FarmPro Services, Inc. v. Finneman
2016 S.D. 72
| S.D. | 2016Background
- Finnemans mortgaged land to FarmPro and Rabo; Rabo mortgage senior to FarmPro.
- FarmPro foreclosed; FarmPro obtained certificate of sale; Michael Arnoldy redeemed from Ahrlin.
- Rock Creek Farms (RCF) and Finnemans formed to redeem; Anderson extended redemption period for RCF.
- RCF later redeemed in RCF’s own FarmPro foreclosure; RCF later faced a separate Rabo foreclosure where waiver of owner’s final right of redemption was decided.
- RCF and Finnemans sought equitable relief and recovery of redemption payments; circuit court limited relief to Mahoney payment and denied others.
- Court held Michael Arnoldy had statutory right to the Mahoney payment; RCF’s claimed restitution unlikely; no invalidating mistake found.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to the Mahoney payment | RCF claims entitlement to Mahoney payment as restitution. | Arnoldys held statutory right to the Mahoney payment; no restitution needed. | Michael entitled to the Mahoney payment. |
| Recovery of other redemption payments | RCF and Finnemans seek recovery of additional payments as restitution. | No recovery without invalidating mistake; waiver risks borne by redeeming parties. | No recovery for other payments; only Mahoney payment decided. |
| Impact of risk and invalidating mistake theory | RCF argues no risk should affect restitution. | Redeeming party bears risk; waiver decision open; calculated risk valid. | Equitable relief denied because no invalidating mistake; risk proper consideration. |
| Discovery on unclean hands and related claims | Discovery necessary to address equitable claims. | Only summary judgment on Mahoney; discovery proper scope limited. | No abuse; discovery not required for Mahoney entitlement. |
Key Cases Cited
- Way v. Hill, 41 S.D. 437 (1919) (equitable jurisdiction to determine excusable mistake in good faith attempts to redeem)
- Copper Belle Mining Co. of W. Va. v. Gleeson, 134 P. 285 (Ariz. 1913) (miscalculation not a recoverable mistake; risk of loss weighs)
- L & L P’ship v. Rock Creek Farms, 2014 S.D. 9 (2014) (waiver and redemption issues in related foreclosures)
- Myers v. Eich, 2006 S.D. 69 (2006) (equitable consideration of waivers in redemption)
- O’Connor v. Schwan, 251 N.W.2d 180 (1933) (mortgagor may waive redemption right post transaction)
- Davis Mfg. & Supply Co. v. Coonskin Props., Inc., 687 P.2d 484 (Colo. App. 1984) (restoration claims; restitution principles in unjust enrichment)
- Abrams v. Porter, 920 P.2d 386 (Idaho 1996) (rebuts notion of automatic restitution in redemption)
- E. Jersey Sav. & Loan Ass’n v. Shatto, 544 A.2d 899 (N.J. Super. Ct. Ch. Div. 1987) (restitution principles in redeeming scenarios)