not allow for pre-answer motions to extend the time for filing an answer and that the eviction action was not a compulsory counterclaim in Paul’s undue influence lawsuit. The court also held that Paul’s demand for a jury trial was untimely and that the circuit court did not abuse its discretion in denying the request for a continuance or in excluding evidence of undue influence. However, the Supreme Court found that the circuit court erred in ordering the forfeiture of Paul’s personal property and remanded the case to revise the judgment accordingly. The court awarded VOR and the Colony combined appellate attorney fees of $9,000. View "Vor, Inc. v. Estate of O'Farrell" on Justia Law

Duane and Melody Remington purchased a campground and later discovered various defects on the property. They sued the seller, Keith Grimm, and the real estate agent, Bryan Iverson, alleging multiple claims including failure to disclose defects, fraudulent misrepresentation, and breach of fiduciary duty. The Remingtons claimed that Iverson and Grimm did not provide a required property disclosure statement and misrepresented the financial condition of the campground.The Circuit Court of the Seventh Judicial Circuit in Pennington County, South Dakota, granted summary judgment in favor of Iverson, determining that a property disclosure statement was not required because the sale was a commercial transaction. The court did not specifically address the common law claims of nondisclosure against Iverson. The Remingtons appealed the decision.The Supreme Court of the State of South Dakota reviewed the case. The court held that a property disclosure statement was required for the living quarters of the campground, which constituted residential real property. The court affirmed the lower court's decision that a disclosure statement was not required for the non-residential aspects of the campground. The case was remanded to determine whether Iverson breached his fiduciary duty by failing to inform the Remingtons that Grimm was required to provide a property disclosure statement for the living quarters.The court also affirmed the summary judgment on the claims of Iverson’s direct liability, concluding that the Remingtons failed to establish that Iverson had actual knowledge of the alleged defects. The court dismissed Iverson’s notice of review regarding attorney fees and costs due to lack of jurisdiction. View "Remington v. Iverson" on Justia Law

Paul O’Farrell, individually and on behalf of the Raymond and Victoria O’Farrell Living Trust, the Estate of Victoria O’Farrell, Skyline Cattle Co., and VOR, Inc., filed a lawsuit against Grand Valley Hutterian Brethren, Inc., the Raymond and Victoria O’Farrell Living Trust, and Kelly O’Farrell. Paul alleged that Kelly manipulated their father, Raymond, to orchestrate improper transactions, including a $3.2 million land sale and the non-renewal of Skyline’s lease, causing financial harm to the family entities and himself.The Circuit Court of the Third Judicial Circuit in Grant County, South Dakota, presided by Judge Robert L. Spears, dismissed Paul’s claims and awarded attorney fees to the defendants. Paul had requested a change of judge, which was denied by Presiding Judge Stoltenburg, who cited judicial economy and previous submissions by Paul in related cases as reasons for the denial.The Supreme Court of the State of South Dakota reviewed the case. The court held that Paul and Skyline followed the proper procedure for seeking a change of judge and that neither had waived their right to do so in this specific action. The court found that Judge Spears was disqualified from further proceedings upon the filing of the affidavit for change of judge. Consequently, the Supreme Court vacated all orders entered by Judge Spears in the case and remanded for the appointment of a replacement judge. View "Estate Of O’Farrell v. Grand Valley Hutterian Brethren" on Justia Law

Chris Welsh, representing CAL SD, LLC, entered into a purchase agreement with Interwest Leasing, LLC to buy commercial real estate, with a $30,000 earnest money deposit. Welsh passed away before closing, and CAL SD refused to close. Interwest sold the property to another buyer for the same price but did not return the earnest money. CAL SD filed a declaratory judgment action to recover the deposit, claiming the agreement was void due to their inability to obtain financing.The Circuit Court of the Seventh Judicial Circuit in Pennington County, South Dakota, treated the declaratory judgment as a breach of contract action and set it for a jury trial. The jury found in favor of CAL SD, and the court ordered the return of the earnest money deposit. Interwest appealed, arguing the action was equitable and should not have been decided by a jury, and also claimed the court gave erroneous jury instructions.The Supreme Court of the State of South Dakota reviewed the case. The court held that the declaratory judgment action was legal, not equitable, because it sought to enforce contractual rights under the purchase agreement, which was void if financing was not obtained. The court affirmed the lower court's decision to submit the case to a jury for a binding verdict, as the issue was whether CAL SD breached the contract by failing to secure financing. The court concluded that the jury's determination that CAL SD was unable to obtain financing rendered the purchase agreement void, entitling CAL SD to the return of the earnest money deposit. View "Cal SD, LLC v. Interwest Leasing, LLC" on Justia Law

In October 2020, Cal SD, LLC purchased a property with a restrictive covenant that regulated property maintenance and improvements, including a prohibition on new construction within designated "no build" areas. The covenant allowed for a specific exception for a garden fence on Lot B, with strict size and location limitations. Tina Roberts, who gained control of Cal SD in April 2021, constructed a garden with a fence that included overhead trusses and hail netting, exceeding the permitted dimensions and height.The Circuit Court of the Seventh Judicial Circuit, Pennington County, South Dakota, reviewed the case after Spring Canyon Properties, LLC filed a complaint alleging that Roberts' garden structure violated the restrictive covenant. The court denied Roberts' motion for summary judgment and granted Spring Canyon's motion for partial summary judgment, concluding that the garden structure was a building rather than a fence and violated the covenant. The court ordered Roberts to remove the overhead components and comply with the covenant.The Supreme Court of the State of South Dakota reviewed the case. The court affirmed the circuit court's decision that the garden structure violated the restrictive covenant, as the structure did not fit the plain and ordinary meaning of a "fence" and conflicted with the covenant's purposes. However, the Supreme Court found that the circuit court erred in imposing an eight-foot height restriction, as neither the covenant nor the county ordinance specified such a limit. The Supreme Court affirmed the order to bring the fence into compliance with the covenant but remanded to remove the height restriction. View "Spring Canyon Properties, LLC v. Roberts" on Justia Law

Mary Johnson entered into an oral agreement with her parents, Carl and Pearl Johnson, to obtain financing for constructing a small home on a parcel of land (Gertie Lode) they conveyed to her. In exchange, Mary and her family could live in their parents' larger home on a separate parcel (Spaniard Lode). Once the mortgage was satisfied, Mary was to transfer the Gertie Lode property equally to herself and her siblings. Despite satisfying the mortgage, Mary informed her siblings in 2008 that she would not convey the land to them.Greg Johnson, Mary's brother, sought to enforce the oral agreement and reform the deed from their parents to Mary. The Circuit Court of the Seventh Judicial Circuit, Pennington County, granted Mary’s motion for summary judgment, determining that Greg’s breach of contract claim was barred by the statute of limitations and that he was not entitled to reformation because he could not establish that the deed failed to reflect the parties’ intent. Greg appealed the decision.The Supreme Court of the State of South Dakota reviewed the case and affirmed the lower court's decision. The court held that Greg’s breach of contract claim accrued when he received Mary’s 2008 letter, which clearly indicated her intent to breach the oral agreement. Since Greg did not bring his claim until October 2018, it was barred by the six-year statute of limitations. Additionally, the court found no basis for reformation of the deed, as the oral agreement was never reduced to writing, and the warranty deed accurately reflected the intent of the parties. Therefore, summary judgment on both the breach of contract and reformation claims was appropriate. View "Johnson v. Johnson" on Justia Law