804 N.W.2d 450
S.D.2011Background
- Pearl owned the Home Place; Lincoln, her son, rented it under an oral lease for nearly two decades.
- In 2008 Lincoln purchased the farm by contract for deed; Pearl was not advised to obtain independent counsel.
- Pearl and Lincoln executed a contract for deed drafted by Lincoln’s attorney; Pearl, elderly and hard of hearing, could not comprehend terms.
- Pearl later sought rescission on undue-influence grounds and alleged breach of the pre-contract oral lease by Lincoln.
- The circuit court found a confidential relationship and a presumption of undue influence, then also found alternative undue-influence elements independent of the confidential-relationship finding, and rescinded the contract while ordering rent per the oral lease for 2009–2010.
- On appeal, Lincoln argues no confidential relationship and challenges the undue-influence findings; Pearl cross-appeals on rent after rescission.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the contract for deed the product of undue influence? | Neugebauer asserts four elements were met. | Neugebauer argues lack of confidential relationship; no undue influence. | Yes; the contract was product of undue influence. |
| Did rescission require Lincoln to pay only the prior rent for 2009–2010? | Pearl argues for fair-market rent post-rescission. | Lincoln contends status quo rent under oral lease should apply. | No; court determined $6,320 per year restored status quo. |
Key Cases Cited
- Stockwell v. Stockwell, 2010 S.D. 79, 790 N.W.2d 52 (S.D. 2010) (undue-influence standard and burden-shifting details)
- Estate of Dokken, 2000 S.D. 9, 604 N.W.2d 487 (S.D. 2000) (time spent and handling affairs relevant to undue-influence inquiry)
- Nizielski v. Tvinnereim, 453 N.W.2d 831 (S.D. 1990) (elements of undue influence and sufficiency of proof)
- Delany v. Delany, 402 N.W.2d 701 (S.D. 1987) (non-medical factors can establish susceptibility to undue influence)
- Kase v. French, 325 N.W.2d 678 (S.D. 1982) (independent legal advice as factor in undue-influence analysis)
- In re Smid, 2008 S.D. 82, 756 N.W.2d 1 (S.D. 2008) (opportunity to seek independent advice; context of rescission rules)
- In re Estate of Jones, 320 N.W.2d 167 (S.D. 1982) (considerations of undue-influence evidence and credibility of witnesses)