822 N.W.2d 714
S.D.2012Background
- Terry and Cindy Leonhardt allege an oral lease with Delbert Leonhardt extending for the lives of Delbert and Ellen, with a right of first refusal they could exercise after death of both owners.
- Delbert later entered a written, three-year lease with his grandson Matthew Oswald covering farmland Terry and Cindy claim was part of the oral lease.
- Plaintiffs sought declaratory judgment validating the oral lease and right of first refusal and requested specific performance.
- Delbert and Matthew moved for summary judgment arguing the oral lease was invalid under SDCL 43-32-2 (agricultural leases not to exceed 20 years).
- Circuit court granted summary judgment on the statute of frauds ground; Terry and Cindy appealed.
- On appeal, the issue centered on whether the circuit court properly considered the statute of frauds and whether adequate notice was given to Terry and Cindy about relying on a legal theory not argued by the movants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was adequate notice given for applying the statute of frauds at summary judgment? | Terry and Cindy lacked notice and thus were prejudiced. | Statute of frauds was raised in amended answer; movants argued it; sufficient notice provided. | Reversed and remanded for proceedings; lack of notice found prejudicial. |
Key Cases Cited
- Heisler v. Metro. Council, 339 F.3d 622 (8th Cir. 2003) (courts should notify parties when relying on different legal theories on summary judgment)
- Jaste v. Gailfus, 679 N.W.2d 257 (S.D. 2000s) (nonmoving party must be given opportunity to respond when new issues are raised)
- Bridgeway Corp. v. Citibank, 201 F.3d 134 (2d Cir. 2000) (summary judgment may be affirmed on legally developed record even if not raised by parties)
- Coach Leatherware Co., Inc. v. Ann Taylor, Inc., 933 F.2d 162 (2d Cir. 1991) (courts may grant summary judgment on legal grounds not expressly argued by the parties if record is developed)
- Herr v. Dakotah, Inc., 2000 S.D. 90 (S.D. 2000) (notice and opportunity to respond required when a court converts a motion)