921 N.W.2d 475
S.D.2018Background
- Appellants (Victoria, Craig, and James Perry) leased ~900 acres to Berbos Farms under a 2013–2015 cash-rent farm lease; they allege Berbos Farms failed to pay the $56,196 rent due for 2015.
- Appellants sued Berbos Farms and individual partners (Joe and Nick) in circuit court to recover the unpaid 2015 rent; that suit remains pending.
- During discovery in the rent suit, Appellants learned Joe and Lisa had earlier filed a separate lawsuit (April 2014) to judicially dissolve Berbos Farms.
- Appellants moved to intervene in the partnership dissolution action as of right under SDCL 15-6-24(a)(2), attaching a proposed complaint asserting the same unpaid-rent claim.
- The circuit court denied intervention, reasoning (1) the rent claim was unrelated to the dissolution petition, (2) allowing intervention could invite all creditors into the dissolution action, and (3) intervention would permit unnecessary discovery into partnership finances.
- The Supreme Court of South Dakota affirmed, holding Appellants had an interest as creditors but failed to show that the dissolution proceedings would likely impair their ability to protect that interest given available remedies and statutory protections for creditors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Appellants may intervene as of right under SDCL 15-6-24(a)(2) in the partnership dissolution | Perry: They are creditors owed 2015 rent; dissolution and winding up could impair their ability to recover, so intervention is necessary | Berbos parties: Appellants have no specific interest in the dissolution beyond a general creditor claim and can pursue recovery in the separate rent suit; dissolution statutes protect creditors | Denied — Appellants have a creditor interest but did not show how dissolution would practically impair their ability to protect it, so intervention as of right was not warranted |
| Whether the circuit court abused its discretion in denying intervention | Perry: Court improperly extended statutory requirements and blocked protection of their claim | Berbos: Court acted within discretion to prevent multiplicity and protect partner privacy/financial information | No abuse of discretion — appellate review affirms trial court’s decision |
Key Cases Cited
- In re Estate of Olson, 759 N.W.2d 315 (2008 S.D. 126) (sets out intervention standards and tripartite test under SDCL 15-6-24(a)(2))
- In re D.M., 710 N.W.2d 441 (2006 S.D. 15) (discusses liberal construction of intervention rule and tripartite test)
- United States v. Union Elec. Co., 64 F.3d 1152 (8th Cir.) (endorses resolving doubts in favor of proposed intervenors)
- Action Mech., Inc. v. Deadwood Historic Pres. Comm’n, 652 N.W.2d 742 (2002 S.D. 121) (addresses partner liability and creditor remedies outside dissolution)
- O’Day v. Nanton, 905 N.W.2d 568 (2017 S.D. 90) (defines abuse of discretion standard)
