Poeppel v. Lester
2013 SD 17
| S.D. | 2013Background
- Poeppel owned 25% voting interest in CBLKH; Lester sought to buy Poeppel’s shares for $500,000.
- March 28, 2008 contract signed using a form Dreyer provided; Lester altered it and Poeppel signed.
- Closing set for May 15, 2008; Lester did not attend or pay for the shares.
- Lester claimed fraud: Poeppel allegedly withheld financial info, misrepresented income, and claimed an exclusive franchise.
- Trial court held contract unambiguous and barred parol evidence; damages trial awarded Poeppel $250,000.
- On appeal, issues included contract ambiguity, admissibility of financial information, a put option, and damages accuracy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contract ambiguity was correctly determined | Poeppel | Lester | Contract unambiguous; plain language prevails |
| Whether parol evidence was properly excluded to bar fraud evidence | Poeppel | Lester | Parol evidence rule does not bar fraud in inducement evidence |
| Whether fraud in inducement evidence should have been allowed | Poeppel | Lester | Fraud in inducement evidence admissible; issues for jury |
| Whether the trial court erred in not allowing evidence of a put option | Poeppel | Lester | Not addressed given reversal on fraud issue; remand for trial |
Key Cases Cited
- Holmes v. Couturier, 452 N.W.2d 135 (S.D. 1990) (fraud can vitiate contract despite merger clauses)
- Engles v. Ranger Bar, Inc., 604 N.W.2d 241 (S.D. 2000) (parol evidence not limited where fraud in inducement shown)
- Schwaiger v. Mitchell Radiology Assocs., P.C., 652 N.W.2d 372 (S.D. 2002) (shift to minority rule on fraud in inducement via disclaimer)
- Detmers v. Costner, 814 N.W.2d 146 (S.D. 2012) (contract interpretation; parol evidence; de novo review)
- Engels v. Ranger Bar, Inc., 604 N.W.2d 241 (S.D. 2000) (parol evidence and fraud principles in SD)